War escalates, energy prices spike after Israeli strike on Iran gas field

Global oil and natural gas prices soared Thursday as Iran attacked a key natural gas facility in Qatar that can supply one-fifth of the world's gas, as well as two oil refineries in Kuwait. 

Brent crude, the international benchmark, rose to $116.38 per barrel, up from under $73 per barrel on the eve of the war. The European TTF benchmark for natural gas prices traded 24% higher on Thursday.

The Iranian attack hit the Ras Laffan terminal for shipping out liquefied natural gas in Qatar. Qatar normally supplies some 20% of the world's consumption of LNG, which can be carried by ship. The facility shut down after a drone attack. The closure of the Strait of Hormuz to most tanker traffic also left the gas with nowhere to go.

If the disruptions from Iran's attacks on its Gulf Arab neighbors' energy infrastructure keep oil and gas prices high for long, they could create a debilitating wave of inflation for the global economy.

U.S. benchmark crude oil gained 1.1% to $96.45 a barrel early Thursday, while the Henry Hub future contract, the benchmark for U.S. natural gas, gained 5.1%.

As oil and gas prices spiked, world shares retreated and U.S. futures edged 0.2% lower.

Germany's DAX lost 2.1% to 23,015.40 and the CAC 40 in Paris fell 1.5% to 7,848.88. Britain's FTSE 100 shed 1.7% to 10,134.02.

The war in Iran has highlighted the threat relatively cheap drones pose to both human life and crucial infrastructure. It has also highlighted a seeming unreadiness to counter the weapons among the militaries of the U.S. and some of its major allies in the Middle East. 

As President Trump criticizes America's longtime NATO allies in Europe, they are moving quickly to take the lead in anti-drone warfare capabilities, taking advantage of technology and skills honed over four years of warfare in Ukraine.

Poland, for instance, is developing an advanced, robust anti-drone system to protect its territory, and people behind the initiative tell CBS News they're getting a lot of calls from around the world as other nations look to address one of the biggest threats on the modern battlefield.

Read more here.

Iranian lawmakers are considering a measure that would require other countries that wish to have their vessels transit through the Strait of Hormuz to "pay tolls and taxes," Iran's official state news agency ISNA said Thursday.

"In Parliament, we are pursuing a proposal according to which, if the Strait of Hormuz is used as a safe route for ship transit, energy passage, and ensuring food security, countries will be required to pay tolls and taxes to the Islamic Republic of Iran," ISNA quoted a member of parliament as saying.

Iran has paralyzed the vital shipping lane with incessant missile and drone attacks on commercial vessels since the U.S. and Israel launched their war on the country on Feb. 28.

President Trump has vowed to reopen the strait to shipping traffic, but his demands for other countries to deploy military forces to help do that have thus far drawn only vague commitments by NATO allies to work on a viable international plan.

The ongoing closure of the strait has sent global oil and gas prices soaring.

Oman's Ministry of Foreign Affairs condemned Iran's ongoing attacks on energy facilities in the neighboring Gulf states of the United Arab Emirates, Qatar and Saudi Arabia on Wednesday and issued a call for diplomacy to end the U.S.-Israeli war with Iran.

"Oman emphasizes the necessity of adhering to international laws and norms, refraining from targeting civilian infrastructure and global energy supplies, and calls for de-escalation, cessation of military actions, and prioritizing diplomatic solutions to resolve disputes in a way that preserves security and stability and protects the interests of the region and the world," the ministry said in its statement.

Oman's government stressed "that addressing the root causes of the conflict through dialogue is the best way to find solutions and achieve lasting stability in the region."

Iran's top diplomat said Thursday that the American public could thank Israeli leader Benjamin Netanyahu "and his lackeys in [the U.S.] Congress" for the soaring costs to the U.S. of the war launched against his country on Feb. 28.   

Foreign Minister Abbas Araghchi shared a story from the Washington Post, which CBS News has not confirmed, saying the U.S. Defense Department would seek $200 billion in funding for the Iran war, and calling it the "tip of the iceberg."

"We're only three weeks into this war of choice, imposed on both Iranians and Americans," Foreign Minister Abbas Araghchi said in his social media post. "This $200b is the tip of the iceberg. Ordinary Americans can thank Benjamin Netanyahu and his lackeys in Congress for the trillion-dollar 'Israel First tax' that's about to hit U.S. economy."

So far the Trump administration has not said how much the war will cost the U.S., but a week ago, military officials told members of Congress in a briefing that the first week alone had cost around $11.3 billion, according to sources familiar with the meeting.

On Wednesday, House Speaker Mike Johnson, asked about the estimated cost of the war, told reporters "I don't think it could be calculated yet," as operations were continuing.

Saudi Arabia said a drone hit the country's SAMREF refinery Thursday in the port city of Yanbu on the Red Sea. The Saudi Defense Ministry said damage assessment was underway, without elaborating.

A June 2002 file photo shows the Saudi Aramco Mobil Refinery unit in the industrial city of Janbu, north of Jeddah, Saudi Arabia. Yves GELLIE/Gamma-Rapho/Getty

An earlier drone attack on Kuwait's Mina Al-Ahmadi refinery sparked a fire but caused no injuries, the state-run KUNA news agency reported Thursday. The refinery is one of the biggest in the Middle East, with a petroleum production capacity of 730,000 barrels per day. Shortly after, a drone attack set ablaze the nearby Mina Abdullah refinery, authorities said.

Authorities in Abu Dhabi said they were forced to shut down operations at its Habshan gas facility and Bab field, calling Iranian overnight attacks on the sites a "dangerous escalation."

Missile alert sirens sounded in multiple other areas around the Gulf, and Israel warned of incoming Iranian fire.

Qatar, Saudi Arabia and the United Arab Emirates all denounced the Iranian attacks, with Saudi Arabia's top diplomat saying assaults on the kingdom meant "what little trust there was before has completely been shattered."

CBS/AP

Stock prices were down early Thursday and oil prices rose sharply as the U.S.-Israeli war on Iran escalated.

Israel's Wednesday strike on Iran's South Pars gas field, which is shared with Qatar, and President Trump's threat to destroy the vast reserve if Iran retaliates by striking Qatari infrastructure, have hit markets hard.

The Reuters news agency said U.S. crude futures rose above $97 per barrel early Thursday, while natural gas was up 3% and Brent crude futures rose to $111.87 a barrel, up 4% on the day.

Japan's Nikkei stock index was down over 3%, South Korean equities fell 2.8% and European futures were down more than 1.5% ahead of the continent's markets opening.

"This latest escalation feels like a turning point for markets because the conflict is no longer just about military headlines or Strait of Hormuz closure," Charu Chanana, chief investment strategist at Saxo in Singapore, told Reuters. "It is now hitting the plumbing of the global energy system. What is unsettling markets now is the growing stagflation risk... It means this is no longer just a geopolitical story but a macro one."

Iran launched at least six waves of missiles at Israel overnight, including new attacks using cluster bombs. 

Air defenses intercepted most of the weapons, but debris and bomblets from the cluster munitions fell in several places, including in Tel Aviv where an elderly man was lightly injured in apartment building, according to medics.

The inside of an apartment destroyed by an Iranian missile strike is seen, with the Tel Aviv skyline visible in the background, following an overnight Iranian attack on March 19, 2026. Ilia YEFIMOVICH/AFP/Getty

One cluster bomb struck the agricultural community of Adanim in central Israel's Sharon area, killing a Thai agricultural worker, according to medics, while another hit a home in Jaljulia, an Arab town also in central Israel, but caused no reported injuries.

There was also a direct hit in the Palestinian town of Bayt Awwa, in the Israeli-occupied West Bank, which Palestinian media reports said had caused some fatalities. There was no immediate confirmation of the casualties there.

The U.K. military's Maritime Trade Operations Center said early Thursday that it had received a report of a vessel being "hit by an unknown projectile" just off the coast of Qatar's Ras Laffan petroleum industry area. 

UKMTO did not identify the vessel or provide any further information about what might have hit it, but it said all crew members were reportedly safe and well.

Iran has attacked commercial vessels in the Gulf region for almost three weeks in retaliation for ongoing U.S.-Israeli strikes, paralyzing marine traffic through the Strait of Hormuz, a vital shipping lane for global oil supplies.

Fewer such attacks had been reported this week, but following Israel's strike on the Iranian South Pars gas field, the regime in Tehran stepped up its strikes on Gulf states early Thursday.

QatarEnergy said that in addition to Iran's Wednesday missile attack on Ras Laffan Industrial City, which it said caused "extensive damage to the Pearl GTL (Gas-to-Liquids) facility," several other facilities were targeted in later attacks early Thursday morning local time.

QatarEnergy said the attacks caused "sizeable fires and extensive further damage" at multiple LNG facilities. No casualties were initially reported, QatarEnergy said.

President Trump said Wednesday on Truth Social that Israel would not attack Iran's South Pars gas field again, but added a warning that if Iran continues to attack Qatar's liquid natural gas facilities, the U.S. will destroy the Iranian gas field.

Mr. Trump wrote that the United States "knew nothing" about Israel's attack on the South Pars field and that Qatar was "in no way, shape, or form, involved with it."

Mr. Trump said Iran then "unjustifiably and unfairly" struck Qatar's Ras Laffan gas facility in response. 

The president declared that "NO MORE ATTACKS WILL BE MADE BY ISRAEL" on the South Pars field, "unless Iran unwisely decides to attack a very innocent, in this case, Qatar - In which instance the United States of America, with or without the help or consent of Israel, will massively blow up the entirety of the South Pars Gas Field at an amount of strength and power that Iran has never seen or witnessed before."

Israeli officials have not commented on the South Pars strike or Mr. Trump's remarks about it.

A team of military planners from the United Kingdom is working with the U.S. military to reopen the Strait of Hormuz, CBS News has learned.

The relatively small team is at U.S. Central Command — which manages U.S. military operations in the Middle East — working on options to reopen the strait. A U.K. official told CBS News that this is an enhancement to the U.K. planning staff already assigned to CENTCOM, which is headquartered in MacDill Air Force Base near Tampa, Florida.

The news was first reported by Radio Free Europe.

The U.K. and other U.S. allies have been reluctant to join U.S. military operations during active combat operations by the U.S. and Israel against Iran, according to multiple diplomats.

After hostilities conclude, allies like the U.K. and Japan may consider sending assets like mine detection materials, according to multiple officials familiar with the ongoing diplomacy. 

This issue is likely to be raised Thursday when Japanese Prime Minister Sanae Takaichi meets with President Trump at the White House. Takaichi has already publicly indicated that Japan's constitution would not permit the use of its self-defense forces to operate in an offensive operation.