Qatar halts LNG production after fresh Iran strikes on Gulf

Qatar suspended liquefied natural gas production on Monday, causing a massive leap in prices, after Iranian strikes hit Gulf energy facilities in a new escalation of the Middle East war.

QatarEnergy, one of the world's biggest LNG producers, made the shock announcement after two attacks on its facilities. A major Saudi oil refinery was forced into a partial shutdown after it was hit by two drones.

The Dutch TTF natural gas contract, considered the European benchmark for LNG prices, jumped almost 45 percent to more than 46 euros.

Qatar's shutdown came after an Iranian drone targeted QatarEnergy's Ras Laffan Industrial City and another a power plant at a key LNG production site.

"Due to military attacks on QatarEnergy's operating facilities in Ras Laffan Industrial City and Mesaieed Industrial City... QatarEnergy has ceased production of liquefied natural gas (LNG) and associated products," a company statement said.

Meanwhile, a source close to the Saudi government warned that a "concerted" Iranian attack on oil facilities could trigger a military response. The Gulf militaries have so far not hit back against Iran.

The warning followed a drone strike at Saudi Aramco's Ras Tanura refinery, one of the region's biggest, which forced it to halt some operations.

"It depends if this is seen as a direct attack on Aramco by the Iranian leadership or a rogue drone that just came close," the source told AFP, referring to the state oil giant.

Saudi Arabia would target "Iranian oil facilities if Iran mounts a concerted attack on Aramco", the source added.

A separate source told AFP that the Saudi army had raised its readiness level to "full alert".

Blasts echoed across Dubai, Abu Dhabi, Doha and Manama, major cities of the resource-rich Gulf, on the third day of Iranian attacks after its supreme leader was killed in US-Israeli strikes.

Iran's unprecedented bombardment of America's Gulf allies has rattled a region long seen as an oasis of stability in the turbulent Middle East.

Security analyst Anna Jacobs called the war a "nightmare scenario" for the wealthy Gulf.

"These sorts of attacks just completely obliterate the image of these countries as a safe haven," she told AFP.

Smoke poured out of Kuwait City's US embassy, an AFP correspondent saw, and three US fighter jets were shot down by Kuwaiti forces in a friendly-fire incident. Their crews parachuted to safety.

Kuwait was particularly hard-hit on Monday with 19 people injured, the health ministry said. The small, oil-rich country has a large US military presence.

Shrapnel fell at Mina Al Ahmadi refinery, one of Kuwait's biggest, injuring two workers, but did not disrupt production, the Kuwait National Petroleum Company said.

The US embassy in Kuwait City did not announce it had been hit but urged people to stay away, citing "a continuing threat of missile and UAV (drone) attacks".

Elsewhere, three F-15E Strike Eagles were mistakenly shot down by Kuwaiti air defences "during active combat" late on Sunday, the US Central Command said.

In northern Kuwait, smoke billowed over a power station, three witnesses told AFP. An energy ministry spokeswoman said a fuel container was hit by shrapnel after a drone interception, causing a limited blaze.

Bahrain suffered its first death when debris from an intercepted missile sparked a fire on a ship in the port city of Salman, killing one Asian worker and seriously injuring two others, the interior ministry said.

Five people have been killed in the strikes across the Gulf, which have hit ports, airports, residential buildings and hotels as well as military sites.