When Qatar said on Monday it was shutting 20% of the world’s liquefied natural gas production after an Iranian attack, the energy market had a flashback to the crisis that hit in Europe in 2021 and 2022 after Russia invaded Ukraine. Thankfully, not every gas crisis is created equal. With a bit of luck, the current upheaval may not be as catastrophic for energy prices. If so, it will be all thanks to China.

The Qatari announcement was shocking. In a terse, 52-word communique, it laid out the news: The Ras Laffan and Mesaieed industrial cities, two sprawling complexes where gas gets super-cooled to about -160C (-256F), transforming into a liquid that loads into tankers, had come under “military attack.” LNG production had “ceased” completely for the first time in 30 years.

Within seconds, as the headlines flashed in front of energy traders, the cost of European natural gas, a proxy for global LNG prices, surged briefly by more than 50%. The parallels between the current spike and the one in 2021–22, after Russia reduced supply to Europe and ultimately shut it down, were easy to draw.

But the resemblance ends there. European gas prices on Monday zoomed to almost €50 per megawatt hour ($58.44) at their worst moment. The market ultimately closed at about €45 per MWh, up 39% on the day. Compare that price with the all-time high in March 2022, set after Russian tanks rolled into Ukraine, of €345 per MWh ($403.20).

© Bloomberg