TAIPEI (Taiwan News) — Taiwan faces potential energy supply disruptions after Qatar suspended production at the world’s largest LNG export facility due to an Iranian drone attack.

State-owned QatarEnergy announced the shutdown on Monday, sending European gas prices surging by as much as 54% to their highest level in nearly four years, per Bloomberg. LNG shipments through the Strait of Hormuz were also disrupted after Iran issued a threat to attack any vessels attempting to pass through. 

The Ras Laffan gas complex accounts for 20% of the global LNG exports. The conflict in the Middle East represents the biggest shock to the oil and natural gas markets since Russia invaded Ukraine four years ago.

Qatar is the world’s second-largest LNG supplier, behind the US. Eighty-two percent of its customers are Asian countries, including Taiwan, per Reuters.

Simone Tagliapietra, an analyst at the Brussels-based think tank Bruegel, told Bloomberg that the plant’s closure marks an immediate threat to the security of the LNG supply. “The extent of it will depend on the duration of the shutdown, but we are now into a new scenario," he said.

Shipping risks are exacerbating supply disruptions. The Strait of Hormuz is a vital shipping route, with one-fifth of the world’s natural gas transported through the waterway. 

A sharp decline in traffic has created severe bottlenecks, putting pressure on QatarEnergy’s gas storage capacity. Goldman Sachs Group Inc. estimates that if shipping through the strait were blocked for a month, European gas prices could more than double.