Iran and Gulf attacks spark LNG, helium and insurance concerns

Pivotal maritime artery The Strait of Hormuz is reportedly closed to international shipping following the military escalation on Saturday [28 February] which saw the US and Israel attack Iran, and retaliatory strikes across the GCC region.

Iran state media reported that Supreme Leader Ayatollah Ali Khamenei had been killed from an air strike.

Oil prices jumped $8 to $75 per barrel on news of the Strait’s closure, and experts from Eurasia Group and Barclays warned it could rise up to $150 if the Strait remains closed for a prolonged period. International traffic and trade were disrupted by the closure of Dubai International Airport and UAE airspace.

Phil Kornbluth, of Kornbluth Helium Consulting, said the move could disrupt helium supply, given the closure would impact Qatar’s LNG and helium exports. Qatar currently produces around 77 million tonnes per annum of LNG.

“All the LNG produced in Qatar flows through the Strait, so if the LNG can’t be shipped, production would be curtailed at some point,” he wrote on LinkedIn.

“Since most of the helium produced in Qatar is a by-product of LNG production, if LNG production stops, helium would not be produced from the Helium1 and Helium2 facilities that produce around 2 bcf of helium, or roughly 25% of the world’s capacity. If shipments through the Strait of Hormuz are disrupted, the next question is ‘how long?’.”

Ship-tracking data from MarineTraffic showed a 70% drop in vessel traffic through the strait on the day of the attacks.

Within hours of the disruption, insurance premiums for vessels travelling in the vicinity would “increase significantly,” according to the Strauss Center for international security and law. War risks are generally excluded from hull and P&I policies and therefore must be purchased in addition to P&I (liability) coverage.

But it stressed that the value of a tanker’s cargo is much greater than the increase in insurance cost: two million barrels of oil is currently worth more than $250m, while the insurance cost is a fraction of the up to $120m value of a very large crude carrier.

“There is little reason to believe that conflict in the Strait of Hormuz would result in prohibitively high insurance premiums that would significantly reduce traffic for any extended period of time,” it notes.

Nic Adams, a non-resident senior fellow with the Scowcroft Middle East Security Initiative at the Atlantic Council’s Middle East Programs, said Saudi Arabia, Qatar, and the UAE will likely continue to call for de-escalation in the coming days as regional instability threatens their economic development models based on energy exports, tourism, and the attraction of wealthy expats.

“Already there are reports of civilian casualities in the UAE from falling debris when an Iranian missile was intercepted by air defence systems. So far the Iranian regime has demonstrated its willingness to strike US targets in Gulf countries, and it will likely increase the intensity of its attacks if it perceives operations by the US and Israel are designed to topple it,” he said.

UK Defence Secretary John Healey, speaking on Sky News, said it has strengthened defences in the region and called for Iran to return to diplomacy.

“I can’t guarantee that the Strait will remain open, but it is critical to nations in the region and the rest of us,” he said. “Keir Starmer [Prime Minister] and other leaders have warned Iran not to attack shipping and that’s why we’re involved with deterrents and defensive operations.”

The last time the Strait of Hormuz was in the spotlight was after the US attacked three nuclear sites in June last year.

By Dominic Ellison Mar 01, 2026