Qatar’s Energy Minister Saad al-Kaabi has warned that war in the Middle East continuing for a “few days” could cause Gulf exporters declaring force majeure, halting deliveries, pushing oil to $150 a barrel and natural gas to $40 per MMBtu (Metric Million British Thermal Unit) within weeks.
“Everybody that has not called for force majeure we expect will do so in the next few days if this continues. All exporters in the Gulf region will have to call force majeure,” the minister told the Financial Times.
“If they don’t, they are at some point going to pay the liability for that legally, and that’s their choice,” he was quoted as saying by the daily.
The minister said that crude prices could reach $150 a barrel within two to three weeks if tankers and other vessels remain unable to pass through the Strait, while natural gas prices could jump four times.
Brent crude futures have surged 20 per cent this week, while West Texas Intermediate (WTI) has jumped 25 per cent. On Friday, Brent was trading over 3 per cent higher at $89 per barrel while WTI rose over 5 per cent to $86. Both benchmarks are trading at their highest levels since April 2024.
Qatar, the world’s second-largest producer of liquefied natural gas (LNG), declared force majeure this week after an Iranian drone strike hit its Ras Laffan LNG facility. The facility is the country’s largest LNG plant, and efforts are being taken to assess the extent of the damage to it.
Even if attacks stopped immediately, restoring normal export operations could take “weeks to months” due to logistical disruptions, the minister noted. Only six or seven of Qatar’s 128 LNG carriers were currently available to load cargo, he said.
With at least 10 ships reportedly struck and insurers sharply raising premiums, shipping companies have become reluctant to send vessels through the region, the Financial Times said.
Oil prices surged as Iran launched missiles and drones across the Gulf, striking an oil refinery in Bahrain.
A recent report from DBS Bank warned that despite the Iranian Navy’s warships posing minimal threat, the Islamic Republic’s ability to deploy mines and asymmetric attacks in the Strait of Hormuz could slow shipments, raise insurance, shipping costs and energy prices.