Escalating Middle East hostilities have prompted Qatar’s Energy Minister Saad al-Kaabi to deliver a sobering alert. Continued warfare risks Gulf nations imposing force majeure on exports, potentially driving oil prices to $150 per barrel and natural gas to $40/MMBtu in weeks.
In remarks to the Financial Times, al-Kaabi explained that exporters unable to ship via contested straits face tough choices. ‘They’ll declare force majeure in days, or pay dearly legally,’ he noted. The result: supply shutdowns fueling explosive price hikes.
This week’s market frenzy reflects the peril. Brent crude rose 20%, ending Friday over $89 after a 3% surge. WTI gained 25%, closing at $86—multi-month highs.
Qatar acted first, declaring force majeure at Ras Laffan post-Iranian drone hit. As the No. 2 global LNG exporter, the plant’s downtime looms large. Even sans further attacks, normalizing operations could span weeks to months; only 6-7 of 128 carriers are operational.
Attack fears have idled vessels and spiked insurance costs, with shippers wary after strikes on multiple ships. Iran’s aggressive moves, from drones to refinery hits in Bahrain, intensify the standoff. Stakeholders worldwide watch anxiously as energy security hangs in balance.