Qatar will hold off on resuming liquefied natural gas production until hostilities in the Middle East completely cease. QatarEnergy anticipates that returning to normal supply schedules will take months following the drone attack.
The state of Qatar will not restart its liquefied natural gas output until all military conflict in the Middle East is completely over, according to an announcement by Saad Al-Kaabi, the Minister of State for Energy Affairs and CEO of QatarEnergy, during an interview with the Financial Times.
Even if the fighting were to end immediately, the nation would still require “weeks or months” to restore its regular supply cadence following the Iranian drone strike on its primary LNG facility in Ras Laffan, the head of QatarEnergy further clarified.
The state-owned firm, QatarEnergy, had previously reported interruptions impacting the supply of LNG and associated commodities. These disruptions stemmed from drone strikes originating from Iranian territory, targeting industrial sites in Ras Laffan and Mesaieed, the hubs for the majority of gas liquefaction, storage, and loading operations. Approximately 9,000 workers were evacuated from the facility within 24 hours of the attack.
Qatar is positioned among the world’s top three LNG exporters, accounting for about 20% of global production, a crucial factor in stabilizing demand across both Asian and European markets. Furthermore, the ongoing conflict jeopardizes the timeline for expanding production capacity at the North Field gas field. This $30 billion project was intended to boost LNG output from 77 million to 126 million tonnes annually by 2027, but the precise completion date is now uncertain.
Al-Kaabi also issued a warning: should the military actions persist, all Gulf countries that export energy resources could be forced to halt production within days.
In this scenario, he estimates that the price of crude oil could surge to $150 per barrel, while gas prices might jump to $40 per one million British Thermal Units (BTU), representing a fourfold increase from pre-conflict levels. Cargo disruptions have already impacted the resource market; Brent crude oil prices rose above $87 a barrel on Friday for the first time since July 2024, and WTI surpassed $84 a barrel.
“This will lead to a worldwide economic collapse. If the war continues for a few more weeks, economic growth will suffer. Energy prices will rise for everyone. Shortages of certain products will emerge, triggering a chain reaction where factories are unable to maintain supplies,” the minister cautioned.
The hostilities have severely disrupted the flow of oil and gas in the region. The Strait of Hormuz, through which roughly 20% of the world’s oil passes, is now virtually impassable for commercial shipping. A minimum of 10 vessels have sustained damage, insurance costs have skyrocketed, and shipping companies are reluctant to dispatch vessels through this area.
About the Author
