LNG

CEO Saad al-Kaabi says QatarEnergy may have to declare force majeure on long-term contracts for up to five years.

Iranian ⁠attacks on Qatar have wiped out ⁠17 percent of its liquefied natural gas (LNG) export capacity, causing an estimated $20bn in lost annual revenue and threatening supplies to Europe and ⁠Asia, QatarEnergy’s CEO says.

Saad al-Kaabi told the Reuters news agency on Thursday that two of Qatar’s 14 LNG trains, the equipment used to liquefy natural gas, and one of its two gas-to-liquids facilities were damaged in Iranian strikes this week.

The repairs will sideline 12.8 million tonnes of LNG production per year for three to five years, he said.

“I never in my wildest dreams would have thought that Qatar would be – Qatar and the region – in such an attack, especially from a ‌brotherly Muslim country in the month of Ramadan, attacking us in this way,” al-Kaabi said in an interview.

His comments came hours after Iran on Wednesday launched a series of attacks on oil and gas facilities across the Gulf region after the Israeli military bombed its South Pars offshore gasfield.

Tehran has been firing missiles and drones across the Middle East in response to the United States-Israeli war on Iran, which began on February 28.

It also has essentially blocked the Strait of Hormuz, a critical Gulf waterway through which about one-fifth of the world’s oil and LNG supplies transit, fuelling soaring petrol prices and global concerns about rising inflation.

Iran’s attacks on energy infrastructure have heightened tensions with its Arab Gulf neighbours, who have condemned the strikes as a violation of international law.

Iranian Foreign Minister Abbas Araghchi said on Thursday that his country would show “ZERO restraint” if its infrastructure is struck again as the Israeli attack on the South Pars gasfield continued to spur condemnation.

“Our response to Israel’s attack on our infrastructure employed FRACTION of our power. The ONLY reason for restraint was respect for requested de-escalation,” Araghchi wrote on X.

“Any end to this war must address damage to our civilian sites.”

‘Stay away from oil and gas facilities’

During Thursday’s interview with Reuters, al-Kaabi said QatarEnergy may have to declare force majeure on long-term contracts for up to five years for LNG supplies bound for Italy, Belgium, South ⁠Korea and China due to the two damaged trains.

“I mean, these are long-term contracts that we have to declare force majeure. We already declared, but that was a shorter term. Now it’s whatever the period is,” he said.

QatarEnergy had declared force majeure on its entire output of LNG after earlier attacks on its Ras Laffan production hub, which came under fire again on Wednesday. “For production to restart, first we need hostilities to cease,” al-Kaabi said.

The damaged units cost about $26bn to build, al-Kaabi said. He also told Reuters that the scale of the damage from the attacks has set the region back 10 to 20 years.

“If Israel attacked Iran, it’s between Iran and Israel. It has nothing to do with us and the region,” he said.

“And so now, in addition to that, I’m saying that everybody in the world, whether it’s Israel, whether it’s the US, whether it’s any other country, everybody should stay away from oil and gas facilities.”

Published on 09/03/2026 – 17:06 GMT+1•Updated
17:14

G7 finance ministers discussed a coordinated release of emergency oil reserves on Monday but failed to reach agreement, with France’s Roland Lescure saying the group was “not there yet” on a deal.

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The G7 was exploring a coordinated release of emergency oil reserves to tamp down fears of an impending shortage but stopped short of a deal.

Japan’s finance minister, Satsuki Katayama, said the International Energy Agency (IEA) explicitly requested the coordinated release during the G7 meeting, according to Bloomberg.

Brent crude briefly hit $119.50 a barrel on Monday morning, its highest level since 2022, having jumped roughly 25% since Friday as the Iran war intensified, raising fears over global production and shipping.

At the time of writing, oil prices pared gains and are trading slightly below $100 a barrel, as markets remain highly volatile.

Stock markets fell worldwide on concerns the global economy would not be able to absorb a sustained oil price shock.

Equity markets drop over uncertainty

At the open on Monday, the S&P 500 fell 1.3%, coming off its worst week since October. The Dow Jones Industrial Average was down 1.5% and the Nasdaq composite 1.2% lower.

The most immediate pain on Wall Street is hitting companies with large fuel bills. Carnival lost 7.3%, United Airlines sank 6.9% and Old Dominion Freight fell 3.8%.

Retailers dependent on long-haul shipping, whose customers are also facing higher petrol costs, also struggled. Best Buy fell 4.4% and Williams-Sonoma dropped 4%.

The moves followed steeper losses in European and Asian markets, where economies are more exposed to imported oil and gas. South Korea’s Kospi sank 6%, Japan’s Nikkei 225 dropped 5.2% and Europe’s Euro Stoxx 50 tumbled 1%.

Potential stagflation scenario

Since the war with Iran began, the central worry for financial markets has been how high oil prices will go and how long they will stay there.

If prices stay very high for very long, household budgets already stretched by high inflation could break under the pressure.

Meanwhile, companies would see their own bills jump for key items such as fuel and stock items, as well as for powering their data centres.

It all raises the possibility of a worst-case scenario for the global economy: stagflation, or a period when economic growth stagnates and inflation remains persistently high.

Late on Sunday, President Donald Trump countered this narrative by assuring that high oil prices at the moment are both worth the cost and only temporary.

“Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and world, safety and peace,” he said in a post on Truth Social.

In the bond market, the yield on the 10-year Treasury held at 4.15%, where it ended Friday.

Worries about high inflation and oil prices are applying upward pressure on Treasury yields, while risks of a slowing economy are pulling in the opposite direction.

Concerns about stagflation deepened on Friday following a surprisingly weak US jobs report showing that employers cut more jobs last month than they added.

QatarEnergy has suspended liquefied natural gas (LNG) production following a drone attack, straining the global LNG market.

On Monday, Iranian drones struck two sites, according to Qatar’s Ministry of Defence: a water tank at a power plant in Mesaieed Industrial City and an energy facility in Ras Laffan belonging to QatarEnergy, the world’s largest LNG producer.

While no casualties were reported, QatarEnergy suspended the production of LNG and other products at the impacted sites for security reasons.

Why did QatarEnergy suspend operations?

The drone attacks hit the Ras Laffan complex, which is home to processing units for liquefied natural gas set to be exported.

The state-owned energy company was forced to declare what is known as force majeure, when a company is freed from contractual obligations in the event of extraordinary circumstances, such as a drone attack, according to Reuters and Bloomberg News, citing people familiar with the matter.

This comes at a time when intensifying sea battles between Iran and the United States, coupled with missiles flying over the region, have effectively choked the Strait of Hormuz, a strategic trade route. At least 150 vessels have dropped anchor, including those carrying LNG, in the strait and surrounding areas, according to Reuters.

Traffic in the strait for both LNG and oil has declined by 86 percent, with roughly 700 ships sitting idle on either side of the passage, according to the Anadolu news agency.

How will this impact the broader global LNG market?

Qatar’s LNG exports represent 20 percent of the global market. With fewer products reaching the market, LNG supply is down, causing prices to surge.

“Definitely an escalation overnight with pressure on energy infra in the Gulf,” said Rachel Ziemba, a senior fellow at the Center for a New American Security, a think tank.

The countries hit the most directly are Asian markets, particularly Bangladesh, India, and Pakistan.

China is the world’s largest importer of natural gas, but it gets the majority of its imports from Australia, accounting for 34 percent of its imports, according to the US Energy Information Administration.

Maksim Sonin, an energy expert at Stanford University’s Center for Fuels of the Future, however, said that while QatarEnergy’s decision would bring “volatility” to energy markets, he wouldn’t describe the situation as a “crisis” just yet.

“We will see near-term volatility in the LNG market, especially if infrastructure in Qatar and other hubs is damaged,” Sonin told Al Jazeera. However, he added, “I do not expect the 2022 gas crisis to repeat in Europe,” referring to the period following Russia’s full-fledged invasion of Ukraine, when many European nations tried to dramatically scale back their dependence on Russian oil and gas.

Which are the world’s largest LNG exporters?

Until 2022, Russia was the world’s biggest exporter of LNG, but its sales have plummeted since its war on Ukraine began.

Now, the US is the world’s largest exporter of LNG, followed by Qatar and Australia.

Will this add pressure on Europe?

While 82 percent of QatarEnergy’s sales are to Asian countries, the halt puts increased pressure on other markets across the globe, too, particularly in Europe.

In effect, a smaller supply of gas will need to meet the same global demand. As a result, gas prices have already started soaring: Benchmark Dutch and British wholesale gas prices soared by almost 50 percent, while benchmark Asian LNG prices jumped almost 39 percent, on Monday after the QatarEnergy announcement.

“Not good if Qatar stays offline for long, of course,” said Ziemba. The only silver lining for Europe: “At least the worst of the winter in Europe may be behind,” Ziemba pointed out.

The European Union’s gas coordination group will meet on Wednesday to assess the impact of the widening conflict in the Middle East, a European Commission spokesperson told Reuters on Monday. The group includes representatives from member state governments. It monitors gas storage and security of supply in the EU, and coordinates response measures during crises.

The benchmark European gas price, traded on the Dutch TTF hub, rose by as much as 45% to around €46 per megawatt-hour in early afternoon trading.

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UK natural gas prices also surged, with the NBP benchmark climbing sharply in tandem with continental markets.

High market volatility has driven sharp minute-by-minute swings.

The sharp increase follows US and Israeli strikes on Iran, which have heightened tensions in a region critical to global energy flows.

QatarEnergy announced early Monday afternoon that it had halted liquefied natural gas production linked to the giant North Field gas reservoir following an attack on its facilities, but gave no further details as to the extent of the impact on operations.

Strait of Hormuz disruption raises global concerns

A large proportion of the world’s energy supply comes from the Middle East, and before the announcement from Qatar, the seaborne oil and gas transport was at the centre of market fears.

The Strait of Hormuz, a narrow maritime passage largely controlled by Iran, is one of the world’s most important energy chokepoints for oil and LNG, including exports from Qatar.

Iran has moved to block traffic through the strait following the strikes, raising concerns about supply interruptions.

“In modern history, the Strait of Hormuz has never been actually closed, albeit a temporary slowing of traffic has occurred,” said Maurizio Carulli, global energy analyst at Quilter Cheviot.

He added that “about 20% of global oil supply transits through the Strait of Hormuz and 38% of seaborne crude oil trade.”

Carulli does not expect oil shipping companies to send through their vessels until “the military situation de-escalates”, due to the risk of ship damage or seizures, as well as temporary unavailability of insurance cover.

“Satellite data shows that oil tanker transit had virtually halted over the weekend, a precautionary measure by shipping companies,” he added.

Any sustained disruption could affect LNG shipments from Qatar, which supplies around 12% to 14% of Europe’s LNG imports.

Europe exposed to global competition

While Europe does not rely primarily on Qatari gas, analysts say the indirect impact could still be significant.

If supplies to Asia are disrupted, buyers there may seek alternative cargoes, increasing global competition for LNG.

This would likely push prices higher worldwide, including in Europe.

Qatar, the world’s third-largest LNG exporter after the United States and Australia, has become an increasingly important supplier to Europe since Russia’s invasion of Ukraine in 2022 forced European countries to reduce their dependence on Russian pipeline gas.

Low storage levels increase vulnerability

Europe’s relatively low gas storage levels have added to market anxiety.

Storage across the European Union is currently below 30% capacity as the winter heating season draws to a close, compared with around 40% at the same point last year.

Germany and France, the bloc’s two largest economies, are among the most vulnerable.

Germany’s gas storage facilities were 20.5% full as of Saturday, while France’s stood at 21%, according to data from Gas Infrastructure Europe.

Lower reserves leave countries more vulnerable to supply disruptions and price volatility, particularly if global LNG markets tighten further.

Qatar’s state-run energy firm says it has halted liquefied natural gas production after Iranian attacks, sending gas prices soaring in Europe, as Saudi Arabia announced it was temporarily shutting down some units of the Ras Tanura oil refinery located near the country’s eastern region after a fire broke out following a drone attack.

“Due to military attacks on QatarEnergy’s operating facilities in Ras Laffan Industrial City and Mesaieed Industrial City in the State of Qatar, QatarEnergy has ceased production of liquefied natural gas (LNG) and associated products,” the world’s largest LNG producer said in a statement on Monday.

Shortly after the announcement, natural gas prices in Europe soared by almost 50 percent.

Earlier, Qatar’s Defence Ministry said the country was attacked by two drones launched from Iran. “One drone targeted a water tank belonging to a power plant in Mesaieed, and the other targeted an energy facility in Ras Laffan Industrial City, belonging to QatarEnergy, without reporting any human casualties,” it said in a statement.

“All damages and losses resulting from the attack will be assessed by the relevant authorities, and an official statement will be issued later,” it added.

The Saudi Ministry of Defence, in reports carried by the state-run Saudi Press Agency (SPA), said two drones had “attempted to attack” the Ras Tanura refinery on Monday morning, and that a “small” fire had broken out after they were intercepted.

Footage verified by Al Jazeera showed plumes of smoke rising from the oil facility, located on Saudi Arabia’s Gulf coast. The ministry said the refinery “sustained limited damage”, but there were no casualties.

Ras Tanura oil refinery, one of the world’s largest oil processing facilities located near the eastern city of Dammam, has a capacity of 550,000 barrels per day. The facility is home to one of the largest refineries in the Middle East and is considered a cornerstone of the kingdom’s energy sector.

The attacks come as oil tankers have been piling up on either side of the Strait of Hormuz, through which about a fifth of the world’s seaborne oil and the bulk of Qatari gas flows.

The maritime disruptions and fears of a prolonged conflict have led to a sharp rise in global oil prices, which will have a significant impact on the global economy.

Iran has been launching retaliatory strikes, mainly targeting Israel and military facilities of the United States across the Middle East, after the US and Israel launched massive air strikes on the country.

In a statement published by SPA, the Saudi Ministry of Energy said some operations had been halted as a “precautionary measure” and that it did not foresee “any impact on the supply of petroleum products to local markets”.

Saudi Arabia had earlier said it would “take all necessary measures to defend its security and protect its territory, citizens, and residents, including the option of responding to the aggression” after Iran targeted the capital Riyadh and the country’s eastern region with strikes over the weekend.

The US, Bahrain, Jordan, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates issued a joint statement on Sunday condemning Iranian attacks across the region and affirming their right to self-defence.

Rob Geist Pinfold, lecturer in defence studies at King’s College London, told Al Jazeera that Iran “knows exactly what it’s doing” by attacking the Gulf countries.

“These countries have less of an appetite for a fight because, at the end of the day, this is not their war. So, Iran is banking that they will want a ceasefire as soon as possible, that they will be pressuring the Trump administration. But we have no signs of that whatsoever so far,” he said.

Pinfold added that there seems to be a “show of force” and “of unity” coming from the Gulf states, at least rhetorically.

“They’re trying to get the message across that they are one and that they are united and that they are resilient,” Pinfold said. “But under the surface, there are profound disagreements here about how to engage with Iran and whether to engage with Iran at all.”