In the escalating tensions gripping the Middle East, Qatar’s Energy Minister Saad al-Kaabi has issued a stark warning that could reshape global energy markets. Speaking amid ongoing conflicts, al-Kaabi revealed that Gulf energy exporters might soon declare ‘force majeure,’ potentially halting oil and gas shipments worldwide.
This legal clause allows companies to suspend contracts without penalty during unforeseen events like wars or disasters. In an exclusive interview with the Financial Times, the minister cautioned that if hostilities persist just a few more days, all regional exporters will have no choice but to invoke it. Those who don’t could face crippling legal liabilities and financial losses.
The stakes are sky-high. Al-Kaabi predicted that blocked tanker routes through vital straits could drive crude oil prices to $150 per barrel within two to three weeks. Natural gas prices might quadruple to $40 per MMBtu, exacerbating an already volatile market.
Oil benchmarks tell the tale of mounting pressure. Brent crude futures surged nearly 20% this week, closing above $89 per barrel on Friday after a 3% daily jump. West Texas Intermediate (WTI) rocketed 25%, hitting $86 per barrel with a 5% gain—levels not seen since April 2024.
Qatar, the world’s second-largest LNG producer, has already pulled the trigger. An Iranian drone strike damaged its massive Ras Laffan LNG plant, Qatar’s largest facility. Damage assessments are underway, but recovery could take weeks to months even if attacks cease immediately.
Logistics are in chaos. Of Qatar’s 128 LNG carriers, only six or seven are currently available for cargo loading. At least 10 ships in the region have been targeted, prompting insurers to hike premiums dramatically. Shipping firms are balking at dispatching vessels into the danger zone.
Iran’s missile and drone barrages, including strikes on a Bahrain oil refinery, have fueled the price rally. DBS Bank’s latest report highlights risks from potential mines in the Strait of Hormuz, which could slow shipments, inflate insurance and shipping costs, and push energy prices even higher.
As the world watches this powder keg, the ripple effects threaten economies everywhere. Governments and industries must prepare for disruptions that could linger far beyond the battlefield.