QatarEnergy yesterday declared force majeure on some of its long-term LNG supply contracts, affecting customers in Italy, Belgium, South Korea and China, as production and supply disruptions caused by the US-Israeli war on Iran rippled through global energy markets. Petroleum companies in Kuwait and Bahrain have also recently invoked the clause, which permits parties to suspend contractual obligations due to unforeseeable events beyond their control.
The disruption stems from a conflict that has convulsed energy markets since the US and Israel began striking Iran on 28 February. Iranian retaliatory missile and drone attacks across the Gulf region have targeted oil and gas facilities, drawing international condemnation, while Tehran has effectively closed the Strait of Hormuz the critical waterway through which roughly one-fifth of the world’s oil and LNG supplies pass sending energy prices soaring.Qatar has been among the hardest hit.
Last week, Minister of State for Energy Affairs and President and CEO of QatarEnergy HE Saad bin Sherida al-Kaabi disclosed that an Iranian strike on the Ras Laffan gas facility had destroyed approximately 17% of the country’s LNG export capacity, inflicting an estimated $20bn in lost annual revenue and threatening supplies to both Europe and Asia.