Qatar’s Energy Minister Saad al-Kaabi has cautioned that a prolonged conflict in the Middle East could lead Gulf exporters to declare force majeure, potentially causing oil prices to skyrocket to $150 a barrel and natural gas prices to hit $40 per MMBtu within a short span. The minister emphasized that if the situation persists, all Gulf exporters are likely to invoke force majeure to protect their interests.
Al-Kaabi highlighted the possibility of crude prices reaching $150 per barrel in just two to three weeks if vessels are unable to navigate through the Strait, while natural gas prices could quadruple. The recent surge in Brent crude futures by 20% and West Texas Intermediate by 25% has already reflected the market’s concerns. Currently, Brent is trading over 3% higher at $89 per barrel, and WTI has risen over 5% to $86, marking their highest levels since April 2024.
Qatar, a major LNG producer, declared force majeure after an Iranian drone strike hit its primary LNG facility. The country is assessing the damage to its Ras Laffan LNG plant, the largest in Qatar. The minister noted that even if the attacks cease, restoring normal export operations could take weeks to months due to logistical challenges, with only a handful of LNG carriers available for loading cargo.
Shipping companies are facing increased challenges, with reports of vessels being targeted and insurers raising premiums sharply. The escalating tensions in the region, including Iran’s actions in the Gulf, have led to a surge in oil prices. Concerns have been raised about potential disruptions in shipping lanes and the impact on energy prices, with the situation being closely monitored by industry experts.
