In a stark warning published Friday by the Financial Times, Qatar’s energy minister said the ongoing war in the Middle East threatens to “bring down the economies of the world” — and predicted that every Gulf energy exporter would be forced to suspend shipments within days if the conflict does not stop.
Saad al-Kaabi, who also serves as chief executive of QatarEnergy, made the comments in an exclusive interview with the FT, one of the most consequential statements from a Gulf official since hostilities began. His remarks sent Brent crude rising 2.5% to $87.60 a barrel on Friday morning in Europe, its highest point since the start of the conflict, while European gas prices climbed 5%.
‘All Exporters Will Call Force Majeure’
Kaabi told the FT that Qatar — the world’s second-largest producer of liquefied natural gas — was left with no choice but to declare force majeure this week after an Iranian drone strike hit its Ras Laffan LNG plant, the country’s largest. He said the company evacuated roughly 9,000 workers within 24 hours after receiving military warnings of an imminent threat to offshore facilities.
“When we have our people in danger and we’re actually being hit in a military zone and we can’t work anymore, and we can’t put our people in harm’s way, we have to declare force majeure,” he told the FT.
He added that what happened at Ras Laffan is only the beginning. “Everybody that has not called for force majeure we expect will do so in the next few days that this continues,” Kaabi said in the FT interview. “All exporters in the Gulf region will have to call force majeure.”
Oil at $150, Gas Prices Four Times Higher
If tankers and merchant vessels remain unable to transit the Strait of Hormuz Kaabi forecast in the FT interview that crude prices could hit $150 a barrel within two to three weeks. He alos predicted that gas prices would rise to €117 per MWh, nearly four times the level they were before the war began.
Traffic through the strait has ground to a halt since the U.S. and Israel launched military operations against Iran. At least 10 ships have been struck, insurance premiums have surged, and shipping owners have been reluctant to risk their vessels and crews in the waterway that runs along the Iranian coastline.
President Donald Trump said this week the U.S. Navy would escort commercial ships through the strait and offered additional insurance to shipping companies. But Kaabi was skeptical, telling the FT: “The way that we are seeing the attacks, bringing ships into the strait … it’s too dangerous. It’s too close to the shore to bring ships in. It will be difficult to convince ships to go in.”
A Chain Reaction Beyond Energy
The minister warned the FT that the fallout would not be limited to oil and gas. The Gulf region supplies much of the world’s petrochemicals and fertilizer feedstocks, and a prolonged disruption of maritime trade through Hormuz would reverberate across multiple global industries.
“This will bring down the economies of the world,” Kaabi told the FT. “If this war continues for a few weeks, GDP growth around the world will be impacted. Everybody’s energy price is going to go higher. There will be shortages of some products and there will be a chain reaction of factories that cannot supply.”
Europe, Kaabi said in the FT interview, would feel significant pain even though Qatar exports only a small proportion of its gas there. Asian buyers would outbid European ones for whatever gas remains available on the open market, while other Gulf suppliers would be unable to fulfill their own contractual obligations to European clients.
No Resumption Until Hostilities Fully Cease
Kaabi was unequivocal in the FT interview about what it would take to restart production. “The signal is when our military says there is a complete stop of hostilities and we are not being attacked anymore,” he said. “We are not going to put our people in harm’s way.”
He also pushed back against any suggestion that invoking force majeure would damage Qatar’s hard-won reputation as the world’s most reliable LNG supplier. “We don’t think anybody would dare to come to us and say we are not reliable because you were being bombed and you did not deliver,” he told the FT.
Kaabi further noted that even if Qatar wanted to make good on missed shipments, it would be impossible to source replacement supply. “Let’s assume you want to buy 77 million and deliver it to customers,” he said in the FT interview. “There is no 77 million tonnes lying around for you to buy.”
Source: FT.com
