Qatar’s energy minister has warned that the ongoing conflict in the Middle East could trigger a global economic crisis, potentially driving oil prices to $150 a barrel and forcing Gulf energy producers to halt exports within weeks. Saad al-Kaabi, Minister of State for Energy Affairs and the President and CEO of QatarEnergy, told the Financial Times that a continued escalation of the conflict could lead to widespread energy shortages and disrupt global supply chains.
The warning comes after Qatar halted its production of liquefied natural gas (LNG) on Monday, in response to Iranian strikes against Gulf countries following U.S. And Israeli attacks. Qatar’s LNG production accounts for approximately 20% of global supply, playing a critical role in meeting demand in both Asian and European markets. Al-Kaabi anticipates that other Gulf exporters will soon follow suit, invoking force majeure – a clause releasing parties from contractual obligations due to unforeseen circumstances.
“Everybody who has not called for force majeure we expect will do so in the next few days if this continues. All exporters in the Gulf region will have to call force majeure,” Al-Kaabi stated. He cautioned that failure to do so could result in legal liabilities for energy companies.
Al-Kaabi further predicted that a prolonged conflict would have a significant impact on global GDP growth. “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,” he said.
Even a swift resolution to the conflict would not result in an immediate return to normal operations, according to Al-Kaabi. He estimates that it would take Qatar “weeks to months” to restore its LNG deliveries to previous levels. This assessment underscores the logistical challenges and potential long-term disruptions to the global energy market.
The potential for a surge in oil prices to $150 a barrel is predicated on the disruption of shipping through the Strait of Hormuz, a vital oil export route connecting Gulf producers with global markets. According to Al-Kaabi, if vessels are unable to transit the strait, crude prices could reach that level within two to three weeks.
Energy markets have already reacted to the escalating tensions. LNG prices in Europe have increased by more than 50% since last week, while the Brent Crude Oil spot price rose to over $82 on Friday. Greg Jackson, founder of Octopus Energy, described the markets as being “in turmoil,” noting that the wholesale price of gas has roughly doubled in the past week. Jackson similarly stated that Iranian actions have effectively closed the Strait of Hormuz, impacting 20% of the world’s oil and gas supplies.
The warnings from Qatar approach as Israel reportedly destroyed an Iranian military command bunker in Tehran, according to the Israel Defense Forces (IDF). The situation remains fluid, with no immediate indication of a de-escalation or a negotiated settlement.
