New Delhi, March 6: Qatar’s Energy Minister, Saad Al-Kaabi, has issued a stark warning that ongoing conflict in the Middle East could lead to Gulf exporters declaring force majeure. This declaration would halt oil supply, potentially driving crude oil prices to $150 per barrel and natural gas prices to $40 per MMBtu (metric million British thermal units) within weeks.
In an interview with the Financial Times, Al-Kaabi stated, “Countries that have not yet declared force majeure may be compelled to do so in the coming days if the situation persists. All exporters in the Gulf region will have to declare force majeure.”
He further explained, “If they do not act, they will eventually face legal obligations, and that is their choice.”
The minister noted that if tankers and other vessels are unable to navigate the strait, crude oil prices could reach $150 per barrel within two to three weeks, while natural gas prices could quadruple.
This week, Brent crude futures surged by 20%, and West Texas Intermediate (WTI) crude rose by 25%. On Friday, Brent traded over 3% higher at $89 per barrel, while WTI climbed more than 5% to $86. Both benchmarks are trading at their highest levels since April 2024.
Qatar, the world’s second-largest producer of liquefied natural gas (LNG), has already declared a force majeure following a drone attack on its Ras Laffan LNG plant by Iran. This facility is the largest LNG plant in the country, and efforts are ongoing to assess the damage.
The minister indicated that even if the attacks cease immediately, logistical challenges could delay the resumption of normal export operations by “weeks to months.” Currently, only six or seven of Qatar’s 128 LNG carriers are available for loading.
According to the Financial Times, shipping companies are hesitant to send vessels from the region following reports of attacks on at least ten ships and a significant increase in insurance premiums.
The spike in oil prices follows missile and drone attacks by Iran in the Gulf region, including a strike on a refinery in Bahrain.
My name is Himanshu Tiwari. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including TECHNOLOGY, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
Leave a Comment