Key facts
- QatarEnergy has extended its force majeure on LNG deliveries due to the ongoing blockade of the Strait of Hormuz.
- Cargo cancellations will continue through October for Pakistan and Bangladesh, and into early November for Edison of Italy.
- LNG cannot be easily reloaded via ship-to-ship transfer, unlike crude oil, making alternative routes difficult.
- Qatar has reportedly lost $24 billion in LNG sales since the blockade began.
- LNG exports have seen a drastic reduction, from 509 cargoes last year to just 18 in the comparable period.
QatarEnergy has extended its force majeure on liquefied natural gas (LNG) deliveries for several more weeks, as the Strait of Hormuz remains blocked to LNG traffic. The state-owned company has informed buyers in Pakistan and Bangladesh that cargo cancellations will persist through October, according to traders familiar with the matter.
Deliveries to Europe have also been impacted, with Italian energy firm Edison stating that the force majeure and cancellations have been extended into early November. Previously, Edison had reported that QatarEnergy cancelled three additional LNG cargoes in late July, extending the force majeure period through September. Since April, a total of 24 LNG cargoes for Edison, amounting to approximately 3 billion cubic meters of natural gas, have been subject to force majeure.
The ongoing disruption stems from the continued blockade of the Strait of Hormuz, which is critical for LNG exports from the Persian Gulf. Unlike crude oil, which has seen producers utilize ship-to-ship transfers and alternative routes to maintain flows, LNG cannot be easily rerouted in the same manner. This has severely impacted Qatar's export capabilities.
Earlier this week, Reuters calculations indicated that Qatar has lost an estimated $24 billion in sales over the past six months due to the crisis. Data from ICIS, cited by Reuters, shows a dramatic drop in LNG exports, with only 18 cargoes shipped from Qatar compared to 509 in the same period last year.