Key facts
- Qatar's LNG exports have dropped by 96% in the past six months.
- This decline has resulted in an estimated $24 billion loss in sales.
- The damage to Qatar's Ras Laffan LNG complex is expected to cost $20 billion annually in lost revenue.
- The complex may require up to five years to repair.
- QatarEnergy has declared force majeure on some long-term LNG contracts.
- Global LNG prices have surged to three-year highs, impacting European storage efforts.
Qatar's liquefied natural gas (LNG) exports have collapsed by 96%, leading to an estimated $24 billion in lost sales over the past six months following disruptions in the Strait of Hormuz due to the Iran war. Data from ICIS, cited by Reuters, shows a drastic drop from 509 exported cargoes last year to just 18.
The crisis has significantly impacted global energy markets, with the UAE managing to navigate the shipping chokepoint more effectively. The de facto closure of the Strait of Hormuz has trapped approximately 20% of daily global LNG flows. Furthermore, Iranian drone and missile strikes have damaged Qatar's Ras Laffan LNG liquefaction complex, the world's largest.
QatarEnergy anticipates losing about $20 billion annually in revenue due to the damage, with repairs potentially taking up to five years. Consequently, the company has declared force majeure on some long-term LNG contracts. This supply crunch has driven Asian and European gas prices to three-year highs, raising concerns about Europe's ability to fill its gas storage facilities before winter. Europe is reportedly losing the competition with Asia for spot LNG supply amid elevated prices.