Qatar Loses $24 Billion as LNG Exports Collapse 96%

Six months after the Iran war disrupted Qatar's liquefied natural gas (LNG) exports through the Strait of Hormuz, the country has suffered a staggering $24 billion loss in sales, with exports plummeting by up to 96%, according to calculations by Reuters. The number of LNG cargoes exported by Qatar has dwindled to just 18, down from 509 shipments in the corresponding period last year, as reported by data intelligence firm ICIS to Reuters.

Qatar's LNG exports are significantly impacted by the conflict, as the nation has struggled to navigate the Hormuz Strait compared to neighboring countries like the UAE. The reduced exports from Qatar have far-reaching consequences for the global LNG and gas markets, benefiting U.S. LNG exports due to high prices and a conflict-free origin, while Europe grapples with the absence of Qatari shipments, struggling to replenish gas storage facilities before the winter.

The de facto closure of the Hormuz Strait has blocked approximately 20% of daily global LNG flows. Moreover, Iranian drone and missile strikes on energy infrastructure in the region have damaged Qatar's primary LNG liquefaction complex, Ras Laffan, which will likely cost the country around $20 billion annually in lost revenue and up to five years for repair.

QatarEnergy, Qatar's state firm, has declared force majeure on some long-term LNG contracts for up to five years. The LNG shortage has driven Asian and European gas prices to their highest levels in three years, raising concerns about the rebuilding of gas inventories in Europe ahead of the next winter. European gas prices are expected to rise by December for storage to fill up adequately if the Hormuz crisis persists and keeps spot LNG prices in Asia elevated, according to Goldman Sachs.

Since the Middle East crisis began, Europe has been losing its competitive edge with Asia for spot LNG supply due to soaring prices in the absence of most Qatari LNG term volumes.