Middle East LNG industry remains hostage of Iran war
WHILE Middle Eastern oil exports have rebounded in recent weeks, Qatar’s vast liquefied natural gas export facilities remain hobbled.
The Middle East's liquefied natural gas (LNG) industry is suffering due to the ongoing conflict between the United States, Israel, and Iran. Qatar, the world's second-largest LNG producer, has been significantly impacted by the war, with its main LNG complex at Ras Laffan forced to shut down. Iranian missile attacks have also damaged around 17% of Qatar's export capacity, causing billions in lost revenue and repairs.
According to the International Monetary Fund, Qatar's GDP will contract by 8.6% in 2026, down from a pre-war expectation of 6.1% growth.
The disruption in Qatar's LNG exports has caused shockwaves in global gas markets, with Asian and European prices reaching their highest levels since early 2023. While US LNG exports have risen by 14% in 2026, the gap in the global market remains substantial. Qatar's national energy company, QatarEnergy, expects to restart production within weeks if the Strait of Hormuz reopens, but a full recovery to pre-war norms is unlikely.
The situation is further complicated by the fact that Qatar's LNG facilities are highly integrated and capital-intensive, making it difficult to restart production quickly. The raw gas from the North Field, a massive gas reservoir shared with Iran, contains a significant amount of condensate that needs to be separated and shipped, a process that could quickly deplete storage capacity.
Additionally, Qatar has limited onshore storage capacity for LNG, and the global LNG tanker fleet is smaller than the oil tanker fleet, leading to higher freight rates and less willingness to send LNG carriers through Hormuz.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
