Qatar’s LNG Issue to Shake the Entire Global Energy Market

Houston, MINA – Executives from major oil companies warned on Tuesday that damage to Qatar’s liquefied natural gas (LNG) supplies would cause shocks across global energy markets, particularly in Asia.

As reported by The National, Iran’s attack on the industrial city of Ras Laffan last week effectively wiped out 17 percent of Qatar’s LNG export capacity.

The state-run QatarEnergy declared force majeure on Tuesday on its LNG contracts with Belgium, China, Italy and South Korea.

While Qatar’s LNG production halt is set to severely disrupt supply flows to Asia, Shell chief executive Wael Sawan warned the Iran war would lead to broader “ripple effects” in global energy markets.

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“We see, of course, South Asia first to get the brunt. That’s moved to South-East Asia, North-East Asia, and then more so into Europe as we get into April,” Mr Sawan told those attending CERAWeek in Houston, Texas.

Shell has a 30 per cent interest in QatarEnergy LNG. Chief executive Saad Al Kaabi has warned it could take up to five years to rebuild the reduced capacity.

Subsequently, Shell also declared force majeure on its LNG supply contracts for cargoes sourced from QatarEnergy, Reuters reported. Mr Sawan said the Anglo-Dutch major’s Pearl gas-to-liquids centre was safe.

Shares in the company have risen by about 11 per cent since the Iran war began on February 28, despite concerns over attacks on its operations in Qatar.

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Others have seen their shares increase as well, as recent estimates from Jeffries and Rystad Energy anticipate that major US oil companies could see a windfall of about $63.4 billion if crude prices continue to hover around $100 a barrel.

Oil prices were edging higher on Tuesday, with Brent crude trading 2.59 per cent higher at $102.5 a barrel, after reaching as high as $119 a barrel last week on fears of supply chain disruptions caused by the effective closure of the Strait of Hormuz.

QatarEnergy declares force majeure on LNG contracts with Italy, Belgium, South Korea, and China. []

Mi’raj News Agency (MINA)

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