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The sustained force majeure by QatarEnergy due to ongoing disruptions in the Strait of Hormuz poses significant risks to global energy security, particularly for import-dependent nations in Europe and Asia. The prolonged absence of Qatari LNG supply exacerbates existing market tightness, contributing to price volatility and potentially higher energy costs for consumers and industries. The reliance on alternative, often more expensive, supply sources and the depletion of strategic gas reserves in some regions highlight the vulnerability of the current energy landscape. The timeline for the full restoration of Qatari exports hinges on the resolution of geopolitical factors affecting the Strait of Hormuz, with repairs to damaged facilities adding a further layer of uncertainty. The event underscores the critical nature of key maritime chokepoints in global energy trade and the challenges associated with diversifying energy sources in the face of geopolitical instability.
QatarEnergy has prolonged its force majeure declaration on liquefied natural gas (LNG) shipments, continuing to impact deliveries to Europe and Asia as disruptions in the Strait of Hormuz persist. The state-run energy giant’s decision means further cancellations of LNG cargoes, extending a situation that has already removed a significant volume of Qatari supply from the global market.
Italian utility Edison confirmed that QatarEnergy will be unable to deliver an additional five LNG cargoes previously scheduled between late September and early November. This latest extension brings the total number of affected cargoes under Edison’s contract to 29 since April, representing approximately 3.8 billion cubic metres of natural gas. While Edison has managed to secure replacement supplies for 21 of these cargoes, equivalent to about 2 billion cubic metres, and continues to meet its own customer commitments, the broader implications of sustained Qatari supply interruptions are significant.
Reports indicate that QatarEnergy has also notified buyers in Pakistan that cancellations will extend into October, while supplies to Bangladesh will remain affected beyond September. Other European buyers have similarly received notices regarding delayed or cancelled deliveries. QatarEnergy initially declared force majeure in March, renewing it on a monthly basis as the operational impediments in the Strait of Hormuz have proven more persistent than initially anticipated by market participants.
Anne-Sophie Corbeau, a global research scholar at Columbia University’s Center on Global Energy Policy, noted the ongoing uncertainty. “Absent any political resolution or one of the main stakeholders blinking first, we are still likely to be there for quite some time,” she stated, attributing QatarEnergy’s month-by-month extensions to the absence of a reliable timeline for resuming normal export operations.
The prolonged disruption has substantially reduced Qatari LNG exports. Data from ICIS reveals that Qatar exported only 18 cargoes in the first six months of the conflict, a stark contrast to the 509 cargoes shipped during the same period a year prior. This reduction is estimated to have resulted in approximately $24 billion (20.7 billion) in lost gas sales for Qatar.
While other exporters, including the United States, Canada, Nigeria, and Malaysia, have increased their output to partially fill the supply gap, these replacement volumes have not fully compensated for the shortfall. Consequently, some Asian markets have resorted to reducing consumption or switching to alternative fuels, while European nations have drawn more heavily on stored gas reserves rather than aggressively bidding for expensive spot market cargoes. Corbeau highlighted that “available cargoes are going to the buyers bidding for them,” noting continued activity from some Southeast Asian buyers despite elevated LNG prices.
The impact of this supply constraint is not uniform across importing regions. European Union LNG imports saw a decline compared to the previous year between April and August, while Chinese imports also decreased, albeit with month-to-month variations. Countries heavily reliant on Qatari or Emirati LNG without sufficient secured replacement cargoes, particularly those dependent on short-term purchases, are considered most at risk. Pakistan, Bangladesh, and India are identified as particularly vulnerable, whereas Japan, with its diversified long-term contracts, is perceived as better protected.
The reopening of the Strait of Hormuz, which previously handled about one-fifth of global LNG trade, is considered crucial. While some oil tankers continue to navigate the waterway, LNG carriers, being more specialized, face greater challenges. QatarEnergy has indicated that it expects to restore output from its 12 undamaged LNG production units within approximately two months once the strait is deemed secure. However, repairs to two other units damaged in attacks on Ras Laffan are projected to take between three and five years.
Limited LNG movements had briefly resumed following a memorandum between the US and Iran in June, but renewed attacks subsequently re-escalated shipping risks. This brief resumption demonstrated Qatar’s ability to quickly restart operations from undamaged facilities, provided passage through Hormuz is safe and consistent. The paramount importance, as Corbeau emphasized, is ensuring the strait’s secure and reliable operation, a challenge that has proven difficult to overcome.
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