Qatar declared force majeure on gas exports on Wednesday amid the US-Israeli war on Iran, with sources saying it may take at least a month to return to normal production volumes.
The move means global gas markets will experience shortages for weeks even in the unlikely scenario the conflict ends today, as Qatar supplies 20 per cent of global liquefied natural gas.
State energy giant Qatar Energy (QE) stopped producing gas this week.
Qatar accounts for about 20 per cent of global LNG exports, all of which transit the Strait of Hormuz, where shipping has ground to a near-halt amid the US-Israeli war on Iran and Tehran’s retaliation.
Qatar supplies Europe and predominantly Asian markets, with over 80 per cent of its customers in China, Japan, India, South Korea, Pakistan and other countries in the region.
Force majeure is a clause that frees parties from liability if any failure to meet supply obligations is due to events beyond their control.
QE has started contacting some of its clients in Asia and Europe, but has not told them how long the shutdown might last, sources told Reuters.
The production halt has intensified competition between the Atlantic and Pacific basins for LNG cargoes, sending European and Asian gas prices and LNG freight rates to multi-year highs.