QatarEnergy Declares Force Majeure on LNG Contracts Amid US-Israeli War Disruptions

QatarEnergy has declared force majeure on long-term liquefied natural gas (LNG) supply contracts amid escalating disruptions caused by the United States-Israeli war on Iran.

“QatarEnergy has declared force majeure on some of its long-term liquefied natural gas (LNG) supply contracts, including for customers in Italy, Belgium, South Korea and China”

Al Jazeera

The state-owned energy company made this declaration on Tuesday, affecting major global markets including customers in Italy, Belgium, South Korea and China.

Al Jazeera

This move indicates that supply disruptions have become severe enough to prevent contractual obligations from being fulfilled.

Petroleum companies in Kuwait and Bahrain have also recently invoked force majeure clauses, indicating the widening regional impact on energy supplies.

The force majeure declaration follows devastating Iranian airstrikes on March 18-19 that severely damaged Qatar's Ras Laffan Industrial City LNG production hub.

These attacks destroyed approximately 17% of Qatar's total LNG export capacity.

CNBC TV18

The strikes specifically targeted two major LNG production trains (Trains 4 and 6) with a combined capacity of 12.8 million tons per annum.

The attacks also hit the Pearl GTL facility operated by Shell.

QatarEnergy estimates these damages will result in approximately $20 billion in annual lost revenue.

Repairs are expected to take between three to five years.

CEO Saad al-Kaabi emphasized that hostilities must cease before any production can resume.

The force majeure declaration has particularly significant implications for South Korea.

“arrow-down comments printer search bell top-nav right-arrow left-arrow arrow-down”

NDTV Profit

South Korea imports 9-10 million tons of LNG annually from Qatar.

6.1 million tons under long-term contracts with Qatar are now affected.

While Korea Gas Corporation states its reliance on Qatar is below 20% through supply chain diversification, the disruption of contractual volumes for up to five years could impact both industrial operations and household gas prices.

The declaration also affects major markets in China, Italy, and Belgium.

QatarEnergy had previously warned that force majeure could apply for up to five years on these long-term supply contracts.

Beyond LNG exports, the attacks have triggered cascading effects across multiple energy sectors.

Significant reductions in by-product exports include condensate (down 24%), LPG (down 13%), and helium (down 14%).

Al Jazeera

These declines are raising serious concerns about supply instability across global petrochemical and high-tech industries.

Reuters noted that the reductions will affect 'a wide range of sectors, from LPG used in Indian restaurants to South Korean semiconductor companies that rely on helium.'

The broader energy disruption underscores the vulnerability of global supply chains to regional conflicts.

This highlights the interconnected nature of energy markets worldwide.

QatarEnergy's force majeure declaration represents a significant escalation in the economic consequences of the ongoing US-Israeli war on Iran.

“QatarEnergy has declared force majeure on some of its long-term liquefied natural gas (LNG) supply contracts, including for customers in Italy, Belgium, South Korea and China”

Al Jazeera

The company's CEO had previously warned US and industry officials against attacking energy infrastructure.

CNBC TV18

The legal framework of force majeure allows parties to be excused from contractual obligations due to unforeseeable events such as war or natural disasters.

QatarEnergy's decision to invoke this clause for up to five years underscores the severity and duration of the supply disruptions.

This development affects immediate energy markets and signals potential long-term restructuring of global energy supply chains.

Countries and companies are reassessing their vulnerability to regional conflicts in critical energy-producing regions.