Qatar extends LNG force majeure into fall amid Hormuz closure

QatarEnergy has extended force majeure notices on liquefied natural gas supplies to European and Asian buyers by another month, with shipment cancellations now stretching into the fall as the Strait of Hormuz remains virtually closed to commercial traffic, Bloomberg reported Friday.bloomberg

The state-owned company notified Pakistani buyers this week that LNG cargo cancellations will continue into October, according to traders familiar with the matter. Force majeure on supplies to Bangladesh has also been pushed beyond the end of September. Italian energy company Edison, one of QatarEnergy's long-term customers, reported that its cancellations had been extended into early November, while additional European traders have begun receiving similar notices.turkiyetoday+1

A Waterway in Crisis

The extensions come as shipping through the Strait of Hormuz remains severely depressed. Only 10 vessels crossed the waterway on Wednesday, according to Kpler data cited by Reuters, a fraction of the roughly 130 to 140 ships that would transit daily before the conflict. Between mid-July and late August, an average of about five vessels a day passed through the strait, marking an almost 95 percent decrease from pre-war levels, Al Jazeera reported.reuters+2

QatarEnergy first halted LNG production and associated products on March 2 after Iranian drone strikes hit energy facilities at Qatar's Ras Laffan industrial hub. The company formally declared force majeure two days later. QatarEnergy later disclosed that continued attacks removed 12.8 million metric tons per year of LNG capacity, equivalent to about 17 percent of the country's exports, with repairs expected to take three to five years.osw+1

Global Toll

In the six months since the disruption began, Qatar has shipped only 18 LNG cargoes compared with 509 during the same period a year earlier — a 96 percent collapse in exports that has cost the country roughly $24 billion in lost revenue, according to Reuters. About 93 percent of Qatar's LNG exports pass through the Strait of Hormuz, leaving the world's second-largest LNG exporter with no viable alternative route from its existing facilities.turkiyetoday

The prolonged disruption continues to pressure European gas markets. Front-month natural gas futures at the Dutch TTF hub rose nearly 2 percent on Friday, while stronger cooling demand during a summer heat wave has slowed the pace at which European countries replenish gas inventories ahead of winter.turkiyetoday