Qatar's LNG exports are down 96%. Reason? US-Iran war
What's the story
The ongoing US-Iran conflict has taken a heavy toll on Qatar's economy, one of the world's top liquefied natural gas (LNG) exporters. The war has caused damage to its gas infrastructure and disrupted shipping through the Strait of Hormuz, severely affecting Qatar's main source of export revenue (down by 96%). According to Reuters data, Qatar has lost nearly $24 billion in gas sales, about five months' worth of income for the country.
Decline
Budget cuts
The war has not only affected Qatar but also other Middle Eastern markets like Saudi Arabia, UAE, Iraq, and Kuwait. However, Qatar has been hit the hardest.
According to a Financial Times report, the country has cut its government department budgets by up to 30% and slashed overseas aid spending by around 85%.
During the six-month period of conflict, Qatar managed to ship just 18 cargoes compared with last year's 509 in the same timeframe.
Attack impact
Targeted attacks on Qatar's gas facilities
Qatar's LNG production was hit just days after the war began when an Iranian drone and missile attack targeted its Ras Laffan facility, the world's largest LNG export plant.
Another missile attack in March reduced Qatar's export capacity by 17%.
Repairs could take up to five years, further straining the country's public finances.
Economic forecast
IMF predicts contraction in Qatar's economy
The International Monetary Fund (IMF) has predicted that Qatar's economy will contract by 8.6% this year, the biggest decline among the six Gulf states.
The country has substantial financial buffers like the $500 billion Qatar Investment Authority (QIA) sovereign wealth fund and a relatively small domestic spending base.
Now, Doha is drawing on these reserves while its main revenue-generating sector remains constrained.