Why Qatar is extending its LNG force majeure
What's the story
QatarEnergy is likely to extend the force majeure on liquefied natural gas (LNG) shipments until mid-October, people with knowledge of the matter told Reuters. The decision would prolong a supply disruption that has already shaken the global gas market amid ongoing Middle East conflict. Force majeure is a legal term used when unforeseen circumstances prevent a company from meeting its contractual obligations.
Market reaction
Buyers awaiting formal notification
Several buyers in Europe and Asia have said they are expecting a formal notification from QatarEnergy in the coming weeks.
The company had previously informed some customers in Asia and Europe about cancellations through August and September.
If the force majeure is extended again, it could further tighten the global market as Europe and Asia compete for limited LNG supplies amid rising demand due to heat and winter stockpiling.
Trade disruption
Impact of Middle East conflict on global gas market
Before the Middle East conflict, nearly 20% of the world's LNG trade passed through the Strait of Hormuz.
Qatar's decision comes as hostilities in the region have intensified, dimming hopes for a quick recovery in supplies.
This week, both US and Iran downplayed prospects for immediate peace talks, further impacting European and Asian gas prices.