Middle East Conflict Sparks Global Energy Crisis Fears
Qatar's energy minister, Saad al-Kaabi, has warned that war in the Middle East could have far-reaching economic consequences. He predicts that all Gulf energy exporters will shut down production within days due to the ongoing conflict.
The Strait of Hormuz, a key maritime trade route through which a fifth of the world's oil and gas passes, is currently blocked by the US and Israeli war with Iran. This has led to a significant slowdown in traffic, with at least 10 ships being hit and insurance premiums soaring.
Al-Kaabi stated that even if the war ends immediately, it will take Qatar 'weeks to months' to restore deliveries after an Iranian drone strike on its Ras Laffan plant. The country's production capacity at its North Field gasfield is expected to be delayed due to the conflict.
The energy minister also forecasted a sharp increase in oil prices, predicting that crude could reach $150 a barrel within two to three weeks if tankers and other merchant vessels are unable to pass through the Strait of Hormuz. Gas prices are expected to rise to $40 per million British thermal units (€117 per MWh), almost four times the pre-war level.
The impact of the disruption will not be limited to energy markets, as the region produces much of the world's petrochemicals and fertiliser feedstocks. Al-Kaabi warned that this could lead to shortages and a chain reaction of factory closures worldwide.