Qatar Turns to US for LNG as Iran Conflict Disrupts Global Gas Supplies

The ongoing conflict between the US and Iran has led to Qatar declaring force majeure on its liquefied natural gas shipments, citing the closure of the Strait of Hormuz. To maintain deliveries to key Asian customers, Qatar Energy has purchased 33 U.S. LNG cargoes worth around $1 billion this year.

These imports are significantly higher than last year's total of four cargoes and account for about a third of a month's typical exports shipped from Qatar under normal circumstances. The majority of Qatar's LNG shipments, approximately 80%, are exported to Asia.

Qatar Energy may be ready to resume deliveries through the Strait of Hormuz, but recent attacks by Iran and the US have compromised this ability. If Qatar can move its gas through the strait, it plans to ramp up production at the world's largest LNG plant in Ras Laffan Industrial City.

Europe is struggling with low natural gas storage levels, currently sitting at 54% full. This is the second-lowest level for this point in 15 years and below the five-year average. European utilities are having to bid against higher-priced demand for supplies as Asian buyers increasingly purchase spot cargoes.