Qatar Minister Warns Middle East War Could Collapse Global Economies
Qatar's energy minister has issued a stark warning that the ongoing war in the Middle East could "bring down the economies of the world" as oil prices could surge to $150 per barrel if Gulf energy exporters shut down production. Saad al-Kaabi emphasized that the conflict's impact on energy markets would trigger a devastating chain reaction across global supply chains.
Energy Production Shutdowns and Price Surges
Al-Kaabi revealed that restarting production at the world's largest liquified natural gas (LNG) plant, which has been shut down due to the war, would take "weeks to months." He warned that similar challenges could spread across the Middle East, creating a perfect storm for global energy markets.
The minister explained that global competition for a shrinking number of gas producers would inevitably trigger price surges. Further disruption from the conflict involving America, Israel, and Iran could severely impact oil production and exports, exacerbating the crisis.
Force Majeure Declarations Expected
"Everybody that has not called for force majeure we expect will do so in the next few days," al-Kaabi stated. "All exporters in the Gulf region will have to call force majeure. If they don't, they are at some point going to pay the liability for that legally, and that's their choice."
He emphasized that the war would damage economic growth and set off a chain reaction in the global supply of key products. "If this war continues for a few weeks, GDP growth around the world will be impacted. Everybody's energy price is going to go higher. There will be shortages of some products and there will be a chain reaction of factories that cannot supply."
Energy Markets in Turmoil
The warnings appear to be a direct plea for President Trump to bring the war to a swift end, amid fears that a settlement with Iran may not be reached for weeks. Energy markets have already been thrown into chaos, with LNG prices in Europe jumping by more than 50 percent since last week.
The Brent Crude Oil spot price rose higher on Friday to over $82 per barrel. Energy company executives and government officials are scrambling to mitigate the effects of an energy price shock that could trigger another cost of living crisis.
Industry Response and Market Impact
Speaking to Times Radio, Octopus Energy founder Greg Jackson confirmed that markets were "in turmoil." The supplier has increased fixed-price tariffs and introduced exit fees, while analysts report that more than half of suppliers across the market have reduced the number of fixed deals offered to British consumers.
Jackson explained: "Fixed tariffs are based on the fact the day you want to take out a fixed tariff, the energy company goes to the wholesale market and buys a year's worth of energy for you, and because the wholesale market are now reflecting at least some of the cost increases from the effects of the war in the Middle East, new fixed tariffs are then higher. Some companies won't offer them at all because they are not confident in being able to lock in those prices a year in advance."
He added: "In energy terms, Iran has effectively closed the Strait of Hormuz, which transports 20 percent of the world's oil and gas supplies, and Qatar has said it cannot honour its contracts to deliver its gas, so the energy markets are in a state of turmoil. The wholesale price of gas has roughly doubled since a week ago."
