QatarEnergy Declares Force Majeure After Attacks, Halting LNG Production
Takeaway
The 52% surge in European gas prices highlights the immediate market vulnerability to geopolitical risks in key LNG-producing regions. Energy traders should closely monitor spot prices and freight rates, particularly the spread between Atlantic and Pacific basins. Companies with diversified LNG supply portfolios will be better positioned to weather the disruption, while those heavily reliant on Qatari LNG may need to explore alternative sources or face potential supply shortages.
QatarEnergy, the state-owned energy giant, declared force majeure on Wednesday, March 4, 2026, after halting liquefied natural gas (LNG) production at its facilities. The declaration, triggered by military attacks on its facilities, specifically impacts affected buyers of Qatari LNG. The company ceased production of LNG and associated products at its Ras Laffan Industrial City and Mesaieed Industrial City facilities following attacks that began last weekend. Qatar's Defense Ministry reported detecting the launch of three cruise missiles, 101 ballistic missiles, and 39 suicide drones toward its airspace since the US and Israeli attacks on Iran began.
The declaration of force majeure allows QatarEnergy to suspend contractual obligations without facing penalties for failing to meet delivery commitments. Qatar accounts for approximately 20% of global LNG exports, making any disruption to its production a significant concern for global energy markets. The Strait of Hormuz, a critical transit point for nearly all Qatari LNG exports, has seen traffic significantly reduced. The company has communicated with clients in Asia and Europe but has not specified the duration of the shutdown.
QatarEnergy's Ras Laffan export terminal has a production capacity of 77 million tonnes per year. The facility is expected to remain shut down for at least two weeks, with an additional two weeks required to reach full capacity after the restart decision is made. Ras Laffan has a storage capacity of roughly 760,000 cubic meters, which, at full production, can be filled in approximately 1.6 days. The company also closed production valves for downstream products, including urea, polymers, methanol, and aluminum.
The disruption has already impacted global energy markets, with European gas prices rising by 52% following the attacks on Ras Laffan. This surge marks the largest price jump since Russia's invasion of Ukraine in 2022. India, which relies on Qatar for nearly half of its LNG imports, faces significant disruption. In January 2026, India imported 2.58 million tonnes of LNG, with 1.06 million tonnes coming from Qatar, representing 40.9% of total imports. In February 2026, India imported 1.86 million tonnes, with Qatar supplying 0.76 million tonnes, or 41.2%.
Industry analysts are closely monitoring the situation in the Strait of Hormuz, as its closure poses a major risk to global oil, gas, and LNG markets. The shutdown has intensified competition between the Atlantic and Pacific basins for LNG cargoes, driving gas prices and freight rates to multi-year highs. Market participants should watch for updates from QatarEnergy regarding the timeline for resuming production and the potential impact on long-term supply contracts. The next few weeks will be critical in determining the extent of the disruption and its lasting effects on global energy security.