QatarEnergy Extends LNG Force Majeure as Hormuz Stays Shut to Gas Carriers

QatarEnergy has extended its force majeure on liquefied natural gas deliveries once again, pushing cargo cancellations into October for Asian buyers and into early November for European customers. State-owned traders confirmed on 28 August 2026 that Pakistani buyers had been notified of cancellations running through October, and that the force majeure covering Bangladesh had been pushed beyond September. In Europe, Italian utility Edison said the cancellations affecting its long-term contract now extend into early November. The decision keeps roughly one fifth of the world's normal liquefied natural gas trade off the market at the exact moment buyers in both regions are trying to refill storage before winter.

The volumes involved are large. Qatar has managed to export only 18 cargoes during the six-month period, against 509 cargoes over the same stretch of last year, according to shipping data cited by Reuters. That represents a fall of as much as 96 percent and around 24 billion dollars in lost sales for the world's second-largest liquefied natural gas exporter after the United States. Edison alone had 24 cargoes cancelled between April and late July, equivalent to roughly 3 billion cubic meters of gas, and the Italian group reported that its first-quarter operating profit was cut in half largely because of the shortfall.

One of the most striking features of the crisis is the gap between oil and gas. Crude flows through Hormuz have partly recovered, with Qatar and Kuwait restoring close to 70 percent of their pre-war export levels, while gas carrier traffic has stayed at a near standstill and no laden gas carrier has left the Gulf since mid-July. The reason is technical as much as political. Crude can be moved in stages. Gulf producers have been loading smaller shuttle tankers, moving them out of the risk zone and transferring the cargo to larger vessels waiting outside through ship-to-ship operations. Liquefied natural gas does not allow that workaround in any practical way. The cargo is kept as a liquid at about minus 162 degrees Celsius inside insulated tanks, and transferring it between two ships requires purpose-built cryogenic arms, matched vessel designs, calm sea conditions and a long alongside period. Very few locations and very few crews are equipped for it, and no such capability exists at scale in the Gulf of Oman.

The fleet itself is another constraint. The world has only a few hundred gas carriers, each purpose-built and worth on the order of 250 million dollars, all of them tracked and none of them easily replaced. There is no equivalent of the shadow tanker fleet that keeps sanctioned crude moving, because a gas carrier cannot discharge anywhere except at a regasification terminal that has agreed to receive it. Insurance closed the remaining door. War risk cover for the strait was withdrawn or repriced to prohibitive levels after the first attacks on shipping, and owners of vessels carrying a highly flammable cargo have been the least willing to accept the residual risk. A crude tanker that is hit usually stays afloat, and its cargo can often be salvaged. A loaded gas carrier hit in a narrow waterway is a far more serious scenario, and charterers, flag states and crews have all refused to take that chance. On top of that, every loading requires an empty carrier to sail into the Gulf first, which doubles the exposure.

The price effect has been immediate. Spot cargoes in Asia traded at 23.388 dollars per million British thermal units on 28 August 2026, close to four-year highs, as utilities in the region outbid European buyers for a shrinking pool of available cargoes. In Europe, the benchmark Dutch TTF contract rose above 69 euros per megawatt-hour, around 80 dollars, and delivered cargo prices reached their highest level since 2023. European storage sites were only about 63 percent full at the end of August, against a five-year average near 80 percent for this point in the season. The Netherlands has already said it will miss its winter filling target, and British households are facing energy bills at a three-year high.

The damage is not evenly spread.

Pakistan is the most exposed importer, because Qatar and the United Arab Emirates together supplied virtually all of its liquefied natural gas volumes. Islamabad has suspended gas supply to the fertiliser sector, cut regasification rates, closed schools and universities to save power, and asked Saudi Arabia to open an alternative fuel route through the Red Sea port of Yanbu.

Bangladesh is in an even worse position. Qatar and the UAE covered close to three quarters of its imports, and the country now runs a power deficit of roughly 1,500 megawatts, with rural areas facing eight to ten hours of daily outages while Dhaka keeps a near-full allocation. A fire at the Excelerate Energy floating terminal on 21 July 2026 destroyed one of two boilers and cut regasification capacity from about 1,000 to 501 million cubic feet per day, compounding the loss of Qatari cargoes. Dhaka has asked India for additional diesel through the Numaligarh to Parbatipur pipeline, at a fuel cost several times higher than gas-fired generation.

India sits in the middle of the range. Qatar and the UAE accounted for slightly more than half of its imports, and city gas distributors and industrial users have absorbed supply cuts of up to 40 percent since the start of the crisis. India has more contractual flexibility than its neighbours, with a mix of Henry Hub indexed deals and short-term agreements, but its import bill has risen sharply and 45 of its power plants are also running on critically low coal stocks.

Further east, China, Japan, South Korea and Taiwan are large Qatari customers with deeper pockets, and their willingness to pay spot premiums is precisely what is squeezing South Asian and European buyers out of the market.

In Europe, Italy and Belgium carry the heaviest exposure to Qatari long-term contracts, with Italy's dependence concentrated in a single utility.

A partial way out is under discussion. Iran and Oman announced on 25 August 2026 that they had agreed on a temporary shipping corridor about 11 kilometers wide through the strait, with inbound traffic routed through Iranian-controlled waters and outbound traffic through an Omani-controlled lane. Iranian officials have warned that the waterway will not fully reopen until Washington meets commitments made under the interim understanding signed in June, which has since lapsed, and the arrangement still awaits final political approval in Tehran. Even if the corridor opens, mine clearance in the strait is expected to take months, and marine insurers will need clear evidence of safe passage before restoring war risk cover at usable rates. Gas carrier owners are likely to be the last to move.

The practical horizon is now the winter. Replacement volumes are coming mainly from the United States Gulf Coast and the Atlantic basin, at longer voyage times and higher freight, and much of that output is already committed under existing contracts. Utilities are switching to coal and fuel oil where they can, drawing down storage, curtailing industrial demand and accelerating renewable projects that will not deliver in time for this heating season. Buyers with long-term contracts have discovered that a force majeure clause removes the supply and the price protection at the same time, which is pushing several importers to review destination flexibility and diversification clauses in their next round of negotiations with Doha.