The ongoing war in the Middle East has the potential to “bring down economies of the world” with all the Gulf energy producers expected to “shut down exports within weeks”, propelling oil to $150 a barrel, Qatar's Energy Minister Saad al-Kaabi has said in an interview.
The minister, while speaking to the Financial Times, said his country halted the production of liquefied natural gas on Monday, as airstrikes on Tehran and counterstrikes in many parts of the Middle East continued. Qatar called for a force majeure.
“Everybody who has not called for force majeure, we expect will do so in the next few days if this continues,” FT quoted him as saying on Friday. “All exporters in the Gulf region will have to call force majeure.”
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Kaabi warned that the GDP growth, around the world, will be impacted if the war continues, "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."
The minister further warned that even if the war were to come to an end immediately, it would take his country “weeks to months” to return to a normal cycleof deliveries.
“This will bring down economies of the world,” he said, adding that disruptions in energy shipments could also affect multiple industries, given the fact that Gulf producers supply large volumes of petrochemicals and fertiliser feedstocks in manufacturing.
Kaabi is also the CEO of QatarEnergy, one of the biggest producers of liquefied natural gas globally. He told the FT that the company's North Field expansion project would delay first production. "It will delay all our expansion plans for sure," Kaabi said. "If we come back in a week, perhaps the effect is minimal; if it's a month or two, it is different," he said.
Kaabi added caution that the continuous closure of the Strait of Hormuz will push crude oil prices to $150 a barrel. He also expects gas prices to rise to $40 million British thermal units.
Iranian authorities have closed the Strait of Hormuz since the beginning of the war. The vital maritime chokepoint iscrucial for the transportation of one-fifth of the world's crude oil. A closure of the Strait will mean oil prices will keep spiralling, with the effect already been seen in the global markets over the past few days.
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