Several major energy traders have begun declaring force majeure to their own customers after Qatar’s LNG shutdown rippled through global gas markets, according to Reuters sources on Wednesday.
Companies including Shell and TotalEnergies–both major portfolio players that lift liquefied natural gas from QatarEnergy–have notified downstream buyers that contractual deliveries may be disrupted following Qatar’s suspension of LNG production.
The move marks the first clear sign that Qatar’s export stoppage is cascading through the global LNG trading system.
QatarEnergy halted production at its giant LNG complex earlier this month and declared force majeure on shipments after drone strikes hit facilities at Ras Laffan Industrial City and Mesaieed Industrial City. The country operates roughly 77 million tons per year of liquefaction capacity and is the world’s second-largest LNG exporter.
Shell and TotalEnergies are among the largest marketers of Qatari LNG worldwide. Analysts estimate Shell lifts about 6.8 million tons per annum of LNG from Qatar while TotalEnergies takes roughly 5.2 million tons per year, reselling the cargoes to utilities and industrial buyers across Europe and Asia.
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Neither company publicly confirmed the force majeure declarations. Shell declined to comment, while TotalEnergies did not immediately respond to requests for comment.
Qatar’s shutdown has already halted LNG exports for days at a time. According to Kpler vessel-tracking data cited by Bloomberg, the country recorded five consecutive days without any LNG shipments — the longest interruption since 2008.
The disruption has removed a major portion of global LNG supply from the market. No LNG carrier has transited the Strait of Hormuz since February 28, affecting cargoes from Qatar as well as shipments normally leaving the United Arab Emirates.
With Qatar accounting for roughly 20% of global LNG exports, the halt has pushed Asian and European gas markets higher as buyers scramble for alternative supply.
Some cargoes originally headed to Europe have already been diverted toward higher-priced Asian markets, tightening availability for European utilities.
Qatar’s energy minister Saad al-Kaabi told the Financial Times that restoring normal LNG deliveries could take “weeks to months,” even if the conflict in the region were to end immediately.
Sources told Reuters that LNG deliveries scheduled for March are largely expected to proceed as planned, with the main impact of the shutdown likely to begin affecting contractual supply from April onward.
By Michael Kern for Oilprice.com
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