Global oil prices surge as Qatar warns Gulf energy production could be halted
Global oil prices surged after Qatar warned that all oil and gas production in the Gulf region could be halted in a matter of days if the conflict in the Middle East continues. The rise in global oil prices comes amid mounting tensions in the region that threaten global energy supply.
Qatar’s Energy Minister Saad al-Kaabi said the conflict involving the United States, Israel, and Iran could potentially stop energy production in the Gulf, which has long been a vital supply corridor for the global oil market.
In an interview with the Financial Times, he warned that the impact of the conflict could be wide-ranging on the global economy. “If this war lasts for a few weeks, global GDP growth will be affected,” Kaabi told BBC.
“Energy prices will rise for everyone. There will be shortages of some products and a ripple effect from factories unable to supply,” he added.
That concern immediately triggered a jump in world crude prices. Brent crude rose to $89.17 per barrel on Friday, around Rp1.5 million per barrel, or a 4.4% increase from Thursday’s close.
Kaabi also warned that oil prices could jump much higher if the main shipping route through the Strait of Hormuz cannot be traversed by energy tankers. “If ships cannot pass the Strait of Hormuz, in two to three weeks oil prices could surge to $150 per barrel,” he said.
The Strait of Hormuz is a strategic shipping lane for global energy trade. Around one-fifth of global oil supply normally passes through the strait each day. However, since the outbreak of fighting between the United States and Israel against Iran at the weekend, vessel traffic in the area has almost completely halted.
The impact of higher energy prices is already being felt in several countries. For example, UK consumers have started facing higher fuel costs, while gas prices have also risen. Nevertheless, the rise in oil and gas prices remains below the peaks reached in 2022 after Russia’s invasion of Ukraine.
Qatar itself is one of the world’s major producers of oil and natural gas, including LNG. The state-owned energy company QatarEnergy this week said it had halted LNG production after what it described as a military attack on its facilities.
Kaabi said that even if the war ends now, the process of restoring normal production would not be swift. “Even if the war stops now, it will take weeks to months to return to normal production,” he said.
QatarEnergy has also activated the force majeure clause, freeing the company from supply obligations in circumstances beyond its control. Kaabi predicted that other Gulf energy producers could take similar steps in the coming days if the conflict continues.
Separately, energy production disruptions were reported in Iraq. The Kurdistan regional authorities said production at an oil field operated by U.S.-based HKN Energy in Dohuk province was halted following an attack. In a statement posted on X, the Kurdistan regional government said the facility had been attacked by an armed group, causing material damage to the field and halting production at the site. Security sources cited by AFP said the attack involved two drones on Thursday.