Qatar has warned that the US–Israeli war on Iran could “bring down” the world’s economies.
The Qatari energy minister said the Israeli-US attacks in the region and Iran’s retaliation could shut down all Gulf energy exporters within days and drive oil to $150 a barrel.
“This will bring down the economies of the world,” Saad al-Kaabi told the Financial Times.
“If this war continues for a few weeks, GDP growth around the world will be impacted. 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.”
Iranian strikes have already prompted Saudi Arabia and Qatar to halt production at major oil and gas facilities.
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Two Iranian drones struck energy facilities in the Qatari industrial city of Ras Laffan and Mesaieed earlier this week, according to Qatar’s defence ministry, which later said it shot down two SU24 fighter jets coming from Iran.
No casualties were reported from the drone strikes, but Qatar Energy, the largest liquified natural gas (LNG) producer in the world, announced that it had stopped production of LNG and associated products.
“Everybody that has not called for force majeure we expect will do so in the next few days that this continues. All exporters in the Gulf region will have to call force majeure,” Kaabi said, referring to the contractual clause that excuses parties from fulfilling obligations due to unforeseeable, uncontrollable events.
“If they don’t, they are at some point going to pay the liability for that legally, and that’s their choice.”
Rising oil prices
Brent crude rose 2.5 percent to $87.6 a barrel on Friday morning in Europe, the highest level since the beginning of the war last Saturday.
Kaabi predicted crude prices could soar to $150 a barrel in two to three weeks if tankers and other merchant vessels were prevented from passing through the Strait of Hormuz by Iran.
A fifth of the world’s oil and gas passes through the strait.
The minister also suggested gas prices would rise to $40 per million British thermal units, almost four times the level they were before the war began.
“In addition to energy, there will be a halt on all other trade between the [Gulf] and the world, which will have a significant effect on the economies of the [Gulf] and all the trading partners around the world,” he added.