Iran war: Oil price could hit $150/barrel in three weeks, Qatar’s energy minister warns

Saad Al-kaabi, Qatar’s energy minister, says oil price couldrise to $150 per barrel in ‘two to three weeks’ if tankers remain unable topass through the Strait of Hormuz. Al-kaabi made the forecast on Friday in an interview withthe Financial Times. On March 2, major container shipping lines suspendedsailings through the Strait of Hormuz and the Suez Canal over escalatingsecurity risks in the Middle East after US and Israeli strikes on Iran. Hormuz — a narrow maritime passage connecting the PersianGulf to the Gulf of Oman and the Arabian Sea — is said to be the only sea routelinking the Gulf’s oil and gas producers to global markets, making it one ofthe most strategically important waterways in the world. Speaking to Financial Times, Al-kaabi said energy marketscould face severe disruptions if maritime traffic through the Strait of Hormuzremains blocked. He projected that crude prices “could reach $150 a barrelwithin two to three weeks if tankers and other vessels remain unable to passthrough the strategic waterway”. Al-Kaabi also cautioned that natural gas prices could climbto $40 per metric million British thermal units (MMBtu) if supply disruptionscontinue — almost four times higher than the levels recorded before the war. He said if the conflict persists, energy producers acrossthe Gulf region may be compelled to declare force majeure, potentially leadingto the suspension of energy deliveries. “Everybody that has not called for force majeure we expectwill do so in the next few days that this continues. All exporters in the Gulfregion will have to call force majeure,” Al-kaabi said. “If they don’t, they are at some point going to pay theliability for that legally, and that’s their choice.” On March 2, QatarEnergy, the state-owned energy company ofQatar, said it had halted the production of liquefied natural gas (LNG) due toIranian military attacks on its operating facilities. Al-kaabi, addressing the shutdown, said the government andQatarEnergy are still assessing the extent of the damage to the facility. “We don’t yet know the extent of the damage, as it iscurrently still being assessed. It is not clear yet how long it will take torepair,” he said. Even if hostilities stopped immediately, the minister saidit would take “weeks to months” for Qatar to restore normal export operationsbecause of logistical disruptions. Saudi Aramco, the state-owned oil company of Saudi Arabia,had also shut down its Ras Tanura oil refinery following a fire sparked bydebris from an Iranian drone attack at the facility. Global supply disruptions have led to a surge in petrol pumpprices in Nigeria. On March 5, the Nigerian National Petroleum Company (NNPC)Limited increased petrol price at its retail outlets to N933 per litre in Lagosand N960 per litre in Abuja. The hike came after the Dangote Petroleum Refinery increasedits ex-gantry petrol price to N874 per litre, from N774 per litre.

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