No casualties were reported, but production remains offline while damage assessments continue. On March 3, QatarEnergy extended the halt to include downstream production of polymers, methanol, aluminum, and other products.
The force majeure notice — which relieves QatarEnergy of contractual delivery obligations under extraordinary circumstances — has been issued to buyers with cargoes already loaded at Ras Laffan that cannot transit the Strait of Hormuz, as well as to buyers whose upcoming deliveries are now uncertain. Some long-term contract buyers scheduled to receive cargoes in the coming months have not yet received notices, according to reporting from Argus Media.
Qatar accounts for roughly 20% of global LNG exports, making the shutdown one of the most significant single-point supply disruptions in the modern LNG market.
As of March 3, approximately 1.056 million metric tons of LNG — loaded on 13 vessels — was stranded in the Persian Gulf west of the Strait of Hormuz, according to ship-tracking data from Kpler. Three additional empty LNG carriers were standing by awaiting a possible restart of production.
The disruption is unfolding alongside escalating maritime tensions. Iran's Islamic Revolutionary Guard Corps has declared the Strait of Hormuz closed to transit, with roughly 150 vessels reported at anchor in the surrounding waters. The strait remains the only viable export route for Qatari LNG shipments.
Qatar's LNG has only one viable export route: the Strait of Hormuz. Unlike Saudi Arabia, which can route crude through its east-west pipeline to Red Sea terminals, Qatar has no alternative export path. According to S&P Global, Qatar accounts for 93% of all LNG traffic through the strait.
Industry analysts now estimate a minimum four-week disruption even under an optimistic scenario. Ras Laffan is expected to require at least two weeks to restart once cleared, followed by an additional two weeks to return to full production capacity. As of March 5, no restart timeline has been issued, the conflict continues, and the insurance market has effectively closed the strait to commercial vessels.
Energy markets reacted immediately to the production halt.
European benchmark gas prices at the Dutch TTF hub surged nearly 50% in intraday trading, while the S&P Global Japan Korea Marker (JKM) — the key Asian LNG benchmark — rose approximately 39%. Oil markets also moved sharply higher, with crude climbing as much as 13% intraday to above $82 per barrel, the highest level since January 2025.
By March 4, assessed LNG delivery prices to India for first-half April had climbed to $23.3–$23.5 per MMBtu, an increase of roughly $7.80–$7.90 from the previous session, according to Argus. Rystad Energy estimates that global natural gas prices have risen more than 40% in aggregate since the shutdown began.
For large industrial fuel buyers and utilities, the spike highlights how quickly geopolitical disruptions can translate into fuel cost exposure in globally traded LNG markets.
Approximately 82% of QatarEnergy's long-term contract buyers are located in Asia, meaning the direct supply impact will be felt most strongly across that region.
India is among the most exposed. Petronet LNG — which holds a long-term supply contract for 7.5 million metric tons per year from Ras Laffan — confirmed it had received a force majeure notice from QatarEnergy. Petronet has subsequently issued force majeure notices to several downstream customers, including GAIL (India), Indian Oil Corporation, and Bharat Petroleum, citing the inability of LNG vessels to safely transit the Strait of Hormuz.
In 2025, LNG accounted for 80% of gas demand from India's fertilizer industry and 36% of city gas consumption, according to India's oil ministry. Reports indicate India has directed industry to cut gas consumption by 10 to 20 percent.
Europe is less exposed to direct supply losses because most Qatari LNG flows to Asian markets. However, sustained price increases could still raise fuel costs for European utilities and energy-intensive industrial operators, particularly as gas storage levels remain a concern heading into spring.
Near-term replacement supply remains extremely limited. The U.S. is running at or near full LNG export capacity and cannot ramp output beyond current levels. What U.S. producers can do is reroute existing cargoes toward higher-paying buyers, which is already occurring.
Two U.S. projects are currently entering the market during commissioning phases:
Cheniere Energy's Corpus Christi Stage 3 expansion, adding 11.45 million metric tons per year of capacity
The Golden Pass LNG terminal, a QatarEnergy-ExxonMobil project in Texas rated at 18.1 million metric tons per year
However, both facilities are still ramping up operations and cannot immediately offset the scale of lost output from Ras Laffan.
On March 3, President Trump announced that the United States would offer political risk insurance and naval convoy escorts for commercial vessels transiting the Mideast Gulf. As of March 5, commercial P&I insurance has nonetheless been withdrawn, and no convoy operations have commenced.
The single most consequential near-term variable for energy markets is the pace of diplomatic progress. A New York Times report on March 4 that Iranian operatives reached out to discuss ceasefire terms caused TTF to fall 12% within hours — illustrating how sensitive prices are to resolution signals. That move was largely reversed after Iran's Ali Larijani publicly denied any intent to negotiate with the United States.
The conflict entered its fifth consecutive day on March 4 with no ceasefire. For companies managing natural gas exposure, the diplomatic track should be watched as closely as any supply-side indicator.
The duration of the disruption will likely depend on two factors: how quickly QatarEnergy can complete damage assessments and restart production, and how the wider regional conflict evolves.
For companies with natural gas exposure — either directly or through supplier contracts — the current price surge offers a real-time stress test of fuel procurement strategies, contract flexibility, and supply diversification across global LNG markets.
