Qatar's LNG exports nearly halted as 29 cargoes canceled, dealing a blow to Europe

On August 28, Italian energy company Edison announced that QatarEnergy has once again extended the LNG force majeure period, and 5 additional cargoes of liquefied natural gas originally scheduled for delivery from late September to early November have been canceled.

Since the force majeure was activated in April this year, Edison has suffered a total of 29 canceled LNG cargoes, corresponding to approximately 3.8 billion cubic meters of natural gas. The Qatar LNG supply disruption has lasted nearly six months, and there is no clear timeline for recovery.

Long-term supply contracts hit, actively seeking alternative gas sources

Edison signed a 25-year long-term gas supply contract with QatarEnergy in 2009, with an annual supply of 6.4 billion cubic meters of natural gas, accounting for about 10% of Italy's total natural gas demand.

As of August 28, the company has secured 21 alternative LNG cargoes totaling approximately 2 billion cubic meters of natural gas through its Adriatic Sea LNG receiving terminal, offsetting part of the supply gap.

Qatar's LNG exports shrink sharply, and damaged hardware facilities require a long repair cycle

According to shipping data agency ICIS, after the outbreak of the US-Iran conflict, Qatar only completed 18 LNG export cargoes, compared with 509 in the same period last year, with export volume plummeting by 96% year-on-year. The loss of natural gas sales revenue is approximately 24 billion US dollars, equivalent to five months of the country's fiscal revenue.

Unlike crude oil, which can be transported via onshore pipelines to bypass the Strait of Hormuz, all Qatar's LNG exports rely on dedicated tankers passing through the strait, with no alternative transportation routes. Coupled with damage to the Ras Laffan facilities, the world's largest LNG export base, Qatar's export capacity has dropped by 17%, and the longest equipment repair time may take five years. Before the conflict, Qatar supplied about one-fifth of the world's LNG resources.

EU natural gas inventories at historical lows, TTF gas prices rise sharply

Data from the European Gas Infrastructure Association GIE shows that by the end of August, the EU's natural gas inventory filling rate was 63.28%, 17.24 percentage points lower than the five-year average, hitting the lowest level since the same period in 2013; the total gas storage volume was 69.2 billion cubic meters, a decrease of 14.3 billion cubic meters compared to the same period last year, highlighting the pressure for winter energy supply security.

On September 1, the European TTF natural gas benchmark price rose to 71.70 euros per megawatt-hour, hitting a new high since the outbreak of the US-Iran conflict, with a cumulative increase of about 40% since mid-August. Commodity analysts at Commerzbank pointed out that the disruption of Qatar's LNG supply and the blockage of shipping through the Strait of Hormuz are the core drivers of this round of gas price hikes.

Costs传导 along the chemical industry chain, weighing on European industrial competitiveness

Natural gas is not only the fuel and heat source for chemical plants, but also the core raw material for basic chemical products such as ammonia, methanol and hydrogen. The sharp rise in gas prices directly raises the fuel and raw material costs of European chemical enterprises, transmitting upward to fertilizers and methanol, and further affecting downstream products such as MDI, TDI, vitamins and methionine.

The high energy costs continue to weaken the competitive advantages of European chemical enterprises. The industry is currently maintaining a low overall operating rate, and capacity adjustments are ongoing. The further tightening of Qatar's LNG supply will further widen the gap in production costs between Europe and other regions of the world. Market views predict that the high gas price situation may last throughout 2026, and European industries may face long-term impacts, even triggering a new round of deindustrialization risks.