China’s Diesel Exports Set to Plunge as Domestic Inventories Run Low

By Tsvetana Paraskova - Nov 05, 2026



China’s diesel exports are on track to drop in November from the highs seen in August and September as increased fuel shipments at the end of the summer dented domestic inventories, traders and executives with knowledge of this month’s export plans told Reuters on Thursday.

So far this month, Chinese refiners have sold about 500,000 metric tons of diesel for November loading, according to estimates by Reuters and trade sources. Refiners are yet to finalize deals for loading in the second half of November, but early estimates show the diesel shipments could end up at about 800,000 tons this month, down from 1.33 million ‌tons in August and 1.8 million tons in September.

China’s fuel export policies have varied from month to month since the Middle East crisis throttled supply of crude and fuels early this year. Authorities and refiners have prioritized domestic supplies; that’s why China restricted fuel exports between April and July.

Then China’s fuel exports recovered in August as refiners exported 6.01 million tons of petroleum products, up by 12.7% from a year earlier, after Beijing removed in mid-July restrictions on fuel exports that were in place at the peak of the Strait of Hormuz blockage.

The total volume of Chinese fuel exports exceeded pre-war levels in August, with jet fuel exports at an all-time high. Overseas shipments remained strong in September, too. But October saw another pullback in the first part of the month around the week-long Chinese holiday, before a restart of exports around October 9.

China last week expanded the quota for refined product exports, with available export quota for the fourth quarter at 20.44 million tons, up by 44% from a year earlier, China’s GL Consulting said this week.

“However, additional quota headroom does not guarantee an immediate increase in physical exports. Before the latest allocation, China’s November export plan was expected to decline month on month,” GL Consulting analysts said.

“With the new quota in place, an upward revision is possible, although the monthly plan remains under adjustment.”

By Tsvetana Paraskova for Oilprice.com

New Jersey Moves to Block Trump's Russian Diesel Imports

By ZeroHedge - Nov 04, 2026

• New Jersey Governor Mikie Sherrill has warned port operators against accepting Russian diesel shipments, citing potential civil and criminal penalties.
• 
  
• The Trump administration authorized Russian diesel imports to help ease fuel prices amid global refining disruptions and tight supplies.
• 
  
• Phillips 66 executive Brian Mandell believes Russian diesel shipments will be insufficient to significantly ease the global supply shortage.

New Jersey Democratic Governor Mikie Sherrill warned port and terminal operators in the state against "purchasing or unloading the illegal Russian fuel currently bound for the east coast of the United States." 

Sherrill's move threatens to complicate President Trump's efforts to bring Russian diesel into US markets to ease high industrial fuel prices amid a severe global refining squeeze fueled by Ukrainian drone attacks on Russian refineries and disruptions in the Strait of Hormuz.

In a Monday letter, Sherrill urged operators to turn away tankers carrying Russian diesel and said the state would use its legal and regulatory powers to prevent the shipments from entering through New Jersey.

Sherrill said, "Russia has since dispatched multiple diesel oil tankers to the United States, including at least one that may be headed for the New Jersey coast."

"The Russian Oil Act does not grant the President or Treasury Department blanket authority to waive these sanctions through licenses," the governor added.

She concluded, "Any effort to profit from the illegal trade in Russian fuel will be met with harsh penalties."

In early October, President Trump announced a deal with Russian President Putin to allow Russian diesel imports to flow into the US. AAA prices as of Tuesday morning show diesel prices at the pump averaging around $6.29 per gallon nationwide, down from $6.50 just weeks ago.

Brian Mandell, executive vice president of marketing and commercial at Phillips 66, recently told analysts on an earnings call, "We don't think Russia has enough distillate to make much of a difference, to be quite frank," adding, "That's a drop in the bucket compared to how much distillate is offline."

By Zerohedge

Fire Shuts Equinor’s Visund Platform in Norwegian North Sea

By Charles Kennedy - Nov 04, 2026



Equinor halted output at its Visund oil and gas platform in the Norwegian North Sea on Wednesday after a fire in an electrical switchboard room, taking all 13.2 million cubic meters per day of the field’s gas export capacity off the market from Thursday. 

The fire broke out shortly before 11 a.m. local time, NRK reported. Equinor spokesperson Ellen Maria Skjelsbæk told the broadcaster that crews first reported smoke and then found flames in the switchboard room, which houses the panels that control and distribute power on the platform. 

The flames are out, no one was injured, and Equinor has reported the incident to authorities.

Equinor moved between 70 and 80 of the 128 workers on board to nearby installations. “Repairs will be needed, it is too early to say when production can restart,” the spokesperson said. A notice published by Norwegian gas system operator Gassco cut Visund’s available capacity to 2.5 million cubic meters per day from 12:53 CET on Wednesday, and to zero for Thursday’s gas day. The notice lists the duration as uncertain.

Gassco lists three other unplanned Norwegian outages. Åsgard is down 7.2 million cubic meters per day until Friday morning. Oseberg lost 9.6 million on Wednesday and expects 5.3 million to be unavailable on Thursday, and Troll lost 5.6 million on Wednesday. Norwegian export nominations for Wednesday’s gas day stood at 324.8 million cubic meters as of 17:03 CET.

Visund, in the Tampen area northeast of the Gullfaks field, has produced since 1999 and produces mostly gas. It sent 5.1 billion cubic meters of gas to market in 2025, according to the Norwegian Offshore Directorate. The gas moves through the Kvitebjørn pipeline to the Kollsnes processing plant and on to Europe. Equinor operates the field with 53.2%, alongside Petoro with 30%, ConocoPhillips with 9.1% and Repsol with 7.7%.


European gas prices fell 2% on Wednesday as traders watched Washington’s next move on Iran. The IEA has warned that the global gas crunch could last well into 2027.

By Charles Kennedy for Oilprice.com

Oil Prices Continue to Fall as Democratic Sweep Shakes Energy Markets

By Irina Slav - Nov 05, 2026



Crude oil prices moved even lower, and energy company stocks followed after the results of the U.S. midterms, as markets brace for a potentially radical change in U.S. policies.


At the time of writing, Brent crude was trading at $94.30 per barrel, after dropping by 9% on Wednesday, and West Texas Intermediate was trading at $87.35 per barrel, after shedding 8% on Wednesday, following the Democrats’ majority in both houses.


The S&P Energy index was down by 4.77% as of the time of writing, to 976.18, on expectations of a shift in U.S. foreign policy, and energy policy, too. The expectations on the latter were driven by the landslide victories of Democrat candidates in Texas and Georgia, after they ran on platforms featuring opposition to new data center construction. Data centers have been the focus of natural gas demand projections over both the short and long term.

While limiting new data center construction may be relatively easy, ending the war with Iran might prove a lot trickier. As suggested by the latest moves in oil and energy stocks, hopes are running high, but some analysts have warned the election results might in fact push President Trump closer to choosing escalation instead of de-escalation. Such a development would aggravate the energy security situation globally.

“If Tehran recognises that Trump needs a deal, but not just any deal, a genuine opportunity could emerge to end the war. But if it interprets the results as evidence that American resolve has weakened, it could instead encourage him to launch a new military escalation,” the president of the Abu Dhabi-based Emirates Policy Center, Ebtesam al-Ketbi, said, as quoted by Reuters.

The publication reported, citing unnamed Iranian officials, that Tehran “remained on high alert”, expecting an escalation from Trump to make up for the election loss.

By Irina Slav for Oilprice.com

EU Survey Reveals Massive Support for Renewable Energy Transition

By Irina Slav - Nov 05, 2026



A majority of European Union citizens are in favor of an accelerated transition away from oil and gas and into alternative energy sources and transport electrification, a survey conducted by the European Investment Bank has shown, as reported by Reuters, which got an exclusive look at the survey.

According to the survey, which involved 23,000 respondents, 87% wanted governments to make the transition a priority, with 52% saying solar should be at the top of the list of alternative, low-carbon energy sources. Nuclear, on the other hand, had only 19% saying it should be prioritized. The percentage in favor of wind as a top alternative energy source stood at 37%.

“In a rapidly shifting geopolitical landscape, this is both the right thing to do for the planet and the smart thing to do for our economies, in order to bring down energy costs for businesses and households,” the president of EIB Group, Nadia Calvino, told Reuters.

Calvino’s second point is interesting because over the past decade since the Paris Agreement was signed, the EU member states that spent the most on wind, solar, and electric vehicle support saw their electricity prices rise the most as well, while transition laggards have managed to keep bills relatively affordable.

The war between the U.S., Israel, and Iran has highlighted the drawbacks of energy import dependence and strengthened the argument for locally sourced energy, especially from wind and solar installations, but also oil and gas where it is present.

Proponents argue that both of these, especially solar, are already cheaper than gas generation. Critics note the cost estimates for wind and solar are based on levelized cost of energy metrics that exclude a lot of actual costs, such as the cost of electricity that needs to come from a baseload generator when there is no sun or, indeed, wind.

By Irina Slav for Oilprice.com

 

Can Cheap Batteries Deliver COP31’s 35% Electrification Goal?

By Haley Zaremba - Nov 04, 2026

• Türkiye will ask countries at COP31 in Antalya (Nov. 9 to 20) to sign a voluntary pledge for 35% global electrification by 2035, a target experts now say is within striking distance.
• 
  
• The U.S. installed a record 20.2 GWh of storage in Q2 and 30.8 GWh in the first half, while utility-scale capacity nearly doubled to 165 GWh from 88 GWh in 18 months despite Trump’s lack of enthusiasm.
• 
  
• Cheap Chinese solar and batteries are carrying the shift in poorer countries too, with Pakistan leading rooftop adoption and Brazil, Chile and Kenya among those said to have passed the U.S.
• 
  

Electrification will be the major focus of the upcoming COP31 United Nations climate conference, to be held in Antalya, Türkiye, from November 9 to 20, 2026. The host country will invite the attending nations to sign onto a voluntary pledge to reach 35 percent electrification on a global level by 2035. Just a year ago, this target may have seemed overly ambitious, but now, experts say that a number of factors, including volatile oil and gas markets stemming from the war in Iran, paired with enormous advances in clean energy technologies, have put that goal within “striking distance.”

The months-long closure of the Strait of Hormuz has catalyzed the clean energy transition and the rate of electrification around the world. Before the United States and Israel began their military offensive in Iran back in February of this year, one fifth of the world’s oil and gas trade flowed through the Strait of Hormuz. Its abrupt closure therefore sent global oil and gas markets into turmoil and sent energy-importing countries around the world scrambling for alternatives, especially ones that they could produce and control on their home soil. And, just like that, renewable energy became the new face of energy security. 

“Wind and solar cannot be embargoed, blockaded, or shut off by a foreign power,” David Frykman, General Partner at Stockholm-based venture capital group Norrsken, wrote in an op-ed for Fortune earlier this year. “Every terawatt-hour of domestic renewable generation is a terawatt-hour that no adversary can weaponize.”

But there is another, quieter force that has made this rapid global pivot toward renewable energies possible – the energy storage boom. Energy storage is critical to ensure grid stability in the face of rapid electrification and the increasing representation of intermittent energy sources like wind and solar power in national energy mixes. Major advances in the sector in recent years have made battery storage more affordable and more scalable than ever before – just in time for the world’s most recent bout of ‘fossilflation.’

“What's really become a game-changer in the past two years is the rapid deployment of large-scale batteries that can hang onto ever larger amounts of power to be used throughout the day to smooth out demand and avoid overtaxing the grid,” Forbes wrote in a Monday report. 

The second quarter of this year saw the United States’ largest-ever energy storage expansion, at  20.2 gigawatt-hours of additional capacity, according to a report by the Solar Energy Industries Association and Benchmark Mineral Intelligence. That puts this year’s total additions at 30.8 GWh – and counting.

“Although President Trump is no fan of renewable energy or batteries, utility-scale energy storage capacity still nearly doubled to 165 GWh from 88 GWh in the first 18 months of his administration,” the Forbes article goes on to detail. “Grid operators, utilities and data center developers are all buying batteries as fast as they can to meet power demand and improve grid reliability. As a result, battery energy storage systems supplied more electricity to the grid in the year’s first eight months than in all of 2025.”

Ironically, despite his best efforts, Donald Trump is overseeing one of the United States’ most significant clean energy booms in the nation’s history as solar and wind have simply become too cheap to fail. And the United States is not alone. Buoyed by a flood of cheap solar panels and battery storage systems coming out of China, even the world’s poorest countries are experiencing clean energy revolutions. 

“Some countries are pulling off stunningly fast energy transitions, adding solar so rapidly, it’s become a major source of electricity over the course of years — not decades,” reports CNN. Pakistan has become the surprise poster child of this trend as residents install rooftop solar and batteries faster than any other market on Earth, as these systems provide electricity more cheaply and reliably than the country’s own beleaguered energy infrastructure. In addition, emerging economies including Brazil, Chile, El Salvador, Morocco, Kenya, and Namibia have all overtaken the United States – the world’s largest economy – in their clean energy transitions.

By Haley Zaremba for Oilprice.com 

Iran War and AI Boom Drive Global Gas Supply Crunch

By Irina Slav - Nov 04, 2026

• Asian LNG prices have more than tripled to over $31/MMBtu, as Europe and Asia compete for scarce supplies following the disruption of Qatari exports.
• 
  
• The Iran war has wiped out an estimated 60 billion cubic meters of LNG supply, with the IEA forecasting a record 3% decline in global production this year.
• 
  
• The LNG crunch could persist well into 2027, as growing AI-driven power demand, limited supply growth and Qatar's prolonged export disruptions keep markets tight.
• 
  

LNG spot market prices in Asia have tripled since the start of the year. Asia and Europe are locked in a race for a limited number of cargoes. The U.S. is exporting record volumes of the fuel. And QatarEnergy just extended a force majeure on its own LNG exports. The world is short on gas—and will remain so for a while.

The Japan-Korea Marker, the Asian LNG benchmark, topped $31 per million British thermal units this month. In fact, the benchmark briefly rose above $33 per mmBtu, compared with a little over $9 per mmBtu in January this year. The price change speaks volumes about the impact of the war in the Persian Gulf on global gas supply security, as it took one of the top three liquefied gas exporters off the market.

Replacing Qatar has proven difficult, even for the United States, which has boosted its LNG exports substantially, thanks mostly to strong demand from Europe, which has few alternatives to Qatari LNG, unlike Asia, which has the alternative of coal and is taking advantage of it. Still, gas supply is tight and will remain tight next year as well, the International Energy Agency warned this week.

The war between the United States and Israel, and Iran, cost the world some 60 billion cu m in LNG supply losses in the eight months to October, the IEA has estimated. Higher production in the United States and Africa helped fill much of that gap—as much as two-thirds. Alas, two-thirds is not 100%, so a gap remains, and the IEA expects global LNG production to decline by 3% this year, with the March-October period seeing a 6% drop. A 3% supply decline might not seem like much, but it would be the steepest annual drop since records began—and it comes as demand expectations rise amid the AI race.

Until the war in the Middle East began, the outlook for natural gas generally and LNG specifically was exceptionally bullish thanks to the boom in data center construction as Big Tech prioritizes artificial intelligence as its number-one growth engine for the future. Data centers, it was quickly discovered, cannot be powered reliably by alternative energy sources such as wind and solar, even with batteries. The most viable—and quickest—option was natural gas.

Based on these demand trends, Shell said in its LNG Outlook 2026 that it expected demand for liquefied gas to surge by 65% between this year and 2050—despite the disruption in Qatari exports caused by the war. “The conflict created a system-wide shock with disruption cascading across all segments of the economy, but the LNG industry has proved resilient and able to adapt to changing market conditions,” Shell’s head of natural gas operations said at the time.

The LNG industry has indeed adapted, mostly through production ramp-ups at existing facilities or plans for additional capacity that just a year ago was flagged as potentially surplus and leading to a major LNG supply glut. But with the war still quite hot and Qatari gas still unavailable, nobody is talking about a glut anymore. Qatar has taken an interesting approach to securing long-term supply.

In recent weeks, the country's state energy company closed two long-term LNG supply deals with U.S. companies. One deal is for 4 million tons of LNG annually from Cheniere Energy. The other is for 3 million tons annually from Woodside Energy. This, according to Reuters, will make QatarEnergy the biggest foreign buyer of U.S. liquefied gas. QatarEnergy has expansion plans, and a force majeure on domestic production is not going to get in the way. This signals confidence in the resilience of LNG demand—even as some question it.

Energy Intelligence recently voiced the suggestion that the war-related price surge could dampen demand for liquefied natural gas, in line with historical patterns in oil and other commodities, energy and otherwise. However, it could be counter-argued that any demand dampening in LNG would be, first, limited, and, second, temporary because demand for energy commodities tends to be rather inelastic.

Indeed, demand is already down. The IEA reported that over the first nine months of the year, total gas consumption globally went down—but it went down by just 1% or 35 billion cu m. This is not a proportional decline to the squeeze in supply, in evidence of that inelasticity above. It is also evidence that the long-term outlook for LNG and gas in general is rightly optimistic. Unfortunately for those concerned about the relative emission output of gas and coal, so is the outlook for coal, because coal is cheaper than gas.

By Irina Slav for Oilprice.com

Polar Vortex Puts Europe's Gas Reserves at Risk

By ZeroHedge - Nov 04, 2026

The European Center for Medium-Range Weather Forecasts shows signs of an early disruption of the Arctic polar vortex that could send cold air into Northwest Europe as the energy-stricken continent faces a very thin supply buffer before the Northern Hemisphere winter gathers pace.

One week ago, we reported that signs of a potentially record-early sudden stratospheric warming were developing and that a split in the vortex could send Arctic air into the northern US and/or parts of Europe within weeks.

BloombergNEF reports that one week of Arctic air could send heating demand soaring in Europe and wipe out any natural gas storage gains made during October's mild weather. 

If temperatures average 5C below the 10-year normal in the first week of December, heating demand across Northwest Europe, Italy, Spain and Austria would soar by about 1.1 billion cubic meters. 

Here's more from the report:

A week of materially colder weather could quickly erode Europe's already thin gas storage buffer.

If temperatures across Europe averaged 5°C below the 10-year normal over Dec. 2-8, heating demand across the BNEF Europe Perimeter (Northwest Europe, Italy, Spain and Austria) would rise by around 1.1 billion cubic meters.

And if that additional demand were met entirely from storage, end-March inventories would fall to about 15.5% full, from around 17% under average weather. That would leave stocks only around half a percentage point above BNEF's estimated minimum, the end-March level below which Europe would begin drawing on gas assumed to be held as strategic reserves rather than normal commercial inventories.

October's mild weather helped Europe build a larger-than-expected cushion heading into winter. Lower heating demand allowed injections to continue later into the season, leaving storage additions around 1 Bcm above the 2021-25 October average.

Europe is entering the cold period with NatGas inventories at their lowest seasonal level since the 2022 energy crisis, at around 74% of capacity. This means the buffers that shield the continent from demand shocks will draw down to dangerously low levels by March. 

On Tuesday, the International Energy Agency released a new report warning of just that, citing a "reduced buffer against supply disruptions" and forecasting that NatGas storage levels on the continent could drop below 10% by late March. 

"This would leave the European market particularly exposed to events, whether additional cold snaps, technical outages or other supply disruptions, since the rate at which gas can be withdrawn from storage sites tends to decline once fill levels fall below 30% of working capacity," the IEA wrote in the report.

As we noted, energy markets in the US and Europe differ starkly: EU NatGas futures trade at roughly 11 times US NatGas prices.

Europe is just a couple of cold snaps away from a deepening energy crisis that will keep EU NatGas prices elevated well into next spring. 

By Zerohedge.com

ICYMI

Alleged Russian Funding Prompts Executive Exodus at U.S. LNG Firm

By Charles Kennedy - Oct 26, 2026

• Polar LNG's senior executives have resigned amid allegations of undisclosed Russian funding, claiming Novatek was financing and influencing the Alaska LNG startup.
• 
  
• The proposed Alaska LNG project faces potential sanctions complications, with U.S. approval still pending for the purchase of equipment from Novatek.
• 
  
• Polar LNG denies wrongdoing and disputes its former CEO's account, insisting its activities comply with U.S. law while targeting first gas deliveries by 2030.
• 
  

The top executives of U.S. energy startup Polar LNG have all resigned in recent weeks, just six months after the company was launched, amid a controversy over alleged funding and control of the venture’s strategy by Russia’s biggest LNG developer and exporter, privately-held Novatek.

The senior managers who left Polar LNG say they resigned in September after learning earlier during the month that Novatek was at least partly funding the U.S. company, which looks to build a project on Alaska’s North Slope.

Polar LNG was created in March 2026, pitching its proposed North Slope location as offering “one of the shortest shipping routes from North America to key Asian markets” to expand U.S. LNG exports to Asia.

Polar LNG also specifically said it “is not in competition with the proposed Alaska LNG pipeline. The North Slope contains far more gas than any single project can develop, and success depends on advancing multiple efforts in parallel.”

Polar LNG touted its investment proposition as a project that would use a modular gravity-based structure (GBS) to process and liquefy the gas directly at the source to accelerate construction and lower costs. The startup plans to buy an unfinished GBS from Novatek and has applied to the U.S. Treasury’s Office of Foreign Assets Control (OFAC) to be authorized to do so.

U.S. authorization hasn’t been granted yet.

However, the former Polar LNG employees say they are concerned about potential violations of the U.S. sanctions on Russia. While the U.S. has not sanctioned Novatek, it blacklisted in 2023 Novatek’s Arctic LNG-2 project whose expansion has since stalled.

Joel Riddle, who resigned as CEO of Polar LNG in September, told the Financial Times last week that he discovered Novatek was actually calling the shots and providing capital to the project without approval from the Treasury’s OFAC or other agencies of the U.S. Administration.

“I resigned as chief executive of Polar LNG because I felt uncomfortable that the Russian company Novatek was financing and ultimately controlling the strategic direction of the company,” Riddle told FT.

Furthermore, two former Polar LNG executives told The Wall Street Journal this weekend that senior executives at the company had shared concerns about Novatek’s role with the Administration in early September and that government officials had also expressed concern.

Abu Dhabi-based TechWave, an engineering firm, has provided capital to Polar LNG.

Bjorn Gundersen, a former executive at Novatek, is now at TechWave, sources with knowledge of the matter told the Journal.

During discussions about new funding for the U.S. project this summer, Riddle found out that Novatek was already financing Polar LNG and directing its operations before U.S. approvals were obtained.

Polar LNG last week issued a statement referring to the leadership change following “concerns regarding a disgruntled former employee, Joel Riddle.”

“Riddle was recently terminated from the company for cause. The company is investigating claims concerning Riddle that may result in litigation. To preserve the integrity of that process, the company will not comment further on the matters under discussion and asks other parties to exercise similar restraint,” Polar LNG said.

It added that “TechWave has provided financing to Polar LNG and initiated preliminary engineering work involving U.S. contractors. The project is seeking American investors and implementation partners.”

“Development activities are being pursued in full compliance with applicable U.S. laws,” said the U.S. start-up, which has submitted an application to OFAC “for a license authorizing the proposed purchase of an unfinished GBS from privately-owned Russian private company NOVATEK.”

There has been no progress in securing a license, various sources tell the Journal.

The alleged Russian funding and the potential sanctions threat could derail the Polar LNG project, which currently targets beginning natural gas deliveries “by the end of 2030, subject to securing necessary permits, financing, engineering and other development requirements.”

By Charles Kennedy for Oilprice.com

 

Qatar Becomes Largest Buyer of U.S. LNG Amid Hormuz Crisis

By Tsvetana Paraskova - Nov 04, 2026

• Qatar is set to become the largest buyer of U.S. LNG, signing long-term deals for 7 million tonnes annually with Cheniere and Woodside.
• 
  
• The Iran war has crippled Qatar's LNG industry, destroying 17% of export capacity, causing $20 billion in annual revenue losses and severely restricting shipments through Hormuz.
• 
  
• QatarEnergy is diversifying away from its reliance on the Strait of Hormuz, turning to U.S. LNG supplies to protect its global market position and improve supply reliability.
• 
  

In an extraordinary turn of events, Qatar, the world’s second-largest LNG exporter before the Iran war, will become the biggest buyer of liquefied natural gas from the United States, the producer that overtook the Gulf nation as top LNG exporter earlier this decade.

This extraordinary turn of events is, of course, the result of the extraordinary disruption that the Iran war and the closure of the Strait of Hormuz inflicted on Qatar, the LNG producer whose expansion plans for the rest of this decade were rivaled only by the U.S.

The war and the Strait of Hormuz crisis, which is still blocking much of Qatar’s LNG exports, have upended these plans. State-energy firm QatarEnergy is now scrambling to repair the damage at its LNG facilities caused by Iranian missile attacks in March. These attacks took out 17% of Qatar’s export capacity and caused an estimated loss of $20 billion in annual revenue, QatarEnergy said in March.

Seven months later, Qatar is barely moving “very few” cargoes through the Strait of Hormuz as the protracted crisis chokes supply to markets of the LNG volumes that Qatar would have produced, even at reduced capacity.

QatarEnergy has been forced to declare force majeure for up to five years on some long-term LNG contracts. Suddenly, Qatar faces tens of billions of dollars in losses from missed sales. More importantly, the perception that Qatar is a reliable supplier of regular term deliveries has been undermined.The Qatari state-owned energy giant last week extended the force majeure on LNG deliveries to Asia and Europe by another month through the end of December 2026, as LNG cargo traffic through the Strait of Hormuz remains largely blocked. 

Unlike oil, LNG exporters cannot transport volumes via pipelines, Saad Sherida Al-Kaabi, President and CEO of QatarEnergy and Qatar’s Minister of State for Energy Affairs, said in September.

“The problem is that LNG, our main export commodity, cannot be transported by pipelines. We will have to transport it by pipelines as gas and then liquify it at receiving terminals wherever that may be,” Al-Kaabi said at the Qatar Economic Forum Special Edition in New York in September.

“This means we are building redundant facilities to the ones we are already building in Qatar as part of the North Field expansion project. This makes no economic sense,” the minister explained, and added, “We have decided not to use pipelines as an alternative based on commercial and technical criteria.”

Referring to resuming LNG production and exports, “Qatar is ready to resume normal operations within a few weeks of the reopening of the Strait of Hormuz,” the official noted.

As we enter the ninth month of the Hormuz crisis, Qatar is hedging against what could be a forever-changed access through the chokepoint.

“Some shipments are going through the Iranian road to Pakistan, and some are going through the U.S. road to other destinations, but it’s just a few ships that are passing, that were able to pass through the Strait, but it’s not much,” Al-Kaabi said at the Qatar Economic Forum in New York.

With its only route to market blocked, Qatar last month hedged its bets against future disruptions by signing two separate agreements to buy LNG from U.S. producers to diversify its portfolio.

QatarEnergy signed two long-term deals with Cheniere to buy up to 4 million tons per annum of LNG from Cheniere’s Sabine Pass and Corpus Christi export facilities, with deliveries expected to begin in 2031 and continue through 2054.

The Qatari firm also signed a long-term agreement to buy 3 million tons per annum of LNG from Woodside Energy’s Louisiana LNG project, which is currently under construction. Deliveries on a free-on-board (FOB) basis are set to begin in 2030 for 20 years.

“These additional volumes make QatarEnergy the largest buyer of LNG from the U.S., and place us in a stronger position to meet the global growing needs for LNG,” QatarEnergy’s Al-Kaabi said.

“Our Golden Pass LNG project and our expanding portfolio of U.S. LNG purchases reinforce QatarEnergy’s leadership in the LNG industry and support our long-term growth and diversification strategy.”

With Hormuz out of the picture in the near term and uncertainty about disruptions in the longer term, Qatar is expanding its LNG supply options with deliveries from its biggest rival, the United States.

The deal with Woodside “reflects QatarEnergy’s continued confidence in the long-term role of LNG in the global energy mix and its strategy to further develop a flexible, diversified and globally competitive LNG portfolio,” the Qatari firm said, as the Iran war fundamentally changed the global LNG supply market in both availability and reliability.

By Tsvetana Paraskova for Oilprice.com