Saad Al-kaabi, Qatar’s energy minister, says oil price could rise to $150 per barrel in ‘two to three weeks’ if tankers remain unable to pass through the Strait of Hormuz.
Al-kaabi made the forecast on Friday in an interview with
the Financial Times.
On March 2, major container shipping lines suspended
sailings through the Strait of Hormuz and the Suez Canal over escalating
security risks in the Middle East after US and Israeli strikes on Iran.
Hormuz — a narrow maritime passage connecting the Persian
Gulf to the Gulf of Oman and the Arabian Sea — is said to be the only sea route
linking the Gulf’s oil and gas producers to global markets, making it one of
the most strategically important waterways in the world.
Speaking to Financial Times, Al-kaabi said energy markets
could face severe disruptions if maritime traffic through the Strait of Hormuz
remains blocked.
He projected that crude prices “could reach $150 a barrel
within two to three weeks if tankers and other vessels remain unable to pass
through the strategic waterway”.
Al-Kaabi also cautioned that natural gas prices could climb
to $40 per metric million British thermal units (MMBtu) if supply disruptions
continue — almost four times higher than the levels recorded before the war.
He said if the conflict persists, energy producers across
the Gulf region may be compelled to declare force majeure, potentially leading
to the suspension of energy deliveries.
“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,” Al-kaabi said.
“If they don’t, they are at some point going to pay the
liability for that legally, and that’s their choice.”
On March 2, QatarEnergy, the state-owned energy company of
Qatar, said it had halted the production of liquefied natural gas (LNG) due to
Iranian military attacks on its operating facilities.
Al-kaabi, addressing the shutdown, said the government and
QatarEnergy are still assessing the extent of the damage to the facility.
“We don’t yet know the extent of the damage, as it is
currently still being assessed. It is not clear yet how long it will take to
repair,” he said.
Even if hostilities stopped immediately, the minister said
it would take “weeks to months” for Qatar to restore normal export operations
because 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 by
debris from an Iranian drone attack at the facility.
Global supply disruptions have led to a surge in petrol pump
prices in Nigeria.
On March 5, the Nigerian National Petroleum Company (NNPC)
Limited increased petrol price at its retail outlets to N933 per litre in Lagos
and N960 per litre in Abuja.
The hike came after the Dangote Petroleum Refinery increased
its ex-gantry petrol price to N874 per litre, from N774 per litre.
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