FT: Qatar’s gas empire comes under fire

Key topics:Iran missile strike cripples Qatar’s Ras Laffan LNG facility$20bn yearly revenue loss threatens global gas supplyQatar’s role as mediator and safe haven now in question.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Andrew England in London.After the US and Israel attacked Iran, Qatar’s emir twice spoke to Donald Trump to make the case for diplomacy, warning about the “dangerous escalation”.It was a natural response from a state that has carved out a role as a mediator of conflict, including between Washington and Tehran. And Sheikh Tamim bin Hamad al-Thani, whom the US president has praised as a “great leader”, had reason to be concerned. The small, gas-rich peninsula’s territory was twice attacked during the past two years of regional war.Sheikh Tamim’s interventions were to no avail, and Qatar has now suffered the most devastating hit of anyone after the Islamic republic itself: an Iranian missile barrage on Ras Laffan, the world’s largest liquefied natural gas facility and lifeblood of the Gulf state’s economy.The repercussions of the strike will be felt not just in Doha, whose gas exports propelled it from near bankruptcy more than three decades ago to becoming one of the world’s richest nations, but across the globe.“It’s a huge setback . . . the worst nightmare for Qatar,” said Mehran Kamrava, professor of government at Georgetown University’s Doha campus. “The damage is not simply in economic terms. Economically and in terms of industry, Qatar can recover. The bigger question is the image of the place as a safe haven and being an engine of growth.”.Read more:.Qatar’s LNG giant hit as fires and damage rock global gas market.The damage to Ras Laffan will take three to five years to repair and affects facilities that produce 17 per cent of state-owned QatarEnergy’s LNG export capacity, Qatari energy minister Saad al-Kaabi said. It would affect supply markets in Europe and Asia and cost about $20bn a year in lost revenue, he said.“It is a massive negative shock to the system with far-reaching implications for a long time to come,” said Tarik Yousef, senior fellow at the Doha-based Middle East Council on Global Affairs.QatarEnergy, the world’s second-biggest LNG producer, had already suspended operations after a drone attack on Ras Laffan in the first days of the war. And Farouk Soussa, Middle East and North Africa economist at Goldman Sachs, said he expects Qatar accounts for about half of an estimated $12bn of total war losses of the six Gulf countries.The timing could not be worse. Before the war started, Doha had been preparing for a massive bonanza from a $30bn expansion of production from its North Field, the world’s largest gasfield. That would have increased Qatar’s production capacity to 126mn tonnes a year by 2027 — equivalent to about 30 per cent of global LNG demand in 2024.In anticipation of the windfall, the Qatar Investment Authority, the $550bn sovereign wealth fund and main recipient of the gas revenue, has been on a hiring spree, almost doubling its headcount over the past five years.It was predicting that its assets under management could double over five years, and was bracing to do bigger deals with greater frequency.Those plans are now expected to come under pressure as Doha will have to reassess how it manages its resources with the loss of billions of dollars of gas receipts — its prime source of revenue and export earnings.Even before this week’s attack, Kaabi had told the FT that the LNG expansion would be delayed because of the conflict.LNG has been the foundational pillar of the state since Qatar took a bet on developing its gasfields more than three decades ago, when the nation was highly indebted. Others were sceptical: BP pulled out of the project in the 1990s because it feared it would never yield decent returns.But Qatar forged ahead, using its riches to build a modern metropolis and become one of the globe’s most active investors. In 2022, it defied sceptics by hosting a successful football World Cup, and the gas expansion is supposed to set the stage for its next phase of development.Over the years, Doha had built up significant financial buffers to manage crises, Soussa said, adding that if the suspension of its output were relatively short, high gas prices could help offset revenue losses.But the longer the war goes on, and Iran’s de facto closure of the Strait of Hormuz continues, the harder that becomes.“It has resources to manage moderate losses,” Soussa said. “The concern is, what if this is longer term? What if we are talking about a year?”To negate the effects of the revenue shortfall, Doha would either have to significantly curtail expenditure, which would knock domestic economic activity, or finance the gap by dipping into its reserves. That could lead to Qatar liquidating overseas assets and repatriating them, Soussa said.The FT has previously reported that several Gulf states — including Qatar — were reviewing their investment portfolios and future commitments as a precautionary measure as they considered options to ease the financial strain.After Saudi Arabia and the United Arab Emirates imposed a regional embargo on Qatar in 2017 — in part because of its relations with Iran, with whom Doha maintains better relations than most Arab states — the QIA repatriated more than $20bn in deposits to stabilise its finances.The frustration for Qatari leaders is that, since Hamas’s October 7 2023 attack on Israel, Doha has been a driving force behind efforts to end the cycles of conflict around the region.“It’s the most serious setback they’ve had in probably the last 30 years. They weathered the blockade fairly successfully, but this is a hit to physical infrastructure,” said Kristian Coates Ulrichsen, Middle East fellow at Rice University in Texas. “What happened was the worst scenario for Qatar and what the years of mediation had sought to avoid.”The small state, long wary of its vulnerability, developed a defence strategy built on maintaining what Qatari officials term balanced relations. In tandem, it carved out a role as mediator to ensure its relevance to the US and European powers: the trusted interlocutor willing to talk to everyone from Hamas to the Taliban to Nicolás Maduro’s Venezuela.But over the past year it has learned that this, and its relationship with Washington, was no guarantee of safety.Iran fired missiles at an American base in Qatar after the US briefly joined Israel’s war against the Islamic republic last June to bomb its main nuclear sites. Three months later, Israel launched air strikes targeting Hamas’s political office in Doha, after which Trump signed an executive order in September that pledged to “guarantee the security and territorial integrity” of Qatar against external attack.In the build-up to the latest war, Doha again sought to mediate, exchanging messages between Washington and Tehran. But once Trump and Israeli Prime Minister Benjamin Netanyahu launched their bombardment, Qatar and its Gulf neighbours became a target of Iran’s ferocious retaliation.While the UAE has borne the brunt of the attacks, the strike on Ras Laffan — part of Iran’s retaliation to an Israeli attack on its own gas facilities — was the most damaging..Read more:.UAE and Qatar push diplomacy to halt Iran escalation.Georgetown University’s Kamrava predicted there would be “some serious soul searching and questioning of security assumptions” in Doha. “One assumption is they have to have a much more robust security umbrella and ensure Iran doesn’t do this again,” he said. “The other side to that is, maybe if these countries weren’t so closely allied to the US, they wouldn’t have been targeted.”.© 2026 The Financial Times Ltd.

FT: Qatar’s gas empire comes under fire

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