Oil prices could hit $150 per barrel amid strait of Hormuz crisis, Qatar warns

Qatar’s Energy Minister, Saad Al-Kaabi, has warned that crude oil prices could surge to $150 per barrel within two to three weeks if tankers continue to be unable to pass through the Strait of Hormuz.

Al-Kaabi made the forecast on Friday in an interview with the Financial Times, citing escalating security risks in the Middle East following US and Israeli strikes on Iran.

On March 2, major container shipping lines suspended sailings through the Strait of Hormuz and the Suez Canal due to mounting concerns over regional instability. The Strait of Hormuz, a narrow maritime passage linking the Persian Gulf to the Gulf of Oman and the Arabian Sea, serves as the sole sea route connecting Gulf oil and gas producers to global markets.

Al-Kaabi said energy markets could face severe disruptions if maritime traffic remains blocked. He also projected that natural gas prices could rise to $40 per metric million British thermal units (MMBtu), almost four times pre-war levels, if supply disruptions persist.

“If the conflict continues, energy producers across the Gulf region may be forced to declare force majeure, potentially suspending energy deliveries,” Al-Kaabi said. “Everybody that has not called for force majeure, we expect will do so in the next few days if this continues. All exporters in the Gulf region will have to call force majeure. If they don’t, they are at some point going to pay the liability for that legally, and that’s their choice.”

The minister also confirmed that QatarEnergy had halted liquefied natural gas (LNG) production due to Iranian military attacks on its facilities. “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,” Al-Kaabi said, noting that even if hostilities stopped immediately, full export operations could take weeks to months to resume because of logistical disruptions.

Saudi Aramco also suspended operations at its Ras Tanura oil refinery following a fire caused by debris from an Iranian drone attack.

The disruptions have already impacted fuel prices in Nigeria. On March 5, the Nigerian National Petroleum Company (NNPC) Limited increased petrol prices to N933 per litre in Lagos and N960 per litre in Abuja, following a hike in the Dangote Petroleum Refinery’s ex-gantry price from N774 to N874 per litre.