Gulf Nations Invoke Force Majeure Amid US-Israel War on Iran

In response to the ongoing conflict between the United States, Israel, and Iran, several Gulf nations, including Qatar, Bahrain, and Kuwait, have declared force majeure on oil and gas exports. This legal clause allows companies to suspend their contractual obligations without incurring penalties due to extraordinary circumstances. The conflict, which escalated following US-Israeli military strikes on Iran, has led to significant disruptions in shipping through the Strait of Hormuz, a critical maritime route for global energy supplies.

Al Jazeera (website)Understanding Force Majeure: The Reasons Gulf Countries Are Invoking It During the Iran vs. US-Israel ConflictWhy have some Gulf countries invoked force majeure?Gulf Nations Invoke Force Majeure Shipping DisruptionsAl Jazeera (website)Bahrain’s Bapco Energies declares force majeure after refinery hit

QatarEnergy was among the first to halt gas production on March 2, 2026, triggering a ripple effect across global energy markets. Kuwait Petroleum Corporation and Bahrain’s Bapco Energies followed suit shortly after. The invocation of force majeure by these companies is primarily a response to the severe disruptions caused by military actions and threats to shipping routes. As a result, oil prices surged to over $100 per barrel, reflecting the heightened uncertainty surrounding energy shipments.

Gulf Nations Invoke Force Majeure Shipping DisruptionsWhy have some Gulf countries invoked force majeure?Understanding Force Majeure: The Reasons Gulf Countries Are Invoking It During the Iran vs. US-Israel ConflictAl Jazeera (website)Bahrain’s Bapco Energies declares force majeure after refinery hitAl Jazeera (website)

The declarations of force majeure have already had significant repercussions for global liquefied natural gas (LNG) markets. Qatar, which accounts for nearly 20% of global LNG supply, has seen gas prices soar following its production halt. Analysts predict that the lack of clarity regarding the conflict's duration will keep prices volatile, potentially leading to shortages in the coming weeks. The situation has prompted India to invoke emergency measures to redirect gas supplies to priority sectors, highlighting the difficult choices faced by LNG-dependent countries.

Gulf Nations Invoke Force Majeure Shipping DisruptionsAl Jazeera (website)Understanding Force Majeure: The Reasons Gulf Countries Are Invoking It During the Iran vs. US-Israel ConflictWhy have some Gulf countries invoked force majeure?Al Jazeera (website)Bahrain’s Bapco Energies declares force majeure after refinery hit

The disruptions are expected to disproportionately affect Asian economies, such as India, China, and South Korea, which heavily rely on imported LNG. Wealthier nations like Japan and South Korea may outbid others for limited supplies, while price-sensitive importers in Southeast Asia could face demand destruction as prices rise. The economic fallout from elevated energy prices may exacerbate inflation and economic uncertainty in these regions.

Al Jazeera (website)

Energy analysts have noted that the ongoing conflict could lead to substantial economic consequences for energy-dependent countries. Seb Kennedy, a global gas and LNG analyst, stated, “The lack of visibility over the likely duration of force majeure... is injecting extreme uncertainty into global oil, gas, and LNG prices.” Additionally, Qatar's energy minister has indicated that all Gulf energy producers may shut down exports within weeks, potentially driving oil prices to $150 per barrel.

Gulf Nations Invoke Force Majeure Shipping DisruptionsUnderstanding Force Majeure: The Reasons Gulf Countries Are Invoking It During the Iran vs. US-Israel ConflictAl Jazeera (website)Why have some Gulf countries invoked force majeure?Bahrain’s Bapco Energies declares force majeure after refinery hit

While the invocation of force majeure is legally justified, some experts argue that it may lead to long-term challenges in doing business with Gulf countries. Ilias Bantekas, a professor of transnational law, noted that “doing business with Gulf countries could become more difficult in the future, and premiums would likely rise significantly.” This sentiment reflects concerns that the legal maneuver could create a precedent for future disputes over energy contracts.

Understanding Force Majeure: The Reasons Gulf Countries Are Invoking It During the Iran vs. US-Israel Conflict

There are discrepancies regarding the extent of the disruptions and their implications for global markets. While some analysts predict significant windfall profits for US LNG exporters, others caution that the long-term effects on global energy prices and supply chains remain uncertain. The situation continues to evolve, and further escalations in the conflict could lead to additional force majeure declarations, exacerbating the current energy crisis.

Understanding Force Majeure: The Reasons Gulf Countries Are Invoking It During the Iran vs. US-Israel Conflict

• “The lack of visibility over the likely duration of force majeure, and of the broader military conflict, is injecting extreme uncertainty into global oil, gas and LNG prices,” — Seb Kennedy, Global Gas and LNG Analyst

Al Jazeera (website)

• “Doing business with Gulf countries could become more difficult in the future, and premiums would likely rise significantly.” — Ilias Bantekas, Professor of Transnational Law

Al Jazeera (website)