QatarEnergy LNG Force Majeure Extends Through October as Hormuz Closure Drives Buyers Toward US Supply

QatarEnergy extended its force majeure declaration on LNG deliveries and began chartering out tankers into October, according to industry reports from Gas Processing News dated July 23. The force majeure covers cargoes that would normally transit the Strait of Hormuz, which Iran has kept closed to international shipping despite this weekend's US-Iran bombing pause. European TTF natural gas fell 6.65 percent to EUR 58.94 per megawatt-hour on Monday, according to Trading Economics, as some risk premium unwound on ceasefire news. The pullback follows the recent TTF spike covered in a previous Oil Authority report, when European gas hit EUR 63 per megawatt-hour, the highest since January 2023.

JV Partners Share the Force Majeure Exposure

QatarEnergy operates its LNG export trains jointly with several Western oil majors under the North Field expansion agreements signed in 2021 and 2022. TotalEnergies, ExxonMobil, and ConocoPhillips each hold equity positions in the North Field East trains, alongside Shell and Eni. A force majeure declaration by QatarEnergy applies to equity cargo entitlements held by all JV partners, not only to QatarEnergy's own volumes. These partners must now source replacement LNG cargoes from alternative origins or renegotiate offtake terms with their downstream customers.

Buyers Press Qatar and UAE for Cheaper, Flexible Terms

With Qatari LNG unavailable through the closed Strait, long-term contract holders are pressing QatarEnergy and Abu Dhabi's ADNOC LNG for cheaper rates and more flexible delivery terms, per Gas Processing News. The negotiations reflect a broader market dynamic: buyers who locked in multi-year contracts below current spot prices cannot receive the physical volumes. Spot LNG markets in Asia and Europe face tightened availability as the Hormuz closure disrupts a significant share of global LNG trade. An LNG tanker was struck near the Strait in recent days, further complicating maritime insurance underwriting for the route, per the same reporting.

The US-to-Europe Gas Spread: $16.89 per MMBtu

The Hormuz closure has widened the spread between US and European natural gas prices to levels that make US LNG exports highly profitable for operators with available liquefaction capacity. TTF European gas traded at EUR 58.94 per megawatt-hour on Monday, per Trading Economics. Converting at Monday's EUR/USD rate of 1.1382, also from Trading Economics, that equates to approximately $19.66 per MMBtu. Henry Hub natural gas, meanwhile, traded at $2.77 per MMBtu on Monday per Trading Economics, leaving a gross hub-to-hub spread of $16.89 per MMBtu.

US LNG export terminals, including Sabine Pass and Corpus Christi, charge roughly $2 to $3 per MMBtu in liquefaction fees under toll-based operating agreements. Shipping to Europe adds another $1 to $2 per MMBtu. At the current spread, the net margin available to US LNG exporters serving European buyers runs to roughly $12 to $14 per MMBtu on each cargo. The Department of Energy recently authorized a 20-year LNG export license for the Argent LNG project at Port Fourchon, a decision whose commercial rationale is reinforced by a Hormuz closure that could extend for months.