On August 28, Italian energy company Edison announced that QatarEnergy had once again extended the force majeure period, with five more LNG cargoes originally scheduled for delivery between late September and early November being cancelled. Since QatarEnergy first declared force majeure in April this year, Edison has seen a total of 29 LNG cargoes affected, equivalent to approximately 3.8 billion cubic metres of natural gas.
Edison's long-term contract with QatarEnergy began in 2009 and runs for 25 years, with an annual supply volume of about 6.4 billion cubic metres, representing roughly 10% of Italy's natural gas demand. As of August 28, Edison had secured replacement supplies through the Adriatic LNG terminal, substituting a total of 21 cargoes, or about 2 billion cubic metres of natural gas.
The disruption to Qatar's LNG supply has now lasted nearly six months, with no signs of recovery in sight.
According to Reuters, citing data from shipping data company ICIS, Qatar has exported only 18 LNG cargoes since the outbreak of the US-Iran war, compared with 509 cargoes in the same period last year – a drop of 96%. Qatar has thus lost an estimated US$24 billion in natural gas sales revenue, equivalent to five months of government income for the country.
Unlike regional oil-producing nations, Qatar's LNG must be shipped through the Strait of Hormuz via specialised vessels, leaving the vast majority of its production capacity locked inside the Gulf with no alternative route. Regional oil producers, by contrast, can transport crude via overland pipelines that bypass the strait to the Red Sea.
Earlier, the world's largest LNG export facility, Ras Laffan, sustained damage, reducing Qatar's export capacity by 17%, with repairs potentially taking up to five years. Before the war, Qatar supplied about one-fifth of the world's LNG.
According to data from Gas Infrastructure Europe (GIE), as of the end of August, the EU's natural gas storage fill rate stood at 63.28%, which is 17.24 percentage points below the five-year average for the same period and the lowest level for this time of year since 2013. EU storage volumes total approximately 69.2 billion cubic metres, 14.3 billion cubic metres less than at the same time last year.
On September 1, the European TTF natural gas benchmark price rose to around €71.70 per megawatt-hour, the highest level since the start of the US-Iran war. Since mid-August, gas prices have risen by about 40% cumulatively. Commodity experts at Commerzbank cited the Qatari supply disruption and the blockage of shipping through the Strait of Hormuz as the main drivers.
The surge in natural gas prices has raised both energy and feedstock costs for Europe's chemical industry. Natural gas serves not only as fuel for production operations but also as a raw material for basic chemical products such as ammonia, methanol, and hydrogen. Tighter gas supplies have pushed up production costs for fertilisers, methanol, and other basic chemicals, with the impact cascading downstream to products including MDI, TDI, vitamins, and methionine.
Soaring gas prices in Europe have driven up production costs for local chemical companies, undermining their competitiveness in the market.
Europe's chemical industry is currently operating at low capacity utilisation and undergoing capacity adjustments. High energy costs are a core factor behind the declining competitiveness of Europe's basic chemicals sector. The further tightening of LNG supply could widen the production cost gap between Europe and other regions. Some market observers believe that elevated gas prices could persist through the entirety of 2026, exerting sustained pressure on European industry and potentially triggering a new wave of deindustrialisation.
