Shell declares force majeure on Qatar LNG contracts as global supply crisis deepens

Shell, the world’s largest seller of liquefied natural gas, has declared force majeure on LNG supply contracts following a production shutdown at Qatari facilities, escalating fears of a protracted disruption to global energy markets.

According to sources cited by Reuters, Shell notified customers that shipments it had purchased from QatarEnergy may no longer be deliverable under existing contractual terms. Sources confirmed that the company had invoked this legal mechanism specifically for cargoes it normally sources from Qatar and resells across international markets. Force majeure is a contractual safeguard that releases parties from obligations when circumstances beyond their control prevent fulfillment.

The declaration traces directly to drone strikes on Iran’s Ras Laffan LNG facility. QatarEnergy suspended operations at the world’s largest liquefaction complex earlier this month in response to the attacks and simultaneously declared force majeure of its own. Ras Laffan, with an annual liquefaction capacity of approximately 77 million tonnes, is the linchpin of Qatar’s position as the world’s second-largest LNG exporter.

Supply chain hit by domino effect

Shell’s declaration is not an isolated response. Multiple buyers of Qatari LNG — among them TotalEnergies and several Asian companies — have already warned their own customers that deliveries may be disrupted for as long as the facilities remain offline, Reuters reported, citing sources.

TotalEnergies has not formally declared force majeure. March deliveries are expected to proceed largely as planned; however, sources indicate that disruptions are set to materialize in April. Qatar’s Energy Minister Saad al-Kaabi made clear that the cascade of legal declarations has only begun.

“We expect anyone who has not declared force majeure to do so within the next few days if this situation continues,” al-Kaabi said. “All exporters in the Gulf region will have to declare force majeure.”

Worst disruption since 2008

Vessel-tracking data shared by industry analysts lays bare the scale of the crisis: Qatar has not exported a single LNG cargo for five consecutive days — the longest uninterrupted halt recorded since 2008.

Reports indicate that some LNG cargoes originally destined for Europe are being redirected to Asian markets, where buyers are offering higher prices, compounding supply pressures for European energy companies. As buyers in both regions scramble for alternative sources, Asian economies are absorbing the sharpest immediate blow. More than 80% of the region’s largest cities’ oil imports originate from the Persian Gulf, a structural dependence that amplifies the shock considerably.

Experts warn of ‘energy panic’

The disruption, triggered by US military operations against Iran, has led analysts to warn that Asia now confronts a full-scale energy panic.

“A finely balanced energy ecosystem has suddenly caught fire — both exporters and importers are being severely affected,” said Tim Partridge of LG Energy Group.

Al-Kaabi, speaking to the Financial Times, cautioned that even if regional hostilities were to cease immediately, the resumption of normal shipments could take weeks, or potentially months. Sources told Reuters that LNG deliveries scheduled for the current month are largely expected to proceed on schedule, but that major contractual disruptions could begin affecting supply from April onward.