President Trump has been sounding desperate lately for an off-ramp from the war he started, emphasizing progress in negotiations that may or may not reflect reality and declaring that “this war has been won” despite ample evidence to the contrary. An Iranian missile attack on a major natural-gas facility in Qatar last week might help explain his turn-the-page posture. The strike came in retaliation for an Israeli attack on Iran’s portion of a massive natural-gas field that extends into Iranian and Qatari territory, and it was more a warning shot than a full-on assault. But the effects on Qatar’s economy and global energy markets were profound, offering a glimpse of the catastrophes that might follow a broader Iranian military campaign against energy facilities across the Persian Gulf.
The damage to the Ras Laffan industrial facility, about 50 miles from the center of Doha, Qatar’s capital, reduced the country’s export capacity for liquified natural gas by 17 percent, creating a projected loss of $20 billion in annual revenue. The Qatari energy ministry says repairs will take three to five years. It took the country more than a quarter century—from the discovery of the natural-gas field off its shores to the first shipments of energy—to become the world’s third-largest LNG exporter and one of the richest nations on earth. It took Iran one night to prove that it could derail the entire enterprise and imperil Qatar’s future.
Qatar’s state-owned energy company declared force majeure with customers in Italy, Belgium, South Korea, and China, meaning it can’t fulfill its contractual obligations owing to circumstances beyond its control. Qatar already had stopped LNG production shortly after the war began, for the first time in its history. That removed about a fifth of the world’s LNG supply. A prolonged stoppage could upend Qatar’s economy, whose growth was predicated on the expansion of its side of the gas field. The pain wouldn’t be contained to Qatar. If its LNG facilities remain offline for the rest of this year, global supply will effectively revert to 2021 levels, according to Columbia University’s Center on Global Energy Policy.
Trump fired off a Truth Social post soon after the attack on Ras Laffan, insisting that the United States knew nothing about the initial Israeli strike. (Israeli officials said otherwise in press reports.) Israel would cease its attacks, he said. But if Iran hit Qatar’s facility again, Trump promised to “blow up the entirety” of Iran’s side of the gas field. On Saturday, he threatened to attack Iranian power plants if the country didn’t reopen the Strait of Hormuz by Monday evening. That ultimatum sent already-surging oil prices even higher, and after an ensuing market panic, Trump announced a five-day reprieve, in light of the talks that he claimed were bearing fruit—but that Iran has claimed aren’t even happening.
Trump’s whipsawing public comments and social-media posts have created confusion throughout the war. But this much is evident: Despite all Iran has lost, it maintains the military capability to cause a global energy crisis. If Trump hadn’t known this before, the Ras Laffan attack offered a clear demonstration.
A few days after the attack on Ras Laffan, Fatih Birol, the head of the International Energy Agency, broke the silence he had maintained since the start of the war. The global economy is now facing a “major, major threat” from the disrupted flow of oil and natural gas, Birol warned during an event in Australia on Monday. More than 40 energy facilities across nine countries have already been severely damaged, he noted, so even if the war ended this week, it could take months or years to bring supplies back to prewar levels. Birol compared the loss of oil supply from the current war to the two major energy crises in the 1970s. The loss of natural gas, he added, is equivalent to the supply shock experienced after Russia’s invasion of Ukraine in 2022. “This crisis, as things stand now, is two oil crises and one gas crisis put all together,” he said.
Countries far from the Middle East are already feeling the acute pain of shortages. Sri Lanka, Pakistan, and the Philippines announced that government employees would work only four days a week, in order to conserve electricity and gasoline. In Thailand, where Qatar accounts for more than 40 percent of LNG supply, government workers were told to cancel overseas trips and use stairs instead of elevators.
[Read: The Iran war’s next threat is to food and water]
The attack on Qatar has implications beyond the energy market. The country is one of the world’s leading producers of urea, a key component of fertilizer. With spring planting season coming in the Northern Hemisphere and fertilizer not shipping out of the Gulf, a global food crisis could be on the horizon. Qatar also provides a third of the world’s helium, a by-product of natural-gas production and a key ingredient in the manufacturing of computer chips and medical imaging equipment. Shipments of that crucial element have also ceased.
Qatar is accustomed to instability in its backyard disrupting delicate supply chains and eating into its bottom line. During the Iran-Iraq War of the 1980s, tanker ships caught in the cross fire ended up at the bottom of the Persian Gulf, which scared off potential customers. The war then deferred economic growth. But the war now is devastating it.
Iran and Qatar are linked by geology. The natural-gas field is by far the largest deposit on the planet. Qatar’s portion is approximately 2,300 square miles, about half the land area of the entire nation. That shared natural resource is a big reason why Qatar has long maintained closer relations with Iran than its neighbors—to their consternation. In 2017, four regional rivals implemented a land and air blockade of Qatar, citing comments by its emir praising Iran as a great power. (Qatari officials claim that the statements were fabricated in an elaborate computer hack. The country weathered political and economic isolation with the help of LNG exports because shipping routes remained open.)
Now that Iran has attacked Qatar, their future relationship is in doubt, and rivals have found a new reason for solidarity. Three of the four countries that blockaded Qatar—Saudi Arabia, the United Arab Emirates, and Bahrain—have also been the target of Iranian drones and missiles. (The fourth, Egypt, is further from the action.) Following the strike on Ras Laffan, Qatar expelled two senior Iranian diplomats and threatened more if Iran’s campaign continued.
[Read: The Gulf countries can’t take much more]
“There will need to be a lot of effort to reestablish the trust in the relationship with the Iranians,” Majed al-Ansari, an adviser to Qatar’s prime minister and the chief spokesperson for its foreign-affairs ministry, told me. And with that will come a new focus on deterrence, he said. Going forward, Qatar can be expected to spend much more of its wealth on air defenses, fighter planes, and other military hardware.
“We need to have very frank discussions with our security partners in the U.S. and Europe about how to reestablish this deterrence,” al-Ansari said. That’s perhaps a diplomatic way of saying that Qatar needs protection, and it really needs the Americans and the Israelis to stop giving Iran reasons to blow up the backbone of its economy.
Qatar has geared much of its foreign policy toward solving other countries’ problems, acting as a mediator in wars, territorial disputes, and hostage negotiations. It’s not a party to the current diplomatic efforts to achieve a cease-fire between Iran and the United States. But Doha is pressing both sides to find an exit.
“The longer the conflict continues, the more it harms everyone—not just in the region,” al-Ansari said. When we spoke, Trump had not yet announced his five-day reprieve on strikes against Iranian energy facilities. It expires tomorrow. After that, we’ll know better if the crisis is contained or about to get much worse.
The post The Reason Trump May Pull Back From the Brink appeared first on The Atlantic.
