Iran strikes Gulf energy facilities, shock waves hit global economy, Pg1

Key Highlights:

• Iran attacked oil and natural gas facilities in the Gulf in retaliation for an Israeli attack on its South Pars gas field.
• Brent crude oil prices increased to over $119 a barrel, a 60% increase since the start of the war between Israel and the US.
• Iranian attacks have disrupted 17% of Qatar's LNG export capacity, resulting in an estimated $20 billion in lost annual revenue.
• QatarEnergy declared force majeure on long-term contracts for LNG supplies to Italy, Belgium, South Korea, and China.

Detailed Insights:

• The attacks included setting a vessel ablaze off the coast of the UAE and damaging another off Qatar, highlighting the danger to ships in the region.
• A Saudi refinery on the Red Sea, intended as an alternative exit route to bypass the Strait of Hormuz, was hit by an Iranian drone.
• Two of Qatar's 14 LNG trains and one of its two gas-to-liquids (GTL) facilities were damaged, sidelining 12.8 million tons per year of LNG for 3-5 years.
• ExxonMobil holds a 34% stake in LNG train S4 and a 30% stake in train S6, while Shell is a partner in the damaged GTL facility, which will take up to a year to repair.

Key Concepts Involved:

• LNG (Liquefied Natural Gas): Natural gas converted to liquid form for ease of storage and transportation.
• Force Majeure: A clause in contracts that frees parties from liability due to extraordinary events.
• Strait of Hormuz: A narrow waterway between Oman and Iran connecting the Persian Gulf to the Gulf of Oman and the Arabian Sea.