LNG exports plummet by 90%: Qatar's quarterly fiscal deficit hits near-decade high, economic contraction may exceed 8% this year.

Qatar's Ministry of Finance stated on the social media platform X that the country recorded its largest quarterly budget deficit in nearly a decade, as the conflict between the US and Iran effectively blocked the Strait of Hormuz, resulting in the near-complete loss of natural gas revenue.

Qatar's budget deficit reached 21.2 billion riyals (about US$5.8 billion) in the second quarter, the highest level since the end of 2016, almost double that of the previous quarter (the deficit was 10.3 billion riyals).

Before the outbreak of war in late February and Iran's blockade of the Strait of Hormuz, Qatar accounted for one-fifth of global liquefied natural gas (LNG) exports. After the war began, the country's energy revenues plummeted.

The Gulf state’s LNG exports plummeted from about 20 million tons per quarter in the same period last year to less than 2 million tons in the period from April to June 2026.

With export channels blocked, the economy faces a contraction of over 8% this year.

Unlike Saudi Arabia and the UAE, Qatar has no alternative shipping routes that bypass the Strait of Hormuz, which prevents its ships from delivering natural gas to international buyers, most of whom are located in Asia.

The country has also been a frequent target of Iranian drone and missile attacks, causing billions of dollars in damage. In March of this year, a drone attack forced Qatar Energy to shut down its main export plant in Ras Laffan, marking the first shutdown in the plant's nearly 30-year history.

Qatar was once one of the world's richest countries, thanks to its natural gas sales. However, the International Monetary Fund (IMF) predicts that the country's economy will contract by more than 8% this year.

However, non-energy revenues increased nearly fivefold between the first and second quarters, reaching 25 billion riyals, which partially offset the loss of oil export revenues. Overall, Qatar's total revenues fell by about 30% to 25.6 billion riyals, while total expenditures decreased by 2.6% to 46.9 billion riyals.

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