LNG exports plunge by 90%: Qatar’s quarterly fiscal deficit hits nearly a ten-year high, with economic contraction expected to exceed 8% this year

The Qatari Ministry of Finance stated on social platform X that due to the effective blockade of the Strait of Hormuz as a result of the US-Iran conflict, the country’s natural gas revenues have almost evaporated, leading to its largest quarterly budget deficit in nearly a decade.

Qatar recorded a second-quarter budget deficit of 21.2 billion riyals (about $5.8 billion), the highest since the end of 2016 and nearly double the previous quarter’s deficit of 10.3 billion riyals.

Before the outbreak of war at the end of February and Iran’s blockade of the strait, Qatar’s liquefied natural gas (LNG) exports accounted for one-fifth of the global total. After the war began, the country’s energy revenues experienced a steep plunge.

This Gulf nation’s LNG export volume plummeted from about 20 million tons per quarter in the same period last year to less than 2 million tons during April to June 2026.

Export routes blocked, facing over 8% economic contraction this year

Unlike Saudi Arabia and the UAE, Qatar has no alternative shipping routes to bypass the Strait of Hormuz. This has prevented its vessels from delivering natural gas to international buyers, most of whom are based in Asia.

The country has also frequently become a target of Iranian drone and missile attacks, causing losses of billions of dollars. In March this year, a drone attack forced QatarEnergy to shut down its main Ras Laffan export plant—the first such shutdown in nearly 30 years of the facility’s operations.

Thanks to natural gas sales, Qatar was once among the richest countries in the world. According to the International Monetary Fund (IMF), the country’s economy will face a contraction of more than 8% this year.

However, non-energy revenues grew nearly fivefold between the first and second quarters, reaching 25 billion riyals, partially offsetting the loss of oil export income. Overall, Qatar’s total revenue fell by about 30% to 25.6 billion riyals, while total expenditure dropped 2.6% to 46.9 billion riyals.