Qatar LNG Exports Disrupted, Northeast Asian Prices Double

Attacks by Iran have suspended 17% of Qatar's liquefied natural gas (LNG) export capacity, causing the JKM price, the benchmark for Northeast Asian LNG, to more than double from pre-war levels. This development has raised alarms over energy supply and demand, increasing market anxiety.

The CEO of QatarEnergy has signaled a halt in production amounting to 12.8 million tons annually for the next three to five years. He also raised the possibility of declaring 'force majeure' for up to five years on long-term supply agreements with nations including South Korea.

The paralysis of 17% of Qatar's LNG export capacity due to Iranian attacks has amplified South Korea's energy supply and demand concerns. Last year, LNG from Qatar represented 14.9% of South Korea's total LNG imports, and accounted for about 20% of its long-term contracted volumes.

IMF First Deputy Managing Director Kenji Tanaka stated that a prolonged Middle East conflict could negatively impact the global economic growth trajectory and inflation. The IMF will reflect the Middle East situation in its World Economic Outlook (WEO) scheduled for release in April.

The won-dollar exchange rate closed above 1,500 won for the second consecutive day. The yield on 3-year government bonds closed at 3.410% per annum, and the yield on 10-year bonds closed at 3.736% per annum.

Deputy Prime Minister and Minister of Economy and Finance Gu Yoon-cheol met with IMF First Deputy Managing Director Kenji Tanaka on the 19th. The South Korean government is operating an emergency response system, including a cap on oil product prices and preparations for a supplementary budget.