The first LNG ship “failed” to pass through the Strait of Hormuz; Saudi Arabia has significantly raised oil prices in Asia; Goldman Sachs predicts that the “Asian supply chain disruption” will enter a new phase

Two Qatar LNG vessels were intercepted by Iran’s Islamic Revolutionary Guard Corps after being cleared to transit and were forced to turn back. Saudi Aramco simultaneously raised its crude oil premiums to Asian buyers to a record level, and Goldman warned that the Middle East energy crisis’ impact on Asian supply chains is entering a critical third stage.

According to media reports, on Monday morning, the Islamic Revolutionary Guard Corps intercepted two Qatari liquefied natural gas vessels traveling toward the Strait of Hormuz and ordered them to remain where they were.

The two ships had originally been granted transit permission under a deal framework brokered by Pakistan; if they succeeded in passing, they would have been the first LNG cargoes shipped through the strait since the Feb 28 U.S.-Israel strikes against Iran and the outbreak of the conflict. Vessel-tracking data shows that as of Monday evening, both ships remain in waters near the coast of the United Arab Emirates and have not been able to pass through the strait.

Meanwhile, Saudi Aramco said it would raise the premium on its flagship “Arab Light” crude oil for Asia-bound shipments in May to $19.50 per barrel above the regional benchmark price, setting a historical record. On Qatar’s side, QatarEnergy CEO Saad al-Kaabi disclosed that Iran’s attack has damaged two of the 14 LNG production lines in Qatar and one of the two gas-to-liquids facilities, resulting in LNG production capacity of 8B tons per year being shut down. The repair period is expected to last three to five years, with estimated annual losses of $20 billion, and the shutdown of the relevant capacity will last for three to five years.

Goldman analyst Yulia Grigsby also pointed out that the transmission of this energy crisis to Asian supply chains is entering the third stage—rising energy and petrochemical feedstock costs will fully permeate the product price systems of a range of Asia-led export-oriented economies.

LNG ships turn back: the Hormuz corridor remains effectively blockaded

Citing sources, media reported that on Monday, Iran’s Islamic Revolutionary Guard Corps intercepted two LNG vessels, “Al Daayen” and “Rasheeda,” owned by Qatar Energy, and ordered them to stop moving forward. The two ships had previously obtained transit clearance under a negotiation framework led by Pakistan, with their intended destinations being China and Pakistan, respectively.

Vessel-tracking data shows that after changing course, “Al Daayen” began switching its destination signal back to Qatar Ras Laffan Port, while “Rasheeda” switched to “standby.” Both ships completed loading at Ras Laffan Port in late February, and the cargoes have been stuck for more than five weeks during the blockade of the strait.

Previously, a Japanese LNG carrier, the “Sohar LNG,” had successfully passed through the strait. Its joint shipowner, Mitsui, confirmed this news on Friday last week, but when the vessel transited, it was in an unloaded (ballast) state.

The Strait of Hormuz carries about one-fifth of global oil and LNG flows. Since the outbreak of the conflict, the route has effectively been under blockade. On March 26, Trump said Iran had agreed to allow 10 oil tankers to transit, but the incident involving the LNG vessels being intercepted indicates that the execution of the relevant accord remains highly uncertain.

Saudi premiums set records: rerouting exports via the Red Sea shifts costs to buyers

Based on price sheets obtained by Bloomberg, Saudi Aramco set the premium on its May “Arab Light” crude oil shipments to Asia at $19.50 per barrel above the regional benchmark price, the highest level on record. However, the figure still falls below the $40 per barrel traders and refiners had been expecting in previous broker surveys.

Oil traders said the premium did not meet market expectations, partly because Middle East crude prices saw sharp volatility in the last week of March and then eased back. More importantly, Saudi Aramco has currently fully switched its export channel from Ras Tanura Port in the Arabian Gulf to Yanbu Port along the Red Sea coast, while the crude oil pricing benchmark is still based on cargo loading at Ras Tanura Port—meaning buyers must bear the additional transportation costs themselves.

In a March 10 earnings call, Aramco CEO Amin Nasser said the company has paused most medium and heavy crude oil production and is focusing on selling light and condensate/super-light crude oil through Yanbu Port. Aramco’s pipelines to the Red Sea coast have reached maximum transport capacity of 7 million barrels per day; currently, average daily crude exports are about 5 million barrels, or roughly 70% of total exports before the war.

Since the outbreak of the conflict, Brent crude has risen by more than 50% in total. Saudi Arabia and the United Arab Emirates are the only two oil-producing countries in the Gulf region that have major alternative export routes capable of bypassing the Hormuz bottleneck.

Qatar LNG hit hard: $20 billion in annual losses; long-term gap for supply to Europe and Asia

QatarEnergy CEO Saad al-Kaabi said Iran’s attack destroyed two of the 14 LNG production lines in Qatar and one of the two gas-to-liquids facilities, resulting in the shutdown of LNG production capacity of 12.8 million tons per year. The repair timeline is expected to be three to five years, and annual losses are estimated at $20 billion.

Qatar is the world’s second-largest LNG exporter, with target markets for exports mainly concentrated in Asia. QatarEnergy may be forced to declare force majeure on long-term contracts for shipments to Italy, Belgium, South Korea, and China, with terms of up to five years. U.S. oil major ExxonMobil is a partner for the damaged facilities, holding 34% equity in the “S4” production line and 30% equity in the “S6” production line.

The impact of the attack also extends to other energy products: condensate oil exports are expected to fall by 24%, liquefied petroleum gas by 13%, and helium by 14%, while naphtha and sulfur each decline by 6%. al-Kaabi said, “I never thought Qatar—and the entire region—would suffer such an attack, especially from a Muslim brother country, and especially during Ramadan.”

Surrounding facilities damaged: Kuwait, the UAE, and Bahrain hit in succession

The scope of disruption from this round of hostilities has spread to energy infrastructure across multiple Gulf countries.

Kuwait Petroleum Corporation (KPC) reported that Iran drone attacks caused “significant material losses” to its facilities, with targets including related facilities of Kuwait National Petroleum Company (KNPC) and Petrochemical Industries Company (PIC). Multiple fires broke out, and emergency response teams have brought the fires under control. Previously, the Mina Al Ahmadi and Mina Abdullah refineries, as well as Kuwait International Airport, were also hit.

In the UAE, the Borouge petrochemical plant in the Abu Dhabi Ruwais Industrial City caught fire on Sunday due to debris from intercepted airstrikes, forcing it to temporarily shut down. Borouge is a joint venture established by Abu Dhabi National Oil Company (ADNOC) and Borealis, with nominal capacity of about 5 million tons of polyolefin products per year. Two days earlier, the Hasbshan Gas facilities at Abu Dhabi’s largest natural gas processing plant were also forced to stop production due to a fire. Bahrain’s national oil company Bapco Energies also reported that an Iranian drone attack hit a storage facility and caused a fire, which has now been extinguished.

Hours before the aforementioned attacks, the Iranian semi-official news agency Fars News Agency published a “target list” that included power, water, and steam facilities, as well as oil, natural gas, and petrochemical assets; PIC was also on the list.

Goldman warning: Asian supply chain impact enters the third stage

According to Goldman analyst Yulia Grigsby’s analysis, the impact of this Middle East energy crisis on global supply chains follows three escalating stages.

The first stage is an interruption in Middle East oil exports, which already occurred in the initial period after the outbreak of the conflict. The second stage is a contraction in imports in key markets— as tankers arriving at their destinations continue to steam in from the Middle East starting in late February, this stage began to show in the second half of March.

At present, the crisis is entering the third stage: rising energy and petrochemical feedstock costs (including plastics, etc.) will gradually be passed through to a range of global commodity price systems dominated by Asia’s export-oriented economies.

Goldman’s analysis suggests that the effects of this disruption will spread from energy markets to a broader range of manufacturing and consumer goods sectors, creating systemic pressure on Asian economies deeply embedded in global supply chains. Although Iraq has obtained an Iranian exemption and notified Asian buyers that loading can be resumed, buyers are still seeking further confirmation of transit safety assurance provisions, and market uncertainty is unlikely to dissipate in the near term.

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