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European Energy Markets
22JUN

Qatar refuses to hedge against Hormuz

3 min read
13:56UTC

Saad al-Kaabi, Qatar's energy minister, publicly rejected US Treasury Secretary Scott Bessent's forecast that the Strait of Hormuz becomes worthless within two years. Qatar has deliberately built no bypass capacity at all, unlike Saudi Arabia and the UAE.

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Key takeaway

Qatar has no overland option for its gas, so it is betting Hormuz stays open.

Saad al-Kaabi, Qatar's energy minister and chief executive of QatarEnergy, rejected the US Treasury Secretary's forecast for the Strait of Hormuz at the Qatar Economic Forum in New York on Sunday 20 September. "I mean, maybe this is his view. I think this is completely wrong", al-Kaabi told Bloomberg, and said of the strait that "I don't think this is ever going to be obsolete"⁠1. He was answering Scott Bessent, who told an interviewer in Asheville, North Carolina on Tuesday 1 September, alongside meetings with G20 finance ministers, that "In two years, the strait of Hormuz will be like a worthless piece of water"⁠2. Bessent said in the same interview that the oil would travel overland by pipeline instead⁠3. Two allies, one chokepoint, opposite forecasts.

Each side has already spent money on its answer, which is what lifts this above a spat between officials. Saudi Arabia and the United Arab Emirates are extending Hormuz bypass capacity through Red Sea ports and overland pipelines. Qatar has deliberately declined to build any⁠4. For utilities in Japan, Korea and Europe that buy Qatari Liquefied Natural Gas on twenty-year contracts, that refusal sits in the gas price rather than in a diversified route.

Laying a bypass pipeline takes years and repays over decades, which makes this the slowest bet either government can place. A line laid for a war that ends in 2027 becomes a stranded asset with decades of repayment left on it. A chokepoint left unhedged in a war that does not end becomes a national emergency. Qatar is insuring against the war ending; Washington's Treasury is insuring against it lasting.

Bessent has one solid argument: capacity that exists on land cannot be blockaded at sea, and a mined strait carrying about 20% of the world's seaborne oil has no published clearance timetable. Drones shut Saudi Arabia's own East-West line on 10 September and it is still not at full capacity, which cuts the other way on how durable a pipeline actually is. Against Bessent sits a fact of physics rather than of strategy: no pipeline yet built or planned can move liquefied gas, because the fuel has to be chilled at a coastal terminal and lifted by a specialised carrier. Qatari cargo has no alternative loading point at any price.

Deep Analysis

In plain English

the strait of Hormuz is the narrow sea passage between Iran and Oman that a fifth of the world's oil and gas must pass through. US Treasury Secretary Scott Bessent has predicted that within two years, new overland pipelines will let oil producers bypass the strait entirely, making it commercially worthless. Qatar's energy minister, Saad al-Kaabi, told Bloomberg at the Qatar Economic Forum on 20 September that he thinks Bessent's forecast is completely wrong. The disagreement matters because Qatar has no such bypass pipeline of its own and has chosen not to build one, betting instead that the strait will remain essential. If Bessent is right, that bet could leave Qatar's gas exports stranded; if al-Kaabi is right, the huge cost of building an alternative route would have been wasted money anyway.

Deep Analysis
Root Causes

Qatar's exposure runs deeper than any other Gulf LNG exporter's because QatarEnergy, supplying roughly a fifth of world LNG, has no alternative export corridor: unlike Saudi Arabia's East-West Petroline or the UAE's Fujairah pipeline bypass, Qatar's North Field gas has no land route to the Mediterranean or Red Sea, so every cargo must transit Hormuz regardless of conflict risk.

Al-Kaabi's public rejection of Bessent's bypass-pipeline forecast follows from that dependency: Qatar has had years to build alternative capacity and chose not to, leaving two possibilities. Either al-Kaabi's technical read is correct that no viable bypass route exists for Qatari gas, or Doha has placed a bet it cannot economically hedge even if the forecast proves right.

What could happen next?
  • Risk

    Qatar's decision not to build bypass pipeline capacity leaves its entire LNG export model, roughly a fifth of world supply, dependent on Hormuz remaining navigable for the foreseeable future.

Sources:Bloomberg·Anadolu Ajansi·Anadolu Ajansi
Mentions:Saad al-Kaabi →QatarEnergy →Scott Bessent →Saudi Arabia →Qatar →Strait of Hormuz →Japan →Washington →Tbilisi →Mediterranean →New York →North Carolina →Ceyhan →Bosphorus →Suez Canal →Bloomberg →Red Sea →Emirates →Iran →Oman →US Treasury →United Arab Emirates (UAE) →
First Reported In

Update #179 · Russia and China kill Iran's UN monitor

Bloomberg· 21 Sept 2026
Read original →
Causes and effects
This Event
Qatar refuses to hedge against Hormuz
The world's largest exporter of liquefied natural gas has staked its entire export route on a chokepoint Washington's Treasury has publicly written off.
Led to
Qatar brings the US answer to Araghchi
Qatar had already rejected the forecast that Hormuz becomes worthless, and then carried both the Iranian plan and the American answer.
Occurred 29 Sept 2026
Read story →
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Written with AI from Lowdown's published reporting. Not individually reviewed by an editor. Editorial standards.