Qatar cuts state spending as economy contracts due to US-Iran conflict

Qatar built one of the world’s most enviable fiscal positions on a single bet: that the world would always need its liquefied natural gas. That bet is looking shaky in 2026. Iranian strikes on the Ras Laffan LNG complex in mid-March, combined with a blockade of the Strait of Hormuz, have delivered the kind of economic shock that no sovereign wealth fund can fully absorb. The disruptions cut Qatar’s LNG export capacity by roughly 17%, a figure that translates to annual revenue losses of approximately $20 billion. The damage in numbers Qatar’s Q1 2026 budget deficit came in at QR10.3 billion, equivalent to $2.83 billion, after revenues fell 23.5% year-over-year. For context, that deficit is more than 20 times larger than the same period a year earlier. Expenditure cuts helped at the margins, but only just. Operating expenditures fell 3.7%, which, against a near-quarter revenue collapse, is a little like bailing out a flooding boat with a coffee cup. LNG exports dropped roughly 33% year-over-year in the first quarter, a contraction severe enough to rattle global energy markets that had grown accustomed to Qatar as one of the world’s most reliable suppliers. To plug the gap, the Qatari...