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

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Iranian Revolutionary Guard intercepts two Qatar LNG ships, forcing them to turn back; the effective blockade of the Strait of Hormuz continues. Saudi Aramco raises its crude oil premium for Asian buyers to $19.50 per barrel above the regional benchmark price, setting a historical record. Goldman Sachs warns that the energy crisis has entered its third phase—impacts from costs of energy and petrochemical inputs are now fully permeating Asia’s export-oriented economies.

After being granted transit permission, two Qatar LNG ships were intercepted and forced to turn back by Iran’s Revolutionary Guard. At the same time, Saudi Aramco set a record high increase in its crude oil premium for Asian buyers. Goldman Sachs warned that the Middle East energy crisis’ impact on Asia’s supply chains is entering a crucial third phase.

According to media reports, on Monday morning, Iran’s Revolutionary Guard intercepted two Qatar liquefied natural gas vessels heading for the Strait of Hormuz and ordered them to standby where they were.

These two ships had originally been granted transit permission within an agreement framework brokered by Pakistan. If they had successfully passed, they would have been the first batch of LNG cargoes transported through the strait since Feb. 28, when the U.S.-Israel strikes on Iran were launched and the conflict erupted. Ship tracking data shows that as of Monday evening, the two vessels were still located near the coast of the United Arab Emirates and had not been able to pass through the strait.

Meanwhile, Saudi Aramco announced that the premium for its flagship “Arab Light” crude oil shipments to Asia in May will be raised to $19.50 per barrel above the regional benchmark price, setting a historical record. On the Qatar side, QatarEnergy CEO Saad al-Kaabi disclosed that the Iran attacks have damaged two of Qatar’s 14 LNG production lines and one of its two gas-to-liquids facilities, resulting in 17% of Qatar’s LNG export capacity being impaired. He expects annual losses of up to $20 billion, with the affected capacity having a shutdown period lasting three to five years.

Goldman Sachs analyst Yulia Grigsby pointed out that the transmission of this energy crisis to Asia’s supply chains is entering its third phase—rising energy and petrochemical input costs will fully permeate the product price systems of export-oriented economies in Asia.

LNG ships turned back: The Hormuz corridor remains under an effective blockade

According to media reports citing sources familiar with the matter, on Monday Iran’s Revolutionary Guard intercepted two LNG ships—“Al Daayen” and “Rasheeda”—operated by Qatar Energy, and ordered them to stop moving. The two ships had previously received transit clearance under a negotiations framework led by Pakistan, with planned destinations being China and Pakistan, respectively.

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

Previously, a Japanese LNG ship, “Sohar LNG,” had successfully passed through the strait. Its jointly owned carrier, Mitsui, confirmed this news last Friday, but the ship was empty when it transited.

The Strait of Hormuz carries about one-fifth of the world’s oil and LNG flows. Since the outbreak of the conflict, this route has effectively been in a blockade. On March 26, Trump said Iran agreed to let 10 oil tankers transit, but this LNG interception incident shows that the execution of the related agreement remains highly uncertain.

Saudi premiums set a record: Export detours via the Red Sea cost burden passed to buyers

According to price sheets obtained by Bloomberg, Saudi Aramco set the May premium for its “Arab Light” crude oil shipments to Asia at $19.50 per barrel above the regional benchmark price, the highest level in history. However, this figure is still below the $40 per barrel expectation of traders and refineries in earlier industry surveys.

Oil traders explained that the premium did not meet market expectations, partly because Middle East crude prices saw sharp volatility and a pullback in the last week of March. More importantly, Saudi Aramco has fully switched its export corridor from Ras Tanura Port in the Arabian Gulf to Yanbu Port on the Red Sea coast, while the crude oil pricing benchmark is still based on loading at Ras Tanura Port. This means buyers must bear additional transportation costs themselves.

On March 10, Amin Nasser, CEO of Aramco, said in a call that the company has paused most production of medium and heavy crude oil and is currently focusing on selling light and ultra-light crude oil through Yanbu Port. Aramco’s pipelines to the Red Sea coast have reached maximum transportation capacity of 7 million barrels per day. Currently, daily crude oil exports are about 5 million barrels, roughly 70% of total pre-war export volumes.

Since the outbreak of the conflict, Brent crude oil has risen by more than 50% in total. Saudi Arabia and the UAE are the only two oil-producing countries in the Gulf region that have important alternative export routes that can bypass the Hormuz bottleneck.

Qatar LNG hit hard: Annual loss of $20 billion, Europe-Asia supply faces a long-term gap

QatarEnergy CEO Saad al-Kaabi said that the Iranian attacks destroyed two of Qatar’s 14 LNG production trains and one of its two gas-to-liquids facilities, causing 12.8 million tons per year of LNG production capacity to shut down. The repair period is expected to be three to five years, with estimated annual losses of about $20 billion.

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

The impact of the attack also extends to other energy products: condensate oil exports are expected to fall 24%, liquefied petroleum gas down 13%, helium down 14%, and naphtha and sulfur down 6% each. al-Kaabi said, “I never, not even in my wildest dreams, thought that Qatar—and the entire region—would face such an attack, especially from a Muslim Brotherhood country, and during Ramadan.”

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

The destruction from this round of fighting has spread to energy infrastructure across multiple Gulf countries.

Kuwait Oil Company (KPC) reported that Iranian drone attacks caused “serious material losses” to its facilities. The targets included relevant facilities of Kuwait National Petroleum Company (KNPC) and Petrochemical Industries Company (PIC). Fires broke out in multiple locations, and emergency response teams have brought the fires under control. Previously, the Mina Abdullah and Mina Ahmadi refineries and Kuwait airport were also hit.

In the UAE, the Borouge petrochemical plant in the Abu Dhabi Ruwais Industrial City was forced to temporarily shut down after Sunday’s fires were triggered by debris from intercepted airstrikes. Borouge is a joint venture between Abu Dhabi National Oil Company (ADNOC) and Borealis, with nominal capacity of about 5 million tons per year of polyolefin products. Two days earlier, the Habshan gas processing facility—gas assets of the largest gas processing facility in Abu Dhabi—was also forced to shut down due to a fire. Bahrain National Oil Company Bapco Energies also reported that an Iranian drone attack hit a storage facility and triggered a fire, which has now been extinguished.

Hours before the above attacks occurred, Iran’s semi-official Fars News Agency released a “target list” that included power, water, steam facilities, as well as oil, natural gas, and petrochemical assets. PIC was also on the list.

Goldman Sachs warning: Asia supply-chain shocks enter the third stage

According to Goldman Sachs analyst Yulia Grigsby’s analysis, the shock to global supply chains from this Middle East energy crisis follows three escalating phases.

The first phase is the disruption of Middle East oil exports, which had already occurred at the very beginning of the conflict. The second phase is the contraction of import volumes in key markets—this became apparent in the second half of March as tankers departing from the Middle East arrived at their destinations one after another in late February.

The crisis is now entering the third phase: rising energy and petrochemical input costs (including plastics, etc.) will gradually be transmitted into a range of global commodity price systems dominated by Asia’s export-oriented economies.

Goldman Sachs’ analysis suggests that the impact of this shock will spread from energy markets to broader areas of manufacturing and consumer goods, creating systemic pressure for Asian economies deeply embedded in global supply chains. Although Iraq has already received a waiver from Iran and notified Asian buyers that loading can resume, buyers are still seeking further confirmation of the transit security assurance terms. Near-term market uncertainty is unlikely to dissipate.

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Editor-in-charge: Lingchen