When Iranian missiles pounded into Qatar’s Ras Laffan gas plant, it wasn’t just the energy infrastructure that went up in flames.
The attack also blew up the global gas market and incinerated Qatar’s own economic prospects. If Donald Trump and the Tehran regime don’t strike a peace deal soon, the tiny Gulf monarchy may tumble into an economic crater.
On a map, Qatar appears as little more than a 4,500-sq-mile thumb of desert sand jutting into the Gulf.
But if economic malaise takes hold there, it could send shock waves through Britain.
Qatar’s deep entanglements in the UK – ranging from luxury hotels and trophy towers to energy supplies, household-name retailers and extensive arms dealing – could all feel the impact.
The emirate has at least £40bn invested in Britain, with some estimates putting the figure closer to £100bn if property owned by wealthy Qataris is included.
With war raging in the Middle East, questions are mounting about Qatar’s plans for its mountain of cash locked up in Britain – and the potential fallout for the UK’s businesses and economy.
The emirate of 3.1 million people, of whom only about 360,000 are native Qataris, has experienced tough times before.
Between 2017 and 2020, its neighbours Saudi Arabia and the United Arab Emirates blockaded the country as diplomatic relations soured, and a tough Covid lockdown came straight after.
But throughout all that, Qatar kept pumping out the liquefied natural gas (LNG) that fuels its economy and fills the public coffers.
This time it’s different.
“This is conspicuously worse than anything that any of the Gulf monarchies have experienced since 1990. The blockade was not good, but it wasn’t this bad,” says David Roberts, a Middle East expert at King’s College London.
Qatar has been left reeling from Iran’s blockade of the Strait of Hormuz.
The narrow waterway is the only means for the country, the world’s third largest gas exporter, to get its product to the outside world. One fifth of the planet’s gas is shipped out that way.
Hydrocarbons account for about two thirds of the Qatari economy and up to 80pc of government revenue. All this is in limbo until Tehran loosens its grip on the Strait of Hormuz, or Trump prises it open.
On top of this came the Iranian attack on Ras Laffan. Iran and Qatar have a relatively cordial relationship, and Qatar has been spared the kind of missile and drone barrage inflicted on the United Arab Emirates and Saudi Arabia.
But Tehran needed a like-for-like retaliation for Israel’s bombing of Iran’s huge South Pars gas field. So it hit the global gas industry where it hurts.
The attacks took out 17pc of Qatar’s LNG export capacity, and also dented production of condensate, liquefied petroleum gas, helium, naphtha and sulphur.
In an unusual but probably tactical display of transparency and candour, QatarEnergy boss Saad al-Kaabi put the damage at $20bn (£15bn) in lost annual revenue.
Repairing the damage could take three to five years, he said, and Qatar’s plan to double its gas output in the next five years has been delayed by at least a year.
Kaabi said the scale of the damage had set the region back by a decade or more.
“I never in my wildest dreams would have thought that Qatar would be ... in such an attack, especially from a brotherly Muslim country in the month of Ramadan,” he told Reuters.
In the past week, QatarEnergy declared force majeure on long-term contracts for up to five years for LNG shipments bound for Italy, Belgium, South Korea and China.
Farouk Soussa, a Goldman Sachs economist, has forecast that if Hormuz reopens soon, the hit to Qatar’s economy this year may be no more than 5pc.
But if the conflict drags on, Qatar faces a much worse fate. Its gross domestic product could shrivel by 14pc this year.
“For many Gulf economies, the war could have a bigger near-term impact than Covid,” Soussa wrote.
“When the dust settles they will rebuild and they will recover, but the scars this conflict leaves on confidence remain to be seen.”
Kaabi could only agree. His country had a reputation as “a safe haven for a lot of people”, he said. “That image, I think, has been shaken.”
Schoolchildren will be back in the class in Qatar on Sunday as schools reopen, a move ministers hope will signal a return to normality.
The country is desperate to maintain its business-as-usual image – of an economy and society sitting safely under state-of-the-art missile defences.
“The threat has been eliminated and the situation has returned to normal,” the interior ministry said in a statement on Friday.
But take a look at the Facebook groups for British expats in Doha, the Qatari capital, and Kaabi’s concerns of Qatar’s fading reputation as a safe haven are becoming a reality.
Qatar has only received a fraction of the Iranian attacks endured by its neighbours. Whereas the UAE has suffered 2,213 missiles and drones, the Saudis 816, and Kuwait and Bahrain 500-plus, Qatar has seen just 276. Most of these attacks were repelled.
