Fitch Ratings expects Qatar’s economy to contract by 18.8% in 2026, as disruptions to shipping through the Strait of Hormuz weigh heavily on the country’s liquefied natural gas (LNG) production and exports.
The sharp downturn reflects Qatar’s heavy dependence on the strategic waterway for energy exports. The disruption has significantly reduced the number of LNG cargoes able to leave the country, putting pressure on one of the main pillars of the Qatari economy.
LNG exports hit by Strait of Hormuz disruption
Fitch said Qatar’s ability to export LNG has been severely disrupted since the war began, with only a limited number of gas shipments passing through the Strait of Hormuz.
The impact is particularly significant because Qatar is one of the world’s largest LNG exporters. According to the International Energy Agency, around 93% of Qatar’s LNG exports transit the Strait of Hormuz, making the country especially vulnerable to prolonged disruption of the waterway.
The disruption has also contributed to a broader shock in global natural gas markets. The IEA estimates that LNG flows from Qatar and the United Arab Emirates have fallen by more than 300 million cubic metres per day since the beginning of March.
Strong recovery expected in 2027
Despite the severe contraction forecast for 2026, Fitch expects Qatar’s economy to rebound strongly from 2027 if LNG exports through the Strait resume.
The agency assumes an agreement will allow exports to restart during the first quarter of 2027, followed by a gradual recovery in shipments. Fitch estimates that returning gas flows to pre-war levels could take around six months.
The recovery would also be supported by Qatar’s plans to expand LNG production capacity, potentially providing a significant boost to economic growth once export routes normalize.
Fiscal pressures are increasing
The disruption to energy exports is also expected to put pressure on Qatar’s public finances.
Lower LNG production and exports would reduce government revenues while increasing the fiscal deficit and government debt. Nevertheless, Qatar enters the crisis with substantial financial strength and large energy reserves, which could help cushion the impact of the downturn.
The scale of the shock highlights the strategic importance of the Strait of Hormuz to Qatar. Unlike oil producers with some alternative export routes, Qatar has very limited options for moving its LNG to international markets without using the Strait. The IEA says there are currently no alternative routes capable of replacing Qatar’s LNG exports through existing infrastructure.
A sharp downturn followed by a potential rebound
Fitch’s forecast illustrates how quickly a disruption to a major energy chokepoint can affect an LNG-dependent economy.
If the Strait of Hormuz reopens and Qatar is able to gradually restore LNG shipments, the country could move from an 18.8% contraction in 2026 to a strong recovery in 2027.
For global energy markets, however, the disruption remains significant. Qatar and the UAE together account for almost one-fifth of global LNG trade, meaning prolonged restrictions on their exports can continue to affect gas prices and competition for supplies in Europe and Asia.
