Iran Conflict Hits Qatar’s Budget

According to the Financial Times, Qatar has reduced its government department budgets by 30% and foreign aid allocations by around 85% amid the growing financial impact of the ongoing conflict in Iran.

Strikes on Ras Laffan, the world’s largest center for liquefied natural gas (LNG) production and export, have cut Qatar’s export capacity by 17%, while disruptions in the Strait of Hormuz have created additional hurdles for energy supply.

Estimates indicate that full recovery of the damaged LNG infrastructure could take 3 to 5 years. The IMF predicts an 8.6% contraction of Qatar's economy by 2026.

According to some calculations, Qatar and Kuwait are losing energy revenues of $1.5 to $2 billion weekly. To maintain liquidity, Doha is tapping into its financial reserves, including a sovereign fund worth about $500 billion. Should the crisis persist until the end of the year, the authorities are considering further spending cuts.