Qatar's finance ministry announced on social media platform X that the country recorded its largest quarterly budget deficit in nearly a decade, as natural gas revenues were nearly wiped out by the effective closure of the Strait of Hormuz amid the US-Iran conflict.

The Gulf state's budget deficit for the second quarter reached 21.2 billion Qatari riyals (approximately $5.8 billion), the highest level since late 2016 and nearly double the 10.3 billion riyals deficit recorded in the previous quarter.

Before the war broke out at the end of February and Iran imposed the blockade, Qatar accounted for one-fifth of global liquefied natural gas (LNG) exports. Following the outbreak of hostilities, the nation's energy revenues experienced a precipitous decline.

The country's LNG shipments plummeted from roughly 20 million tonnes per quarter in the same period last year to fewer than 2 million tonnes between April and June 2026.

Where the economy stands now

Unlike Saudi Arabia and the United Arab Emirates, Qatar lacks alternative shipping routes that bypass the Strait of Hormuz, leaving its vessels unable to deliver gas to international buyers, most of whom are located in Asia.

The nation has also frequently come under attack from Iranian drones and missiles, incurring billions of dollars in damages. In March, a drone strike forced QatarEnergy to shut down its main Ras Laffan export facility, marking the first such halt in the plant's nearly 30-year operating history.

Having built its wealth on natural gas sales, Qatar was once among the world's richest nations. The International Monetary Fund now projects the country's economy will contract by more than 8% this year.

However, non-energy revenues surged nearly fivefold between the first and second quarters, reaching 25 billion riyals, partially offsetting the losses in oil export income. Overall, Qatar's total revenues fell by approximately 30% to 25.6 billion riyals, while total expenditures declined by 2.6% to 46.9 billion riyals.