The cycle started this week with Qatar ceasing most of its liquefied natural gas output. Then Iraq and Kuwait began shutting down production from their oilfields. The United Arab Emirates and Saudi Arabia may soon follow suit.
It’s not because these oil and gas fields are under military threat (though some of them may be). The problem is the effective closure of the Strait of Hormuz because of the war in Iran. The tightening of that chokepoint gives many of the Gulf energy producers few export outlets for their barrels. That sets off a chain reaction—with domestic storage filling up and then forcing the shuttering of production.
