Force Majeure Ignites Energy Markets Amid War .. When Will This Commercial Law Be Activated?

Several Gulf energy companies announced the activation of force majeure following the outbreak of the American-Israeli-Iranian war on February 28, 2026, due to attacks on production facilities and increased security risks. This step temporarily exempts companies from contractual obligations without financial penalties, but it has triggered a wave of disruptions in global oil and gas markets.

What is force majeure?

Force majeure in commercial and international law refers to an unexpected and unforeseen event that prevents a party from fulfilling its obligations, such as wars or natural disasters. The law stipulates three conditions for its activation: the event must be beyond control, unforeseen, and lead to the impossibility of fulfilling obligations.

Historical Milestones for Activating Force Majeure

Force majeure was widely used during the COVID-19 pandemic to postpone delivery dates and mitigate legal liability for companies. It was also applied in Libya and Sudan to suspend oil production due to political crises and local wars, reflecting its importance in protecting economies and energy.

Impact on Global Prices

Activating force majeure immediately raises energy prices. Following Qatar Energy's announcement to halt liquefied natural gas production, prices surged by 40% in Asia and over 30% in Europe. Officials predicted that continued collective stoppages could push oil prices to $150 per barrel, with significant implications for the global economy.

Force Majeure as an Economic Indicator

The declaration of force majeure not only reflects production disruptions but also serves as an indicator of tension in global energy markets and the ability of wars and crises to shift the balance of the international economy, making its monitoring essential for both investors and governments alike.