FORCE MAJEURE IN THE GULF: COMPARATIVE INSIGHTS FROM QATAR, THE UAE, AND OMAN

QatarEnergy declared force majeure on 4 March 2026, halting LNG production and notifying affected buyers. This was followed by Kuwait Petroleum Corporation on 7 March 2026, citing severe disruption to regional oil shipments, and by Bapco Energies on 9 March 2026, after a direct strike on its refinery forced operational shutdowns.

The disruption rapidly cascaded downstream, giving rise to a chain reaction of force majeure across contractual networks. Shell, for instance, declared force majeure to its LNG customers on or around 10–11 March 2026 following the loss of access to Qatari cargoes. Industrial and trading entities, including Norsk Hydro (via Qatalum), Aluminium Bahrain (Alba), and Oman’s OQ, were likewise compelled to reduce production due to curtailed gas supply and supply chain breakdowns.

Taken together, these developments reflect a systemic, multi-layered force majeure scenario in which upstream geopolitical shocks have translated into widespread contractual non-performance across sectors.

It is not uncommon for contracts relating to energy extraction, particularly those concluded with state entities, to be governed by the applicable domestic law. In this context, it is of critical importance to develop a precise understanding of the relevant legal standards, as they will fundamentally shape the interpretation of contractual obligations and the availability of remedies.

Under Qatari law, force majeure is codified and operates through a structured Civil Code framework. Importantly, Article 258 permits parties to contract out of its effects, including by maintaining liability notwithstanding force majeure or unforeseen circumstances.

The Civil Code draws a critical distinction between unilateral and bilateral contracts. In contracts imposing obligations on one party only, Article 187(1) defines force majeure as an external event beyond the obligor’s control rendering performance impossible. In such cases, the obligation is extinguished automatically and the contract terminates by operation of law. Where impossibility is partial, however, the obligor remains bound to perform the remainder.

In bilateral contracts, Article 188(1) provides that where performance becomes impossible due to an external cause, the contract is rescinded ipso facto. The Qatari Court of Cassation has made clear that this remedy is available only where the impossibility reaches the level of “absolute impossibility to perform,” thereby confirming the high threshold required for force majeure.

The case law underscores a strict and disciplined approach holding that impossibility beyond the control of the obligor arises where the event in question is unpredictable and impossible to avoid and the implementation of the commitment under the contract was impossible for everyone in the debtor's position.

Regulatory prohibitions that render performance objectively impossible have been recognised as force majeure. By contrast, economic crises or market disruptions, even if severe, are treated as foreseeable risks and do not suffice. The regime therefore draws a clear line between true impossibility and mere hardship.

Finally, the Qatari regime carefully distinguishes between total and partial impossibility, as well as between rescission and termination. Where impossibility is partial, the obligee may elect either to enforce the contract to the extent performance remains possible or to seek termination. This applies across both unilateral and bilateral contracts.

The UAE Civil Code largely mirrors the Qatari framework. Article 273 provides that, in bilateral contracts, force majeure resulting in impossibility extinguishes the obligation and automatically terminates the contract. Partial impossibility discharges only the affected portion, while temporary impossibility suspends performance in continuing contracts. In both cases, the obligor may seek termination subject to notice.

The Dubai Court of Cassation has adopted a stringent test: force majeure must be unforeseeable, unavoidable, and of a public nature. This sits alongside Article 249, which governs hardship and permits judicial intervention where performance, although still possible, becomes excessively onerous due to exceptional and unforeseeable events. In such cases, the court may rebalance the contract, and any agreement excluding this power is void.

In practice, UAE courts apply these doctrines restrictively. Claims based on economic downturns, market volatility, or administrative delays have been consistently rejected as foreseeable commercial risks. Even regional instability, such as border closures linked to military activity has, in certain cases, been deemed insufficiently unforeseeable to qualify as force majeure. The threshold remains firmly anchored in strict impossibility rather than commercial impracticability.

Omani law codifies force majeure and hardship under Articles 172 and 159 of the Civil Code, respectively.

Article 172 provides that where performance becomes impossible due to force majeure, the corresponding obligation is extinguished and the contract is automatically terminated. Partial or temporary impossibility, particularly in continuing contracts, results in discharge of the affected obligation, with a right for the obligor to terminate upon notice.

Article 159 addresses hardship, allowing courts to adjust obligations where unforeseen and exceptional circumstances render performance excessively onerous, though not impossible. This judicial power is mandatory and cannot be excluded by agreement.

Unlike some neighbouring regimes, Article 172 does not define “impossibility.” Omani courts have therefore clarified that force majeure requires an event that is both unforeseeable and unavoidable, arising after contract formation and before its expiry.

Notably, Omani jurisprudence imposes clear limits on contractual freedom in this area. In a leading case, the court rejected a clause that expanded force majeure to include additional conditions and enumerated events. It held that force majeure is confined to the statutory standard of unforeseeability and unavoidability, rendering broader contractual definitions invalid. The court further confirmed that the relevant event must occur within the life of the contract.

A critical question arises as to whether the present disruption genuinely meets the threshold of unforeseeability. Prior to the current escalation, Iran had explicitly signalled its willingness to target regional energy infrastructure and disrupt maritime transit, including threats to effectively close the Strait of Hormuz—a chokepoint through which roughly 20% of global oil and LNG flows .

In parallel, the conflict strategy itself was designed to disrupt global energy markets and shipping routes.

Against this backdrop, counterparties may argue that the resulting disruption, while severe, was not wholly unforeseeable, particularly for sophisticated commercial actors operating in the region. This raises a material litigation risk: if courts characterise the events as foreseeable geopolitical risk rather than exceptional force majeure relief may be denied, shifting the analysis toward hardship, renegotiation, or contractual liability.

Accordingly, the availability of remedies will turn not only on the severity of the disruption, but on whether parties can demonstrate that the specific impediment to performance was both unforeseeable and unavoidable in concreto, rather than part of a known and escalating risk landscape.