Even after the Strait of Hormuz reopens, Middle East LNG exporters face years of complex contractual disputes over missed deliveries, with ripple effects on cargo programming potentially stretching into 2027 and beyond. Bracewell’s Patricia Tiller explained how standard contract language will govern the order in which missed volumes are restored and how future risk will affect the use of force majeure clauses.
“Most LNG SPAs contain an ‘attribution’ clause prioritizing base contractual volumes (the annual contract quantity), followed by make-up volumes, force majeure restoration volumes and upward flexibility volumes, usually in that order,” Tiller told S&P Global Energy Platts.
Tiller added, “New LNG SPAs involving deliveries exposed to potential closure of the Strait of Hormuz would potentially exclude that event from the definition of force majeure on the basis that it now constitutes a known and foreseeable risk.”
