Estimating the cascading global impacts of gas disruptions in Qatar

TL;DR

This paper analyzes the global cascading impacts of a gas disruption in Qatar using a multi-regional input-output model, revealing uneven vulnerabilities and limited mitigation effectiveness across economies.

Contribution

It introduces a scenario-based MRIO framework to quantify direct and indirect impacts of localized gas disruptions on global supply chains.

Findings

Gas disruptions cause significant impacts in Asia and Europe, especially India, China, and South Korea.

Trade reallocation partially mitigates supply losses but has limited overall effectiveness.

Expanding production capacity benefits some economies but offers limited relief to others like India and Pakistan.

Abstract

This study examines the global impacts of a localized disruption in Qatar's gas sector using a multi-regional input-output framework and scenario-based analysis. While the direct impacts of this disruption on importing countries are clear, indirect and cascading impacts are not well understood. We use a Multiregional input-output (MRIO) model to assess the impact of this disruption and to determine whether trade reallocations and increased production can mitigate its effects. Our analysis shows that this disruption leads to significant gas supply losses in Asia and Europe, with the largest aggregate impacts observed in India, China, and South Korea. Allowing for trade reallocation partially mitigates these losses. Further expansion of production capacity among major gas-producing countries improves supply conditions and leads to broader output gains; however, these benefits remain concentrated in a few large economies. Even significant increases in production among top producers offer limited relief to economies such as India and Pakistan. Overall, the results highlight the uneven distribution of both vulnerabilities and recovery potential within global supply chains. While adaptive mechanisms such as trade reallocation and production expansion can alleviate the effects of supply shocks, their effectiveness is limited and heterogeneous. The findings underscore the importance of network structure in shaping shock propagation and resilience, offering insights for managing systemic risks in an interconnected global economy.