DOHA (Dispatches) -- Qatar has cut government department budgets by up to 30 percent and reduced overseas aid spending by roughly 85 percent, the Financial Times (FT) reported, adding that Doha is “contemplating” further cuts to deal with the fallout of the U.S.-Israeli war on Iran.
Qatar’s revenue primarily depends on liquefied natural gas (LNG). Iranian retaliatory attacks on U.S. assets in the Persian Gulf sheikhdom have disrupted that production, complicating the export of the remaining supply through the Strait of Hormuz.
The budget cuts follow the collapse in LNG income, three people briefed on the matter told FT.
Doha has set its 2026 budget at roughly $61 billion, but has not disclosed how much the departmental cuts reduce it. Of the six Persian Gulf states, Qatar faces the steepest downturn in 2026: an 8.6 percent decline in output, according to IMF projections.
Doha is considering deeper cuts next year if the crisis extends into the final quarter, Tarik Yousef, a senior fellow at the Middle East Council on Global Affairs, told FT.
“The authorities have managed the crisis effectively, but the hit has been massive,” he said. “They have been drawing on accumulated financial buffers to keep the economy going and maintain liquidity. But ultimately, that leaves a substantial hole in the budget.”
Those buffers include the Qatar Investment Authority, a sovereign wealth fund with $500 billion in assets.
Doha does not disclose its total foreign aid expenditure. However, its $1.5 billion contribution to the UN’s Office for the Coordination of Humanitarian Affairs last year placed it among the top five donors, according to the Qatari Foreign Ministry.
Ras Laffan, which handles more LNG exports than any other facility worldwide, was struck by retaliatory Iranian drones and missiles in February, four days into the war. 
Iran struck the plant again in March, knocking out 17 percent of export capacity, with repairs expected to take as long as five years.
The damage forced QatarEnergy to declare force majeure on its supply contracts, releasing it from its delivery obligations to buyers in Europe and Asia.
To keep its Asian customers supplied while its exports remain halted, the state producer has spent roughly $1 billion this year on 33 LNG cargoes bought from the U.S., with deliveries headed to South Korea, Taiwan, Bangladesh, India, and Japan, according to Reuters.