Saudi Arabia, Bahrain, the United Arab Emirates (UAE) – members of the Gulf Cooperation Council (GCC) to which Qatar belongs – and Egypt decided on 5 June to cut diplomatic and trade ties with Doha over its alleged support for terrorism. Several other nations have also cut ties or downgraded their diplomatic relationship with Doha in recent days. This crisis has led to an unprecedented blockade of land, sea and air routes, with ports in Saudi and the UAE no longer receiving or unloading cargoes from any Qatari vessels.
Qatar is one of the largest exporters of liquefied natural gas (LNG) in the world, and also ships out much of its petroleum-based products, including basic chemicals, polyethylene (PE) and methanol. Our global team of ICIS experts have reviewed the immediate impact on the LNG and petchems markets to help you stay informed on the latest developments and how this may affect you and your business.
ICIS in the news:
Our Global LNG editor Ed Cox was quoted by The Telegraph discussing the impact of the Qatar crisis on the UK gas market. Read the full article »
LNG spot prices have so far not reacted to this development, but traders in the Asia-Pacific may offer at a higher level because of the broad political uncertainty for the world’s largest LNG producer.
Qatari vessels continue to load LNG from Ras Laffan to head to global buyers. Concerns over access through the Suez Canal are overblown with safe transit underpinned by a global convention. However, Qatari vessels have left the waters around Fujairah and can no longer bunker fuel there, which may add time and cost to fuelling operations.
Meanwhile, gas flows through the Dolphin pipeline continue between Qatar and the UAE. Within the UAE, Dubai is the main LNG importer. However Dubai's imports are more of a way to balance the domestic market, than as baseload supply. Dolphin’s capacity is almost half that of the UAE’s total gas demand so continued flows are critical to the region’s supply.Read more
Petrochemical producers in Qatar are bracing themselves for shipment and logistical delays due to the immediate need for re-routing. Production at Qatari petrochemical plants are expected to proceed normally, although shorter working hours during the Muslim fasting month of Ramadan typically sees slightly lower run rates throughout the Middle East. For customers of Qatari products, they may look for alternative options for procurement and sourcing of petrochemical products, as a contingency and especially if cargoes are required on an urgent basis. The natural choice for an alternative would be to look towards Saudi, the GCC’s largest petrochemical player. In the short term, this may be a boon for Saudi's polymer and chemical producers, who will not likely face any shipment delays as a result of blockades. Should this crisis drag on, Qatar may look to entice buyers with lower prices to offset potential delays they may face from the logistical challenges.Read more
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