Reuters | Business News | By: Roslan Khasawneh and Oleg Vukmanovic | Tue Jun 6, 2017 | 2:39pm EDT:
A campaign by leading Arab powers to isolate Qatar is disrupting trade in commodities from crude oil to metals and food, and deepening fears of a possible jolt to the global gas market, where the tiny Gulf state is a major player.
Just a day after Saudi Arabia and its Arab allies severed transport links with Qatar over a diplomatic row, bans on Doha’s fleet using regional ports and anchorages threatened to halt some of its exports and disrupt those of liquefied natural gas (LNG).
Traders worried that Riyadh’s allies would refuse to accept LNG shipments from the Gulf state, and that Egypt might even bar tankers carrying Qatari cargoes from using the Suez Canal as they head to Europe and beyond – although Cairo is bound by an international agreement to let them use the waterway.
Saudi Arabia, Egypt, the United Arab Emirates (UAE) and Bahrain severed relations with Qatar and closed their airspace to commercial flights on Monday, in the worst split between powerful Arab states in decades.
U.S. President Donald Trump joined in the dispute on Tuesday, saying leaders he met on a Middle East trip had warned him that Doha was funding “radical ideology”. Qatar vehemently denies the accusations made against it.
Qatar is now unable to load crude oil onto supertankers together with other Gulf-based grades, and price agency S&P Global Platts said it would not automatically include the country in its Middle East price benchmark.
The agency noted that tankers usually combine Qatari shipments with crude from Kuwait, Saudi Arabia, the UAE and Oman before heading from the Gulf. “Restrictions on vessels calling into Qatar and associated uncertainty could impact the inherent value of crude loading from Qatar,” it said.
More worryingly, food imports are affected as Saudi Arabia closed its land border with Qatar, stranding thousands of trucks carrying supplies. Sources said the UAE and Saudi Arabia have already cut exports of white sugar to Qatar. Consumption is traditionally higher during the Muslim holy month of Ramadan, which is currently being observed.
Qatar, which largely depends on food imports for its population of 2.5 million, has assured residents it has taken measures to assure that normal life continues.
However, Maersk (MAERSKb.CO), the world’s biggest container shipping line, said it can no longer transport goods in or out of Qatar.
Containers carrying food and other consumer goods are usually shipped to Qatar via the UAE port of Jebel Ali. A Maersk Line spokesman said: “We have confirmation that we will not be able to move Qatar cargo in and out of Jebel Ali.”
Shoppers packed stores in Doha on Monday to stock up. On Tuesday, fresh poultry and some types of milk were in short supply at two supermarkets visited by a Reuters reporter. However, plenty of fruit and vegetables remained on the shelves.
Exclusions zones have also been put into effect.
To read full article – please click here.
