Confusion rules waves as shippers look for clarity on Qatar ban
Food shortages, LNG delivery delays seen as possible fallout from crisis
Shippers hauling oil, food DUBAI and consumer goods across the Middle East are grappling with the fallout from a diplomatic standoff between Qatar and its Persian Gulf neighbours that risks leaving vessels locked out of regional ports.
Abu Dhabi’s oil ports authority banned all vessels coming from or going to Qatar from using its facilities, a move in line with most other terminals in the United Arab Emirates. The port operator, which runs oil and refined product shipment terminals for government-owned Abu Dhabi National Oil Co., imposed the ban late Wednesday, according to a notice, reversing a decision made earlier that day to ease limits on non-Qatari vessels.
Saudi ports are applying restrictions in different ways, with some allowing ships to sail to Qatar, and others preventing vessels from leaving for the neighbouring state, according to a shipping agent with knowledge of situation. King Abdullah Port on the Saudi Red Sea coast north of Jeddah banned all vessels sailing to or from Qatar from berthing at its facilities, said the shipping agent, who asked not to be identified because the information isn’t public. That’s a stricter measure than required by the Saudi Ports Authority, which only calls for harbours to block vessels owned by Qataris or carrying the nation’s flag.
On Friday, U.S. Secretary of State Rex Tillerson called on a Saudi Arabia-led coalition to ease its blockade of Qatar, saying that the cutoff is hindering the fight against Islamic State and provoking food shortages.
After speaking with leaders in the region, Tillerson said in Washington that he believes the countries involved in the dispute — all U.S. allies — are stronger together, and “the elements of a solution are available.”
Saudi Arabia and the U.A.E. — two of OPEC’s largest oil producers — joined with Bahrain and Egypt in severing ties with Qatar Monday, citing the latter nation’s support for regional rival Iran and for extremist groups. Qatar, the world’s biggest exporter of liquefied natural gas, has called the claims baseless and has so far continued to ship its fuel globally and to allow natural gas to flow through a pipeline to the U.A.E.
“A major effect of the cut in diplomatic relationships with Qatar is likely to be felt in the shipping sector,” FGE, a London-based consultant, said in a research note Thursday. Ships travelling to and from Qatar will need to find an alternate refuelling port, and LNG shippers will have to adjust schedules and routes, it said. “This will increase costs, and in the near term, could even lead to delays in LNG deliveries.”
Qatar Petroleum’s trading unit may charter crude tankers to store condensate, a light crude oil it produces at its gas fields, according to four traders with knowledge of the situation. The vessels would store condensate because ports to which they would have delivered the fuel are closed to vessels from Qatar, said the traders who asked not to be identified since the information is confidential.
Abu Dhabi’s Adnoc and Dubai refiner Emirates National Oil Co. are both users of Qatar’s condensate, the traders said.