RISING WAVE OF DISRUPTION

Traders fear possible jolt to global gas market following isolation of Qatar

SINGAPORE/LONDON

ACAMPAIGN 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.

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 combined Qatari shipments with crude from Kuwait, Saudi Arabia, the United Arab Emirates (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.

But shipping data in Thomson Reuters Eikon showed yesterday that exports of Qatari crude had not been hindered by the port ban as tankers were loading Qatari grades along with cargoes from the UAE.

The Panamanian-flagged very large crude carrier Apollo Dream, which is managed and chartered by Japanese refiner oil Idemitsu Kosan Co, loaded Abu Dhabi’s Upper Zakum crude earlier yesterday after already taking a cargo of Qatar Marine onboard, the shipping data shows.

More worryingly, though, food imports are affected as Saudi Arabia closed its land border with Qatar, stranding thousands of trucks carrying supplies. But 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, the world’s biggest container shipping line, said it could 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.”

With exclusion zones sweeping into effect, vessels from Qatar are no longer able to dock in the UAE or Saudi Arabia as planned.

Bans on Qatar-linked oil and LNG vessels refuelling at the UAE’s port of Fujairah had added to chaos, pushing shippers to find new refuelling points at extra cost, said industry sources. Reuters