Gas market role may protect Qatar
DUBAI, UNITED ARAB EMIRATES | Natural gas built the high-rises of Qatar’s capital, put the Al-Jazeera satellite news network on the air and a fleet of passengers jets for its state carrier in the sky. Now, it may be what protects Qatar as it is in the center of the worst diplomatic crisis to strike the Gulf in decades.
As the world’s biggest exporter of liquid natural gas, Qatar’s supplies keep homes warm in the British winter, fuel Asian markets and even power the electrical grid of the United Arab Emirates, one of the main countries that has cut ties to the energy-rich nation.
So far, its supplies have continued uninterrupted since the diplomatic dispute began last week. Natural gas markets have yet to respond to the rift and prices have remained stable. But Qatar wields a potential economic weapon if the crisis escalates and countries around the world that depend on its supply may find themselves needing to side with the tiny nation that is home to a major U.S. military installation.
“If Qatari gas exports were to be blocked, countries like Britain, Japan, South Korea and China would have an energy crisis and would have to scramble to get their energy elsewhere,” said Kristian Coates Ulrichsen, a Seattle-based research fellow at the James A. Baker III Institute for Public Policy at Rice University, who has extensively studied Qatar.
“For any small country, particularly a small country in the Gulf surrounded by much larger and potentially expansionary powers, having international partnerships is a key tool of your external security,” he said. “I think that may be what the Qataris are banking on right now.”
President Trump has largely backed the tough Saudi-Egyptian line accusing Qatar of tolerating and funding some terror groups, but a number of mediation efforts — by the United Nations, France, Kuwait and Pakistan, among others — have been launched in recent days to keep the Gulf diplomatic crisis from spiraling out of control.
Qatar, a country of 2.2 million people where citizens make up over 10 percent of the population, discovered the offshore North Field in 1971, the same year it became independent. It took years for engineers to discover the field’s vast reserves, which shot Qatar to third in world rankings, behind only Russia and Iran, with which it shares the North Field.
It began exporting natural gas in 1997, just after Qatari Crown Prince Hamad bin Khalifa Al Thani seized power from his father, Sheikh Khalifa, in a palace coup. Sheikh Hamad used revenue from the natural gas to pursue a diplomatic path away from Saudi Arabia, long the heavyweight among Gulf countries. Qatar also secured hosting the 2022 FIFA World Cup, relying on that money to build stadiums and develop Doha, its capital.
But all that time, Qatar kept a wary eye on its neighbors. Though both it and Saudi Arabia practice an ultra-conservative form of Sunni Islam called Wahhabism, Qatar allows women to drive and foreigners to drink alcohol. Qatar also has clashed with Saudi Arabia and Bahrain over territory in the past.
As a hedge, Qatar hosts some 10,000 American soldiers and the forward headquarters of the U.S. military’s Central Command. Other nations also operate forces out of Qatar. Its military, numbering around 11,800 troops, is only bigger than Bahrain’s.
Natural gas exports may help Qatar protect itself during ongoing disputes it with other Arab nations. Some of those countries, as well as nations in Asia and Europe, rely on supplies from Qatar, which is the world’s largest exporter of liquid natural gas.