By Ebru Sengul
Qatar's liquefied natural gas (LNG) and oil exports will not be affected unless the crisis between Qatar and some Gulf states escalates to pre-war levels, Luiz Pinto, a joint visiting fellow at the Brookings Doha Center and Qatar University told Anadolu Agency (AA) on Wednesday.
Speaking exclusively to AA, Pinto said that the rift would mostly affect Saudi and United Arab Emirates (U.A.E.) exports and re-exports to Qatar, including food and basic goods.
"The persistence of the conflict and Qatar's capacity to use alternative routes and find new suppliers will be key to define the magnitude of the possible shortages and the inflationary impacts of the crisis," Pinto explained.
Saudi Arabia, Bahrain, U.A.E., Yemen and Egypt announced Monday they were cutting off all diplomatic relations with Qatar, citing national security concerns. West African nation Mauritania joined them on Tuesday and Jordan said it would downgrade diplomatic relations with Qatar on Wednesday.
Saudi Arabia, the U.A.E. and Bahrain further blocked Qatar from their airspace and requested that all Qatari diplomats leave within 48 hours.
"Unless the situation escalates to pre-war levels, I don't think Qatar's LNG and oil exports are going to be affected - beyond small LNG shipments to Egypt and the region. Tankers and LNG vessels still have access to Iranian and Omani waters," Pinto highlighted.
Even in the very unlikely event that Oman joins the embargo, Qatari shipments would still be able to pass through the Strait of Hormuz via the Iranian sector, he said.
Pinto added that it is likely that Qatar would still have access to the Suez Canal allowing exports to Europe and that it would be able to keep on supplying gas to the U.A.E. via the Dolphin pipeline, which connects Qatar's giant North Field with the U.A.E. and Oman.
"I believe these two 'choke points' [Suez and Dolphin] are very important indicators of the temperature of the conflict," he asserted.
Pinto argued that, in the event of very extreme circumstances where Egypt and Qatar are formally at war, ships could be banned from sailing in the Suez Canal.
In such a war scenario and given that Qatar provides over 25 percent of the U.A.E.'s natural gas consumption, Qatar could also cut off natural gas exports through the Dolphin pipeline and create a severe problem for the U.A.E., Pinto said.
"Abu Dhabi would not be able to fully replace the Dolphin gas - not enough LNG import capacity is in place. The U.A.E. would probably have to rely on very expensive extraordinary measures such as using upstream solutions to temporarily boost gas output, burning diesel in power plants or even rationing power for certain industries and sectors," he said.
He concluded that powerful extra-regional stakeholders - mostly Asian countries and international oil companies - would play hard to avoid such a scenario.Anadolu Agency website contains only a portion of the news stories offered to subscribers in the AA News Broadcasting System (HAS), and in summarized form. Please contact us for subscription options.