Qatar’s resilience in the face of months of economic and diplomatic ostracization echoes in the ears of Saudi Arabia—a regional and religious leader running out of options in its quest to keep the states on the Arabian Peninsula within the confines of its geopolitical agenda.
Doha flaunted its perseverance in fulfilling international natural gas orders once again this week, when Energy Minister Mohammed Bin Saleh Al Sada confirmed this fact to diplomats and reporters in Doha.
“During this blockade we have never missed a single shipment of oil or gas to any of our consumer partners,” Al Sada said Tuesday. “That shows how committed Qatar is, not only to our economy and reliability but also to consuming countries.”
Instead of crumbling without political access to the KSA, Bahrain, Egypt, and the United Arab Emirates, the world’s largest natural gas exporter proved itself to be flexible under severe diplomatic distress. Doha was once dependent on UAE’s ports to dock its massive LNG tankers, but once Abu Dhabi issued an eviction order for Qatari ships and cargo, Oman swiftly became Qatar’s new shipping hub.
“We made a lot of efforts not to miss a shipment and continue that reputation of utmost reliability,” Al Sada added. For example, Qatar didn’t declare force majeure, a legal status protecting a party from liability if it’s unable fulfill a contract for reasons beyond its control. Related: Supermajors Prepare For A Permian Bidding War
It is possible that the Oman arrangement was preplanned by Doha in case of a scenario akin to the one now ongoing for three months. Riyadh has long shown disdain for its small neighbor’s defiance in maintaining relations with Iran, a country with which Qatar shares the South Pars gas field—the largest gas field in the world. Over the past few weeks, Doha has only upped the ante, deploying a diplomatic team to Tehran and joining a group of ‘Iran sympathizer’ Arab countries. Syria and Algeria are the other two most prominent members of this indie band.
Qatar has maintained its compliance to the November agreement by OPEC to cut blocwide oil output by 1.2 million barrels per day. Doha, the cartel’s fourth-smallest oil producer, had a quota of 618,000 barrels per day beginning in January 2017 and continuing through March 2018. August data pegs the state’s production to 616,000 bpd, safely below the requirements under the agreement harmonized by the KSA.
But this fact hasn’t earned Qatar any good grace with its former Arab allies.
"If the brethren in Qatar think they may have a benefit in their rapprochement with Iran, I'd like to say that they have this evaluation wrong in every way,” Saudi Envoy to the Arab League Ahmed al-Kattan said at the group’s summit this week, according to Al Jazeera. “The Qataris will be held responsible for such a decision." Related: Electric Vehicles: The High Cost Of Going Green
He added: "The coming days will prove them wrong because we know that the Qatari people will never accept the Iranians to play a role in Qatar,” suggesting the rise of Arab Spring-like fervor that never quite overcame the country in the movement’s heyday. This made it easy for Doha to tacitly support mass protests in Sunni-led-but-Shiite-populated Bahrain—the country that became one of the initial signatories of the anti-Qatar blockade that began in June.
Kuwait is now the lead mediator between Doha and the anti-Doha axis. President Donald Trump recently applauded Kuwait’s leadership in the issue, pledging to lend an American hand, if need be. But Qatar insists on keeping Al Jazeera live and maintaining its ties to Iran, and has no economic incentive to change its ways—and not that it should.
A tightly anti-Iran Gulf would only serve to heighten tensions in a sensitive region. The Qatar-Saudi feud looks to be both long and arduous, but mostly only for the KSA’s ego.
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By Zainab Calcuttawala for Oilprice.com
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