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Qatar exported its first oil cargo to a neighboring country in the Arab Gulf since Saudi Arabia and some of its close allies restored diplomatic ties with the tiny nation in January, after three and a half years of economic embargo and strained relations.
Qatar, a small oil producer especially compared to Saudi Arabia, shipped some 700,000 barrels of its oil to the United Arab Emirates (UAE) in early March, according to Bloomberg tanker-tracking data.
Qatar’s first oil delivery to a neighbor marks the start of recovering trade relations after Saudi Arabia, the UAE, Bahrain, and Egypt restored diplomatic ties with Qatar in early January.
In June 2017, Saudi Arabia and five other Arab nations severed diplomatic ties with Qatar, accusing it of sponsoring terrorism and destabilizing the region. Back then, Saudi Arabia’s Ministry of Foreign Affairs said in a statement that it had made the decision to sever ties with Qatar “as a result of grave violations committed by the authorities in Doha”. The Saudis and their close allies were concerned that Qatar had become too close to Saudi Arabia’s regional rival, Iran. The Saudi-led boycott of Qatar resulted in the closure of airspace for Qatar Airways, suspension of trade, and closing of borders.
After diplomatic efforts from Kuwait and the U.S., early this year Saudi Arabia, the UAE, and Bahrain restored diplomatic ties with Qatar, with Saudi Crown Prince Mohammed bin Salman saying that the agreement to return to normal relations affirmed “our Gulf, Arab and Islamic solidarity and stability.”
During the Saudi-led embargo on Qatar, the tiny Gulf nation quit OPEC as of January 2020. Qatar exports around 500,000 bpd of oil and condensate, a tiny amount compared to Saudi Arabia’s exports, but Qatar is a world-leading liquefied natural gas (LNG) exporter.
Last month, state firm Qatar Petroleum took the final investment decision to build what it says would be the world’s largest LNG project in terms of capacity, as the tiny Gulf nation aims to raise its annual production by 40 percent by the end of 2025 and be the biggest LNG producer in the world for at least the next two decades.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.