another wrinkle in the qatar crisis · pdf fileanother wrinkle in the qatar crisis toward the...

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Another Wrinkle In the Qatar Crisis Toward the end of last year, I found myself in discussions with Qatari energy and financial officials in Doha. Those meetings took place just before and after similar sessions in Abu Dhabi. In each case, the object was to determine where investment trends were moving in a broader global context. Yet one takeaway from those meetings has a curious connection to more recent events. More on this in a moment. Currently, Qatar has become the subject of sanctions from neighboring countries. The charge is that Doha has been financing terrorists and allying with Iran. Now the substance of the accusations depends on who you talk to in the region. There are also reasons to suspect the division was accentuated by some “false news” allegedly issuing from Moscow. On the other hand, that Saudi Arabia is leading the move is not debatable. Egypt and the United Arab Emirates are also supporting the Saudis. The mess is getting serious. Fire Turned up Under a Simmering Pot This is hardly the first time Riyadh has suspended diplomatic relations with Doha. It last happened in 2014. However, this time there is a more concerted antagonism from the Saudis. Qatar has for some time attempted to play “both ends” in the Gulf – pledging loyalty to Sunni neighbors while continuing to maintain ties with Shia Iran. In both Libya and Syria, the two nations have supported opposing factions. Then there is the presence of the major Qataribased AlJazeera news network. The Saudis have long criticized the “slant” of the news coming from AlJazeera and have demanded that Doha close the outlet. Then there are the Hamas and Muslim Brotherhood figures living in Qatar. While the Strait of Hormuz remains open to Qatar’s liquefied natural gas (LNG) exports, Saudi Arabia has cut the primary land route for supplies to Qatar. By some estimates, this accounts for upwards to 40% of all daily imports into the country. JUNE 19, 2017 All About That (Qatari) Gas

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Page 1: Another Wrinkle In the Qatar Crisis · PDF fileAnother Wrinkle In the Qatar Crisis Toward the end of last year, I found myself in discussions with Qatari energy and financial officials

Another Wrinkle In the Qatar Crisis Toward the end of last year, I found myself in discussions with Qatari energy and financial officials in 

Doha. Those meetings took place just before and after similar sessions in Abu Dhabi. In each case, the 

object was to determine where investment trends were moving in a broader global context. 

Yet one takeaway from those meetings has a curious connection to more recent events. More on this in 

a moment. 

Currently, Qatar has become the subject of sanctions from neighboring countries. The charge is that 

Doha has been financing terrorists and allying with Iran. 

Now the substance of the accusations depends on who you talk to in the region. There are also reasons 

to suspect the division was accentuated by some “false news” allegedly issuing from Moscow.  

On the other hand, that Saudi Arabia is leading the move is not debatable. Egypt and the United Arab 

Emirates are also supporting the Saudis.  

The mess is getting serious. 

Fire Turned up Under a Simmering Pot 

This is hardly the first time Riyadh has suspended diplomatic relations with Doha. It last happened in 

2014. However, this time there is a more concerted antagonism from the Saudis. 

Qatar has for some time attempted to play “both ends” in the Gulf – pledging loyalty to Sunni neighbors 

while continuing to maintain ties with Shia Iran. In both Libya and Syria, the two nations have supported 

opposing factions.  

Then there is the presence of the major Qatari‐based Al‐Jazeera news network. The Saudis have long 

criticized the “slant” of the news coming from Al‐Jazeera and have demanded that Doha close the 

outlet. Then there are the Hamas and Muslim Brotherhood figures living in Qatar. 

While the Strait of Hormuz remains open to Qatar’s liquefied natural gas (LNG) exports, Saudi Arabia has 

cut the primary land route for supplies to Qatar. By some estimates, this accounts for upwards to 40% 

of all daily imports into the country. 

JUNE 19, 2017 

All About That (Qatari) Gas 

Page 2: Another Wrinkle In the Qatar Crisis · PDF fileAnother Wrinkle In the Qatar Crisis Toward the end of last year, I found myself in discussions with Qatari energy and financial officials

ALL ABOUT THAT (QATARI) GAS  2

Yesterday (June 18) was the deadline for Qataris to leave Saudi Arabia, Bahrain, and the UAE. Egypt is 

expected to follow suit. For its part, Doha has placed the same deadline on citizens of the three nations 

living in Qatar. There is no word this morning as to whether each has complied. 

Prospects for the rancor tearing apart the Gulf Coordination Council (GCC) remain in a war of decrees 

that is largely helping Iran now. It for this reason that several knowledgeable commentators believe 

some interim accord will be reached in a disagreement that has lasted decades.  

The Saudi‐led move against Qatar was supposed to have created a major rift within OPEC. It didn’t. 

Qatar is one the smallest contributors to OPEC monthly production, less than 600,000 barrels a day. Its 

future for a while now has been tied up in exports of LNG, for which its fleet is the largest in the world. 

The move was also expected to put geopolitical pressure on the US, given the large and strategically 

important American military base located there. It hasn’t…and least not yet. Sources have told me that 

US officials do not as yet see problems for the continuing presence of military personnel there.   

Other matters are shaping up differently. And that brings me back to the conversations I had several 

months back.  

Qatar to the Chase 

During my discussions late last year, certain Gulf‐based finance channels were deemed to be off limits. 

In both Doha and Abu Dhabi I had broached the subject of financing for Iranian LNG exports. With 

Qatar having already made a massive investment in LNG and my scheduled meetings with the Iranians 

to take place in Frankfurt in March, it seemed a major issue. 

To say the least, it was unusual to see a Qatari lack of concern over a new export flow likely to further 

depress their revenues. When I pursued the matter of how those attending expected Iranian LNG 

exports to develop, I was greeted with something else. 

A stone wall.  

Doha has been competing with Dubai over the UAE’s dominance in regional finance. Qatar is already the 

leading global nation for wealth per capita and it has been flexing that leverage. For at least the last two 

years, it has been enticing fiduciary services from Dubai to Doha.  

Page 3: Another Wrinkle In the Qatar Crisis · PDF fileAnother Wrinkle In the Qatar Crisis Toward the end of last year, I found myself in discussions with Qatari energy and financial officials

ALL ABOUT THAT (QATARI) GAS  3

Subsequent information leads me to conclude the following. 

Qatar intends to initiate financing avenues for Teheran with Iranian LNG exports a principal component. 

It is likely that arrangements between the two countries will involve a broader joint LNG policy, leasing 

of Qatari tankers and shore facilities, and probably a new bilateral accord on further development of the 

offshore North Pars fields. 

One other possibility involves Qatar entering into consignment swaps with Iran, allowing export of LNG 

from Iranian ports south of the Strait of Hormuz in the event of increased Saudi and Emirati pressure on 

the choke point. 

Ongoing Doha‐Teheran “arrangements” are at the nub of the heated regional controversy. But 

indications are this time it will be over much heightened finance and export matters.  

   

Page 4: Another Wrinkle In the Qatar Crisis · PDF fileAnother Wrinkle In the Qatar Crisis Toward the end of last year, I found myself in discussions with Qatari energy and financial officials

ALL ABOUT THAT (QATARI) GAS  4

About the Author 

 Dr. Kent Moors is an internationally recognized expert in oil and 

natural gas policy, risk management, emerging market economic 

development, and market risk assessment. 

 

He serves as an advisor to the highest levels of 27 countries, including 

the U.S., Russian, Kazakh, Chinese, Iraqi, and Kurdish governments, to 

the governors of several U.S. states, and to the premiers of two 

Canadian provinces. He’s served as a consultant to private companies, 

financial institutions and law firms in 29 countries, and has appeared more than 2,300 times as a 

featured radio‐and‐television commentator. He appears regularly on ABC, BBC, Bloomberg TV, CBS, 

CNBC, CNN, NBC, Russian RTV, and the Fox Business Network. 

 

A prolific writer and lecturer, his six books, more than 2,700 professional and market publications, and 

over 650 private/public sector presentations and workshops have appeared in 47 countries.