According to a report from Reuters, Qatar is going to suffer higher selling costs to markets in Asia and Europe as the efforts from the United Arab Emirates have re-imposed a port ban on the oil tankers linked to the advanced Arab state. This was a result from the works of Arab states attempting to isolate the capital city of Doha, and make it problematic for the worlds largest exported of liquefied natural gas.
Originally the UAE decided to ease restrictions and tensions with Qatar a day earlier, but have drastically changed their decision due to suspicion with Qatar supposedly funding terrorism. While the shipments of crude oil and LNG for the wealthy gulf state still continue despite their efforts, traders speculate that Qatari-linked ships are also struggling to find ports to refuel since there is also a ban on all vessels from or traveling to Qatar. The UAE state owned National Oil Company (ADNOC) have clearly stated that there will be “Denial of entry of any of the Petroleum Ports, for all vessels arriving from, or destined to Qatar, regardless of flag.”
Furthermore, this ban will likely disturb the common industry practice of co-loading oil cargoes from different countries onto a tanker to lower costs of shipping. This is a significant matter since “”Qatar doesn’t have that many vessels and most of their exports are co-loaded with other crudes”, an another shipbroker said. Traders and refiners must find alternative methods such as employing smaller vessels or ship-to-ship (STS) transfers to avoid the potential logjams. A Singapore-based ship worker has said, “It’s gotten to the to point where we just want this to be over…. We are scrambling again”.
Previous to this ban, oil prices have been generally unfazed by the tension of the Arab States. The value of a barrel has fallen for the sigh straight session and is just under $50. Helima Croft, a global head of commodity and strategy at R&C Capital Markets, has also mentioned that she “does not believe that the rift will immediately imperil regional energy security” and that “efforts to disrupt Qatari shipments will likely have a marginal effect, absent further deterioration.” These tensions in the Gulf are only causing minor hindrances for energy trade in the Middle East.