Asian players evaluate possible impacts of Qatar tension
All air and sea traffic from and to Qatar have been ceased by these parties. Saudi Arabia additionally shut its land border with Qatar, which is the country’s only land border, while Qatar related vessels coming from or going to port of Fujairah in the UAE are also prevented from using the port until a further notice.
Following the sanctions against Qatar, diplomatic pressure generated economic concerns as many of aforementioned countries are not only financially connected to each other; but they are also among the world’s important players of crude oil and natural gas sectors.
Asian players have shared their ideas regarding the possible impacts of this tension on polymers, crude oil prices and particularly in terms of supply from Qatar. Some believe that the sector will eventually be influenced by the crisis considering the restrains while others think that impacts will be limited for the petrochemicals sector as Qatar is relatively more effective for liquefied natural gas sector.
In China, some traders do not think that this crisis will impact the market. Qatar may terminate the latest OPEC agreement on crude oil production cut. However, as Qatar’s crude oil production is limited, they believe there won’t be major effects on crude oil market.
A source from an Indonesian producer agreed, saying, “Since Qatar is the largest exporter of liquefied natural gas and its crude oil production is limited, we don’t see any direct impact on energy or polymer markets.”
However, there are also others who expect to see the impacts of this incident on the Asian market. Traders in Thailand pointed out, “We believe this tension will become an advantage for Southeast Asian producers as the competition from Qatar will disappear as offers from Qatar usually form the low end of prices.”
A Singaporean trader heard that cargoes of a Qatari producer will be influenced significantly as these cargoes need to stop by the United Arab Emirate ports. "However, so far even the company representatives are unsure about the extent of this incident," he commented.
An agent of a Saudi producer in Thailand said, “We also heard that Qatar has a loading port in the United Arab Emirates. This tension worries us as we believe it will influence several sectors including construction, logistics and banking.”
A Chinese trader opined, “We think, Qatari LDPE volume may increase to China in the days ahead and prices may become cheaper as Qatar will not be able to sell these cargoes to Arab countries.”
Qatar has a prominent role in China’s LDPE imports as the country was placed as the 2nd largest supplier in 2016 with exports of more than 240,000 tons. This is almost the half of the preceding, top supplier, Iran.
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