Qatar crisis: Spot LNG spot rates to go down as European cargoes get diverted

The diplomatic split between Qatar and other major middle eastern countries continues to simmer and uncertainty still lingers in the market regarding Qatar’s Indian LNG projects volumes.  Since last week other changes have been afoot. Mauritius, Mauritania and the Maldives have now joined the list of countries severing diplomatic ties with Qatar. 

The UAE has upped tensions by banning any airline destined to Qatar using its airspace, plus enforcing rules that it will jail anyone who sympathises with Qatar. Late last week however two Qatari gas ships appear to have diverted their original path through the Suez Canal, to now going the long way around the Cape of Good Hope to get into Europe, fuelling speculation they may have received deterrence from the Egyptian-controlled Suez Canal.

This can well mean more Qatari spot cargoes into Asia and India, putting pressure on prices
The other main question that remains unanswered is what effect the LNG shipping market will see on Fujairah, an UAE port, prohibiting Qatari ships; Qatari flagged ships; and/or ships coming to or from Qatar from bunkering and anchoring there. Will other Arab ports adopt a similar approach?

Blockade beginning to bite: The effects of the diplomatic crisis in the Middle East are still being assessed.  Now, with the UAE blocking all vessels which have previously called at Qatar from docking at its own ports, freight rates for those vessels calling at Qatar are now expected to rise, while buyers are splitting cargoes on Suezmaxes, rather than VLCCs, in order to load separately at both Qatar and the UAE. Qatar currently produces around 619,000 bpd of crude oil

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