Global oil and gas markets have been plunged into uncertainty since Monday after Saudi Arabia, the United Arab Emirates (UAE), Bahrain and Egypt cut diplomatic and economic ties with Qatar, the world’s biggest supplier of liquefied natural gas (LNG), Daily Trust reports.
The governments of the four countries said in statements they will sever ties including all air, land and sea transport links with Qatar, accusing the country of supporting Islamist terrorist groups. The disruption of Qatari’s fleet from using regional ports and anchorages are threatening its supplies of LNG. Qatar exported nearly 30% of global LNG supply in 2016 according to the International Group of Liquefied Natural Gas Importers (GIINGL).
While it is uncertain how long the chaos would last, commodity traders are startled by the development and could begin to plan for alternative gas supplies. Traders with supply commitments to Egypt and some Asian states could turn to countries like Nigeria, the United States, and Algeria for replacement cargoes.
However according to various energy experts, Nigeria’s optimism could be clipped by the slack in the global energy markets, the potential short term nature of the ongoing dispute in the region as well as the long term nature of gas supply contracts.