Qatar uses Liquified Natural Gas to build ‘extraordinary’ global clout

Success in the export of liquefied natural gas (LNG) has allowed Qatar to build an extraordinary level of global influence, improve its national security and “rise above” its neighbors on the Arabian Peninsula, according to a new paper from Rice University’s Baker Institute for Public Policy.

Qatar has been linked to funding terrorism

Despite attempts by gulf states to crack down on jihadist financial networks, former and current U.S. officials have described a surge in private support for Islamist extremists in Syria, particularly in Qatar and Kuwait.

Qatar, like its neighbors on the Arabian Peninsula, is a member of the Gulf Cooperation Council (GCC), a monarchical bloc that links these six Sunni Muslim-led regimes through trade, customs and immigration treaties. A currency union among the six is also planned.

Qatar ‘rises above’ its region: Geopolitics and the rejection of the GCC gas market (29 pages)

Krane said a “curious imbalance” afflicts energy markets in the Persian Gulf region. Five of the six Gulf monarchies exhibit shortages in domestic supply of natural gas, with two of them turning to market-priced imports of LNG, mostly from outside the region. Meanwhile, Qatar holds an ideal source of supply: It is the world’s third-largest holder of conventional reserves and the No. 2 gas exporter. The researchers question why Qatar has declined to sell to its neighbors.

“Gas-short GCC states have historically been unwilling to pay what Qatar considered a reasonable price for its gas,” Krane said. “Because of this, Qatar has ‘risen above’ the GCC market. Instead it exports its gas as LNG to far-flung customers where it gets much higher prices on long-term bilateral contracts.”

Success in LNG has allowed Qatar to develop an extraordinary level of global influence and improve its national security by building links to powerful importing states such as Japan and China, which have become stakeholders in the security of continued Qatari supply. “Qatar’s gains in revenue, political influence and security have reduced its dependence on regional markets,” he said. “Without serious changes in its neighbors’ attitudes toward pricing, Qatar is likely to leave demand unmet in neighboring monarchies.”

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