MOSCOW – Russia, which has called for dialogue to tackle the political rift in the Arab world over Qatar, will not take sides in the conflict between Doha and its neighbours, Chris Weafer, a partner at Macro-Advisory told New Europe in Moscow. “It doesn’t need to. But I understand it has let it be known it is available to host mediation talks if asked by both sides,” he said.
Saudi Arabia, the United Arab Emirates, Egypt and Bahrain have imposed measures to isolate Qatar, accusing Doha of supporting terrorism. Doha denies the accusation.
Qatar is a major producer of natural gas and the world’s top exporter of liquefied natural gas (LNG).
“Since the west imposed sanctions and Beijing was cool to the China-pivot in 2014, the Kremlin has pursued a diversification strategy in both trade and politics,” Weafer said, adding that this is one of the main reasons Russian President Vladimir Putin twisted Rosneft President Igor Sechin‘s arm to cooperate with the Organization of Petroleum Exporting Countries (OPEC) deal last November.
Sechin, who is the chief executive officer of Russia’s biggest oil producer, initially opposed the deal but has since become a supporter, Weafer said, explaining that the Rosneft CEO changed his mind “since Rosneft made a lot of money because of it”.
“For Putin the OPEC deal is both good politics and good economics. The latter because Russia has earned $2.25 billion more per month over the past six months with the average price at $54 per barrel than it would have with a $45 per barrel average,” Weafer said. “The former because the Arab states have not criticised Moscow’s involvement in Syria since the November deal was announced,” the partner at the Moscow-based consultancy added.
“Moscow is in a sort of sweet-spot in the Middle-East right now. It has finally achieved good relations with Riyadh, after two and a half decades of antagonism. Qatar is a major investor in Rosneft and Abu Dhabi is a big investor in the Russian economy,” Weafer said. “In addition it has better relations with Iran and Turkey than any western state and is close to both the Egyptian government and the faction controlling the oil provinces in eastern Libya. It also counts Israel as an ally,” he said, stressing that “it would be an act of great foolishness to now take sides and risk current friendships and tolerances”.
“Realistically the only way for Qatar to pipe its gas to Europe is either across Saudi and Egypt – obviously never going to happen – or across Iran and Turkey – Iran would never agree to that – or via Iraq-Syria. Moscow would block that,” he said.
According to Weafer, Qatar’s past, present and future role in gas is in LNG plus the Dolphin pipeline, which links Qatar’s giant North Field with the UAE and Oman, “to fuel the power plants that keep Dubai’s lights on”.
Qatar said earlier in June it has no plan to shut the Dolphin pipeline that pumps around 2 billion cubic feet of gas per day to the UAE.
Qatar’s state-owned Mubadala Development Company owns 51% of Dolphin, while French oil giant Total and Houston-based Occidental each have 24.5%.
Meanwhile, Weafer said he expects the Russian oil companies to be less compliant with the OPEC deal extension as the price has slipped below $48 and US Shale is gaining market share.
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