Although the diplomatic crisis in Qatar would have little impact on the wider oil market, the situation could disrupt Qatari crude and refined product exports.
The crisis has upended shipping markets as tightened port restrictions are expected to cause logistical complications, according to Ocean Freight Exchange (OFE).
The restrictions were imposed after various Gulf nations including Saudi Arabia, the UAE, Egypt and Bahrain, on June 5 announced that they were severing diplomatic ties and transport links with Qatar.
As a result, Qatari-flagged and owned vessels have been banned from all UAE and Saudi ports. Certain ports in the UAE and Bahrain have also banned any vessel travelling from or to Qatar from entering, including Khor al Fakkan and Fujairah which is the key bunkering port in the Arabian Gulf.
OFE informed that Fujairah’s ban on Qatari-flagged and owned vessels as well as vessels moving to and from Qatar is expected to weigh heavily on bunker sales in the hub, as well as result in increased costs for owners who have to seek alternative ports for refuelling.
On the clean tankers side, owners have been seeking a premium for Qatar-loading cargoes due to increased uncertainty in the region as well as potentially higher bunker costs.
VLCCs have managed to command a slight premium for now, with rates for the key AG/Japan up by w3 points since June 5.
“Should any issues regarding co-loading come to fruition, charterers are likely to turn to smaller tankers such as Suezmaxes and Aframaxes instead. Another option worth exploring would be STS transfers as well,” according to OFE.