Gulf-Qatar rift: What it means for India and the global oil market
To get an idea of some of the developments on Qatar look at this piece of statistics plus some news. According to the US Energy Information Administration, shale oil production in the United States is expected to reach 5.4 million barrels per day in June, its highest level in more than a year. The recovery outpaces estimates for each month since August last year. The news is the rapid expansion of Qatar’s relationship with India.
Shale has put US capital and labor to work, a huge national political dividend, after crude oil prices in OPEC nations skyrocketed beyond $ 49 a barrel since the 14 countries agreed A cut in production since November 2016. In this environment, American juice can start selling at about $ 47 a barrel, given its low quality, but sufficient to bring more and more land to production.
It is vital that the Trump administration ensure that OPEC maintains its limited production. OPEC can keep it closed if Iran does not open the tap for its vast reservoir too much, which means that both the United States and Saudi Arabia must be on the same side of the field. The Saudis can ensure that their diktat runs with two of the major oil producers, the United Arab Emirates and Kuwait, whose royal families are Riyadh’s blood relations. But Qatar is not, although its royal family also comes from the same desert.
And the rise of Qatar is linked to its relationship of sudden deepening with India. There are reasons for this. The first of these is natural gas that Qatar as Iran has a lot, but Saudi Arabia does not have much of. And countries like India that want to use their growing economic influence want gas to flow. There are no restrictions similar to those of OPEC on gas prices and it is cheaper. Therefore, if Qatar plays with its gas reserves and together with Iran dominating its market, there are sufficient reasons to make the Saudis worry about their political-economic hegemony will be cut and the US Worried about their internal recovery.
Qatar in the last three years has become almost a strategic ally for India. The Qatari government has offered to fill India’s strategic reserves for free in exchange for buying natural gas and facilitating access of Doha’s capital to the Indian economy. One of them is the only permission given to Qatar Airways to fly as a domestic airline in India.
In fact, the Doha-New Delhi connection has been noticed throughout the Middle East with alarm. The Indian market is one that all oil producers would want to participate, and especially Saudi Arabia. The share of India’s imports had increased considerably in the post-sanctions period. The pole position, Qatar has taken with India and that is how stepping up once the work on the pipeline begins in earnest could be a speech. It is not without reason that the United Arab Emirates announced that it will establish a Hindu temple to please the Indian government last year.
If the meeting is noted, Doha’s growing cultivation of Iran therefore has even more reason to worry Riyadh about Iran’s new incursions into the Indian market. And therefore the United States. The impact of Trump’s visit has begun to unravel. Iran regaining market share it has lost since the imposition of sanctions, it would love Qatar’s support to regain some of its role of power agent, a position it once enjoyed as one of the five founding members of The OPEC. Since the sanctions, OPEC had become a unipolar world with all the hegemony after having switched to Saudi Arabia. USA Has the same reasons to support the Saudis, as did India for Qatar-the national economy.
In this desert storm, India can not face a price increase for its crude, but it may have to find out many other options, such as the amount of presence it owes to the capital flows of other Gulf nations. Thus, unlike the Gulf crises of the last century, India is in a new position vis-a-vis the Middle East. Many of Monday’s developments have to do with the road to Delhi as well.