HomeMediaLatest NewsQatar threatens to leave Europe without gas

Qatar threatens to leave Europe without gas

02 November 2022

Gromov Alexey I. Principal Director on Energy Studies, Head of the Energy Department

Alexey Gromov, Principal Director on Energy Studies of the Institute for Energy and Finance, commented to the Vzglyad business newspaper on the Qatar's position regarding the initiative to introduce a "price ceiling" for Russian gas.

“This summer, the German chancellor visited Qatar, but no serious agreements were reached. Germany did not like the harsh conditions of Doha,” Alexey Gromov says.

Unofficially, it was reported that Qatar insists on "hard" conditions for LNG supplies to the EU for a period of 20 years. And Berlin is clearly not ready to sign such long-term contracts.

“However, Qatar is well aware that it is in a strong position, as its LNG is wanted by customers around the world. Why does it need to supply gas according to some European rules, when Europe is trying in any way to set marginal gas prices? Qatar understands that if Europe does not want to take its gas, then Asia will gladly take it. It will find sales markets for the gas in the coming years without the European one. Therefore, Qatar can dictate its terms to the Europeans,” Gromov believes.

Exporting countries are rightfully afraid to sing to the tune of the EU. Creating a precedent for artificially lowering prices for one or more suppliers of raw materials (whether oil or gas) is extremely dangerous.

“Any intervention in market regulation instruments creates a potential danger for exporting countries. This will not only reduce potential export earnings, but also put LNG trading instruments in the hands of the buyer. It is unlikely that Qatar will be satisfied with the position of the follower,” Gromov notes.

In his opinion, this idea with a ceiling on gas prices in Europe is doomed to failure.

“I think that the Europeans will not make a consolidated decision on the price ceiling. They will decide that it is best not to do anything and not anger gas suppliers in difficult conditions of energy shortages,” the expert says.

Gromov Alexey I. Principal Director on Energy Studies, Head of the Energy Department
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