With oil consumption across the globe lowering in the new reality of a coronavirus-ridden world, multiple countries have been experiencing dire economic consequences.
A massive decrease in daily transportation, air travel, and a predicted lowering of industrial oil use has forced oil prices to lower. However, oil is not the only resource that has seen significant price drops since the onset of the COVID-19 pandemic.
Qatar is experiencing a similar economic crisis at the hands of the coronavirus, as stores of liquified natural gas (LNG) build up and remain unsold. Liquefied natural gas is different from other sorts of natural gas as it has been cooled to a liquid state and is able to be shipped, rather than be sent through underground pipelines.
Qatar is stuck between a rock and a hard place. The government can choose to lower LNG prices, which would, in turn, allow them to continue moving stuck cargo and turning a profit. However, this option would force LNG to drop to nearly negative prices in Europe. If they instead choose to cut LNG production, the government would lose important revenue that could be used for infrastructure during these uncertain times, and could possibly lose their top exporter spot to Australia.
It is unclear exactly what Qatar will be doing to combat this problem. Oil-production has been slashed in order to stabilize markets, but nothing as concrete or widespread has been done regarding natural gas prices. Countries like Norway and Russia have slashed exports, and the United States will likely do the same.
Regardless, Qatar’s shipments are appearing to slow, so it looks like they will be taking steps that benefit the global economy, even if it hurts their own country in the process.
Middle-Eastern Art Feature
Amal Al Aathem is a prominent Qatari artist. This piece is from her Gravity collection. Her art often focuses on the spiritual dimensions of women. Al Aathem has been awarded several prestigious prizes for her art.