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Qatar Energy: Developments in Red Sea May Affect Gas Shipments

Fitch Ratings said on Wednesday that shipping disruptions and re-routing away from the Red Sea “will maintain the geopolitical premium in the main commodity markets.” (Photo: Reuters)
Fitch Ratings said on Wednesday that shipping disruptions and re-routing away from the Red Sea “will maintain the geopolitical premium in the main commodity markets.” (Photo: Reuters)
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Qatar Energy: Developments in Red Sea May Affect Gas Shipments

Fitch Ratings said on Wednesday that shipping disruptions and re-routing away from the Red Sea “will maintain the geopolitical premium in the main commodity markets.” (Photo: Reuters)
Fitch Ratings said on Wednesday that shipping disruptions and re-routing away from the Red Sea “will maintain the geopolitical premium in the main commodity markets.” (Photo: Reuters)

Qatar Energy announced on Wednesday that the attacks in the Red Sea “may affect” the scheduling of liquefied natural gas (LNG) shipments, in contrast to production, which it assured was “continuing without interruption.”

In a statement, the company said: “While the ongoing developments in the Red Sea area may impact the scheduling of some deliveries as they take alternative routes, LNG shipments from Qatar are being managed with our valued buyers.”

Meanwhile, Fitch Ratings said on Wednesday that shipping disruptions and re-routing away from the Red Sea “will maintain the geopolitical premium in the main commodity markets, including for oil and gas, chemicals, and fertilizers, unless there are wider shipping – or production – disruptions in the region.”

In a statement, the ratings agency said: “Heightened geopolitical risk, including the recent shipping disruptions, will maintain the oil price premium. However, without material disruptions to actual oil production, or a wider escalation of attacks to more vital oil transport routes in the region, we do not expect a strong upside to our USD80/bbl Brent price assumption for 2024, as there is material OPEC+ spare capacity.”

Fitch added that total oil shipments via the Suez Canal, the SUMED pipeline, and the Bab-el-Mandab Strait accounted for about 12% of global oil seaborne trade in the first half of 2023, according to the US Energy Information Administration (EIA).

The agency noted that Houthi attacks have mainly been concentrated in the narrow strait of Bab-el-Mandab.

“Northbound oil shipments via the Suez Canal and the SUMED pipeline are directed to Europe, mainly from Saudi Arabia and Iraq. Southbound flows are primarily Russian oil exports to China and India following the EU sanctions on Russian oil imports,” it stated.

BP, Shell, QatarEnergy, and many shippers have halted transit through the Suez Canal, with some shippers re-routing around Africa, according to the agency, which noted that this “may marginally tighten the oil and gas markets, albeit temporarily, as supply chains need to adjust to the alternative route taking about a fortnight longer.”

However, Fitch does not anticipate any material impact on prices.

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Most Base Metals Fall as US Recession Jitters Dampen Sentiment

Specialist Dilip Patel works at his post on the floor of the New York Stock Exchange, Monday, Aug. 5, 2024. Nearly everything on Wall Street is tumbling as fear about a slowing US economy worsens and sets off another sell-off for financial markets around the world.(AP Photo/Richard Drew)
Specialist Dilip Patel works at his post on the floor of the New York Stock Exchange, Monday, Aug. 5, 2024. Nearly everything on Wall Street is tumbling as fear about a slowing US economy worsens and sets off another sell-off for financial markets around the world.(AP Photo/Richard Drew)
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Most Base Metals Fall as US Recession Jitters Dampen Sentiment

Specialist Dilip Patel works at his post on the floor of the New York Stock Exchange, Monday, Aug. 5, 2024. Nearly everything on Wall Street is tumbling as fear about a slowing US economy worsens and sets off another sell-off for financial markets around the world.(AP Photo/Richard Drew)
Specialist Dilip Patel works at his post on the floor of the New York Stock Exchange, Monday, Aug. 5, 2024. Nearly everything on Wall Street is tumbling as fear about a slowing US economy worsens and sets off another sell-off for financial markets around the world.(AP Photo/Richard Drew)

Prices of most industrial metals dropped on Tuesday, weighed down by bleak demand outlook following US data that sparked fears of a possible recession in the world's biggest economy.
Three-month copper on the London Metal Exchange (LME) was down 0.3% at $8,858.50 per metric ton, as of 0303 GMT. The contract was hovering near a 4-1/2-month low of $8,714 hit in the previous session, Reuters said.
The most-traded September copper contract on the Shanghai Futures Exchange (SHFE) declined 2.5% to 71,260 yuan ($9,964.90) a ton. The contract tumbled as much as 3.3% earlier in the session to 70,630 yuan, its lowest since March 13.
US data showed job growth fell short of expectations and the unemployment rate rose, pointing to possible weakness in the labor market and greater vulnerability to recession.
On the COMEX, fund managers dropped their bullish bets for copper, with net long positioning down to 9,449 contracts on July 30, an 87% drop from May 21, latest exchange data showed.
LME copper has shed 20% since its record high of $11,104.50 a ton hit on May 20.
Physical demand, however, improved as prices fell.
The premium to import copper into China rose to $48 a ton on Monday, the highest since March 18. Copper stocks in SHFE warehouses eased to 295,141 tons, the lowest since May 17, although inventories outside of China remained elevated.
LME aluminium eased 0.1% to $2,248.50 a ton, nickel edged down 0.4% at $16,205, zinc dipped 0.2% to $2,629, while tin advanced 0.3% to $29,570 and lead rebounded 0.7% to $1,944.50 after tumbling 4.6% in the previous session.
SHFE aluminium fell 0.7% to 18,855 yuan a ton, nickel dropped 1.1% to 128,910 yuan, zinc declined 1.4% to 22,225 yuan, lead shed 3% to 17,345 yuan and tin decreased 1.6% to 243,880 yuan.
SHFE lead hit its lowest since May 7 of 17,075 yuan, tracking losses in the previous session on the LME.