The ongoing international crisis in the Middle East is forcing shipping companies to reconsider trading patterns as ports in several countries remain closed to ships from Qatar.
For several weeks now Saudi Arabia, Bahrain, the UAE and Egypt have maintained their trade embargo with all ships and planes from Qatar. The dispute seems unlikely to end any time soon, as a list of tough new demands placed on Qatar by these countries to end the stalemate testifies.
Meanwhile, Reuters is reporting that Qatar has registered a protest at the United Nations’ aviation agency to try to lift the sanctions placed on Qatar Airways. It is also being reported by Bloomberg that Qatar Airlines is keeping a careful eye on increased costs ahead of any legal action, as planes run down fuel by avoiding restricted airspace. However, there has been some easing of restrictions for flights, with Reuters also reporting that Egypt will allow airlines to fly to Qatar for aircraft not registered in Egypt or Qatar.
It remains to be seen whether Doha’s status as an international air hub is in doubt, but nevertheless Qatar Airways has recently revealed record profits, has been voted the world’s best airline at the Skytrax awards and has even made overtures to buy a 10% stake in American Airlines.
However, Qatar has been able to shift in a very short space of time its import trade patterns, especially essentials like food, to other hubs, such as Turkey, the Far East, Europe and even other Middle Eastern countries, like Iran. One businessman has even made plans to import 4000 cows to prevent food shortages.
The ban appears not to have hit global freight too hard, as reported in The Loadstar, and volumes in both air and sea were on course to be higher than those during the previous month.
However, there is some evidence provided by Freightos, the freight booking platform, that rates for airfreight shipments to and from Qatar have strengthened, partly due to non-Qatari carriers dispensing with their promotional offers on the back of a projected uplift in demand.
Turning to shipping, Industry insiders have suggested that this ongoing crisis has various implications. The ban relates to all Qatari flagged vessels being excluded from ports in Saudi Arabia, Egypt, the UAE and Bahrain. Furthermore, a ban was introduced for ships under any flag travelling to or bound for Qatar. However, uncertainty still exists about whether this includes Qatari cargo being shipped via ships registered elsewhere. One implication is the highly profitable bunkering business in places such as Fujairah being adversely affected. Perhaps with this trade loss in mind, the UAE has modified these conditions and has made clear the ban only applies to Qatari-owned vessels, the Hellenic Shipping News reported. Platts has reported that Qatar is now facilitating ship-to-ship fuel bunkering services.
Indeed, it appears that non-Qatari carriers are plugging the gaps this embargo has caused in the shipping sector, according to sources at Freightos. Furthermore, Egypt has continued to allow Qatari-registered ships to transit the Suez Canal, perhaps in recognition of longstanding agreements to protect the canal as an international waterway open to liners from all nationalities. It is being reported that Qatari LNG cargoes continue to be successfully shipped to Egyptian ports.
Despite this apparent circumnavigation of the ban, the rules in Saudi Arabia appear not to have eased, with a blanket ban on any goods of Qatari origin.
At the outset of the embargo, some shipping lines suspended their trade line to Qatar. But another outcome of this crisis is the emergence of new trade patterns, with services being reinstated after being rerouted through countries such as Oman, via the ports of Sohar and Salalah, with no restrictions on Qatari shipping. Oman has become an important staging post for Qatari shipments, with both shipping lines Maersk and MSC recently offering services through these feeder routes, with regular services from Salalah by the end of June. The Ocean Alliance MEA2 has ceased its service to Doha, but is using Oman as a staging post. Qatar Navigation’s shipping wing Milaha Maritime & Logistics has set up lines to these staging ports.
It is also being reported higher per barrel transport charges for oil shipments as smaller vessels are being utilized.