President Trump accused Qatar, American ally, home to the largest American military installation in the Middle East, and the largest exporter of liquid natural gas (LNG) in the world, of providing financial support to extremists in the region. Qatar denies the accusation.
Saudi Arabia, Bahrain, and the United Arab Emirates (U.A.E.) have closed their ports to ships with planned port calls in Qatar. While no formal demands have yet been made of Qatar three weeks into the affair, Qatar has agreed to a $12 billion fighter jet deal. The timing is interesting, at the least. Additionally, U.K. gas prices have spiked as a result of the dispute.
Questions remain about the extent to which, if at all, Qatar supports extremism. They claim that no such evidence has been presented. Moreover, U.A.E. tops the list in terms of economic ties to Iran, not Qatar, further complicating the terror claims.
With natural gas rapidly replacing coal as the preferred fossil fuel for electricity generation, could it be that this dispute has more to do with natural gas production than terrorism?
The top six producers of natural gas read like a who’s who of global politics:
- United States
- Saudi Arabia
[Source: IEA, “Golden Rules for a Golden Age of Gas”, p69]
Now that the U.S. has joined the list of oil exporters for the first time since 1973, we’re eager to cash in — even if it means drilling in our national parks.
Europe is the largest natural gas market not on the aforementioned list. Until the Ukrainian plane crash in 2015, Russia supplied as much as 43% of Europe’s total natural gas consumption — now up for grabs due to European sanctions on Russia.
Whether the Qatar roil has to do with the financing of terrorism or natural gas depends on who and what you choose to believe. Regardless, this geopolitical jostling for oil and gas dominance and increasingly common terror attacks is bound to produce market instability — and affect our investment accounts.
Joe McHugh is a Marine Corps veteran and Founder of Earth Loans, Inc. Earth Loans helps homeowners replace their oil, gas, or propane furnace with renewable geothermal heating and cooling for about the same cost as your current utility bill. Investors can earn up to 8.5% annually by supporting the switch from oil and gas to geothermal.