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Port bans choke Qatar's commodity trade as gas supply worries grow – Nasdaq

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Reuters


* Qatari ships barred from region's largest refuelling hub
    * Food import supplies to Qatar disrupted
    * Maersk says it cannot transship containers via UAE
    * Impact on global gas market unknown as tests approach
    * Norsk Hydro says aluminium shipments blocked from UAE port
    * GRAPHIC - Qatar fallout on LNG market http://tmsnrt.rs/2syp5FR

 (adds Maersk Line comment)
    By Roslan Khasawneh and Oleg VukmanovicSINGAPORE/LONDON, June 6 (Reuters) - A campaign by leading
Arab powers to isolate Qatar is disrupting trade in commodities
from crude oil to metals and food, and deepening fears of a
possible jolt to the global gas market, where the tiny Gulf
state is a major player.
    Just a day after Saudi Arabia and its Arab allies severed
transport links with Qatar over a diplomatic row, bans on Doha's
fleet using regional ports and anchorages threatened to halt
some of its exports and disrupt those of liquefied natural gas
(LNG).[nL8N1J23EL][nL1N1J20M6]
    Traders worried that Riyadh's allies would refuse to accept
LNG shipments from the Gulf state, and that Egypt might even bar
tankers carrying Qatari cargoes from using the Suez Canal as
they head to Europe and beyond - although Cairo is bound by an
international agreement to let them use the waterway.
    Saudi Arabia, Egypt, the United Arab Emirates (UAE) and
Bahrain severed relations with Qatar and closed their airspace
to commercial flights on Monday, in the worst split between
powerful Arab states in decades. [nL8N1J30YR]
    U.S. President Donald Trump joined in the dispute on
Tuesday, saying leaders he met on a Middle East trip had warned
him that Doha was funding "radical ideology". Qatar vehemently
denies the accusations made against it.
    Qatar is now unable to load crude oil onto supertankers
together with other Gulf-based grades, and price agency S&P
Global Platts said it would not automatically include the
country in its Middle East price benchmark. [nL3N1J32S1]
    The agency noted that tankers usually combine Qatari
shipments with crude from Kuwait, Saudi Arabia, the UAE and Oman
before heading from the Gulf. "Restrictions on vessels calling
into Qatar and associated uncertainty could impact the inherent
value of crude loading from Qatar," it said.
    More worryingly, food imports are affected as Saudi Arabia
closed its land border with Qatar, stranding thousands of trucks
carrying supplies. [nL8N1J23IC] Sources said the UAE and Saudi
Arabia have already cut exports of white sugar to Qatar.
Consumption is traditionally higher during the Muslim holy month
of Ramadan, which is currently being observed.
    Qatar, which largely depends on food imports for its
population of 2.5 million, has assured residents it has taken
measures to assure that normal life continues.
    However, Maersk <MAERSKb.CO>, the world's biggest container
shipping line, said it can no longer transport goods in or out
of Qatar. [nL8N1J34FL]
    Containers carrying food and other consumer goods are
usually shipped to Qatar via the UAE port of Jebel Ali. A Maersk
Line spokesman said: "We have confirmation that we will not be
able to move Qatar cargo in and out of Jebel Ali."
    Shoppers packed stores in Doha on Monday to stock up. On
Tuesday, fresh poultry and some types of milk were in short
supply at two supermarkets visited by a Reuters reporter.
However, plenty of fruit and vegetables remained on the shelves.

    EXCLUSION ZONES
    With exclusion zones sweeping into effect, vessels from
Qatar are no longer able to dock in the UAE or Saudi Arabia as
planned. According to shipping data on Thomson Reuters Eikon,
around half a dozen oil, chemical and LNG tankers have had to
leave UAE waters or have halted in the open ocean.
    Bans on Qatar-linked oil and LNG vessels refuelling at the
UAE's port of Fujairah have added to chaos, pushing shippers to
find new refuelling points at extra cost, industry sources said.
    Lying near the Strait of Hormuz, through which ships pass on
their way to customers in Asia, the United States or Europe,
Fujairah is one of the world's most important ports for the
global energy market.
    Qatar, the world's biggest LNG seller, is moving to send a
first batch of LNG tankers as far afield as Singapore and
Gibraltar to refuel with Fujairah now off limits. Some trade
sources said this could increase costs and delay deliveries to
its clients globally.
    The UAE's ban also effectively halts deliveries of LNG
produced in Qatar to the Gulf state, trade sources said. Royal
Dutch Shell has a deal with the Dubai Supply Authority to
deliver up to three LNG cargoes per month, typically sourced
from Qatar.
    "This shouldn't affect the spot market though. Shell will
simply need to go into its global portfolio and find LNG from
elsewhere to send to Dubai. It's a minor inconvenience," one LNG
trader said.
    LNG traders are on high alert for signs of disruption
through the Suez Canal. They are tracking the Al Ruwais LNG
tanker, which is nearing the waterway and plans to become the
first Qatari cargo to pass through since the row erupted.
    Cairo has made no official statement. However, a Suez Canal
Authority official said that under an international agreement,
Cairo allows all ships to pass through except for those from
countries at war with Egypt. The Suez Canal does not have the
power to prevent Qatari ships from passing, the official added,
speaking on condition of anonymity.
    Any tanker barred from using the canal would have to sail
around Africa, adding a month to shipping times. Such disruption
 could boost demand for Russian gas, just as Europe is trying to
reduce its reliance on such supplies due to disputes with Moscow
over its role in the Ukraine crisis.
    Another test will be a batch of LNG shipments of Qatari
origin being brought by commodity trader Trafigura to Egypt.
These are due to arrive at the country's Ain Sokhna port over
the coming days and weeks, trade sources said.
    Any sign that state-run importer Egyptian Natural Gas
Holding would bar LNG of Qatari origin would probably push up
spot prices sharply as middlemen seek alterative supplies.
    Last year Qatar produced 60 percent of all LNG imported by
Egypt, all of which was brought in by third-party traders such
as Trafigura, Glencore and Vitol.
    "The biggest impact will be if Egypt tries to restrict
vessels coming through the canal or if they ban Qatari LNG from
local ports," a trading source said.
    The rift has also hit aluminium exports from a Qatari plant
part-owned by Norway'sNorsk Hydro <NHY.OL> as it has lost
access to the Jebel Ali port, through which it typically runs
exports operations. [nL8N1J30PC]
    Circumventing barriers to customers in Asia, Europe and the
United States will take some time, the company said, showing how
the diplomatic face-off is inflicting havoc on global supply
chains.

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GRAPHIC - Qatar fallout on LNG market     http://tmsnrt.rs/2syp5FR
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 (Additional reporting by Jessica Jaganathan, Mark Tay, Yousri
Ahmed, Jonathan Saul and Eman Kamel; Editing by Christian
Schmollinger and David Stamp)
 ((roslan.khasawneh@thomsonreuters.com)(Reuters Messaging:
roslan.khasawneh.thomsonreuters.com@reuters.net)(+65 6870 3121))

Keywords: GULF QATAR/COMMODITIES (WRAPUP 2, PIX)