The Saudi-led effort to isolate Qatar won’t impact the price of oil much, Saudi Arabia’s Minister of Energy, Industry and Mineral Resources, Khalid A. Al-Falih, told CNBC.
“Within the energy markets, there is no change,” Al-Falih said on the sidelines of meetings in Kazakhstan over the weekend.
Several Saudi-led Arab states abruptly cut off ties to tiny Qatar earlier this month.
Saudi Arabia has issued demands of Qatar, including ending relations with Iran, breaking all ties to the Muslim Brotherhood and expelling all members of Hamas, according to an Al Jazeera report. It also demanded Qatar shut down broadcaster Al Jazeera, which came under cyber attack last week.
The catalyst for the rift was an alleged statement by Qatar’s emir that criticized Saudi Arabia and President Donald Trump, who recently visited Saudi Arabia in his first foreign trip, agreeing to new military contracts and a broader economic relationship.
So far, the dispute has had little impact in energy markets, but last week, two Qatari LNG shipments, believed to be U.K.-bound, abruptly changed direction in the Gulf of Aden Thursday, raising speculation that the row will spill more broadly into the global gas market.
But Al-Falih said he didn’t expect much of a market impact.
“Qatar is a member of the OPEC organization and is a signatory of the 24-member agreement that has just been extended,” he said. “We trust that they will continue to abide, but their overall contribution in terms of the cuts is rather insignificant in the overall scheme of things.”
Late last month, OPEC said it would extend an 1.8 million-barrel-a-day cut to oil output by nine months, though March 2018, after the November deal failed to fully clear a global oversupply in oil, which has been keeping prices relatively low. Some non-OPEC producers have also signed on to the deal.
Al-Falih added that he hoped the tensions over Qatar would resolve quickly.