Doha launches new shipping routes to Oman amid food shortage fears

Qatar has launched two new shipping services to Omani ports after other Gulf states severed ties with Doha last week, raising concerns over food supplies to import-dependent Qatar.
Thousands of shipping containers destined for Qatar are still stuck at Dubai’s Jebel Ali port, according to Qatari importers. Iran and Turkey have flown in food supplies to Qatar as the gas-rich country seeks other sources.
The two new services will each run three times a week between Qatar’s Hamad Port and the Omani ports of Sohar in the north and Salalah in the south, the Qatar Ports Management Co. (Mwani), a Qatari shareholding company established in 2009, announced on Sunday.
Doha has said the severing of trade and transport ties are hurting the country’s inhabitants.
Mwani posted a video on Twitter on Monday of a cargo ship arriving from Sohar port.
The costs to ship fuel and crude oil from Qatar are expected to rise after the UAE banned vessels that previously called at Qatar from docking at UAE ports, multiple sources from the oil and shipping sectors said on Monday.
This is disrupting the typical logistics of the oil industry where buyers take very large crude carriers (VLCC) capable of carrying 2 million barrels of oil and load up to four different 500,000-barrel cargoes to save on costs. Buyers are now splitting cargoes on smaller Suezmax ships that carry 1 million barrels to load separately in Qatar and the UAE, the sources said.
Suezmax rates are now expected to rise to between Worldscale (WS) 75 and 80 on higher demand for these vessels, said two of the sources.
CSSA, the shipping arm of French oil major Total, South Korean refiner SK Energy and BP have provisionally booked four Suezmax tankers to load crude and condensate in Qatar and the UAE in the second half of June at rates of WS67.5 to WS68.5, shipping data on Thomson Reuters Eikon showed. Worldscale is a formula used to calculate freight costs.
“Operations are very messy. Some refiners need to re-arrange or break their cargoes into Suezmaxes which are more costly,” a Singapore-based trader said.
Companies are also arranging to perform ship-to-ship transfers of smaller parcels onto VLCCs in the water off Sohar, Oman, which has stayed neutral in the conflict, the sources said. Qatar is one of the smallest oil producers in the Middle East, but almost all of its production of 600,000 barrels per day heads to Asia. Qatar Petroleum’s upstream oil partners include Total and Occidental Petroleum Corp.
“We all just do not know if this situation will be solved within the next few days or will drag on for weeks or months,” said Ralph Leszczynski, head of research at Banchero Costa.
In addition to crude, Qatar also exports 600,000 to 700,000 tons a month of naphtha, an oil product typically refined into petrochemicals. Shipowners have now added a premium for ships loading Qatari fuel for Asia, the sources said.

Source: Arab News