Government ministers from Germany and Japan are heading to the Middle East in a bid to safeguard their energy security after Russia’s invasion of Ukraine upended global supplies.
German Economy Minister Robert Habeck and Japan’s Foreign Minister, Yoshimasa Hayashi, are set to hold separate meetings with officials in Qatar and the United Arab Emirates over the next several days.
“The Russian war of aggression against Ukraine has put the issue of energy security at the center of international discussion,” Habeck said in a statement.
The conflict has caused extreme volatility in oil and natural gas markets, triggering price spikes and pushing some of the world’s major consumers into a frantic search for alternatives to Russian supplies. Russia accounts for about a third of Europe’s gas.
Habeck will travel to Doha on Saturday for meetings with Qatar’s ruler, Sheikh Tamim bin Hamad Al Thani, and Energy Minister Saad al Kaabi. He’ll then visit the UAE to meet Energy Minister Suhail al Mazrouei and Abu Dhabi National Oil Co. Chief Executive Officer Sultan Ahmed Al Jaber.
Germany is backing the construction of more LNG import facilities, but the country needs “more liquefied natural gas in the short term,” Habeck said.
While Qatar was the world’s biggest LNG producer last year, its officials have said it can’t offer much help because of its long-term supply contracts. Only 10%-15% of Qatari LNG can be diverted, and Europe would need to convince Qatar’s long-term buyers -- most of which are in Asia -- to do so.
The UAE’s current LNG supplies are limited, and the OPEC producer doesn’t ship crude oil to Europe. The UAE is spending billions to boost gas supply and may consider building more export capacity, but this will take time to come to fruition.
Asian consumers are also grappling with tight energy markets. Hayashi on Sunday will visit the UAE to meet with his counterpart as well as Adnoc’s Al Jaber, according to Japan’s foreign ministry. The small Persian Gulf nation provides around a third of Japan’s oil imports.
Earlier this week, U.K. Prime Minister Boris Johnson visited the UAE and Saudi Arabia, the world’s biggest crude exporter, in an effort to persuade the oil producers to pump more but left empty handed.
©2022 Bloomberg L.P.
