As the United Kingdom experiences an energy supply crisis, Qatar is approaching current uncertainties as opportunities to boost bilateral relations. Yet as media highlights the potential for Doha to become a “supplier of last resort” for London, differences in liquified natural gas (LNG) markets and market control inevitably cloud this conclusion. Rather, the impacts of Europe’s energy crisis are more likely to bring the British and Qatari governments closer because of coinciding state interests.
The UK energy problem and Qatari gas diplomacy
The British energy situation today explains why the UK would reach out to Qatar. Natural gas accounts for roughly 40% of UK electricity generation and heats most homes. But domestic output has drastically decreased in recent years and could fall by more than a third by 2030. Worse, Britain can only store LNG for a few days given storage constraints.
As a result, natural gas prices have surged while UK imports now meet half of all domestic demand. For instance, month-ahead LNG prices were projected to be 363% higher than last year as the December National Balancing Point (NBP), commonly referenced for the British gas spot price, hit 191.50 pence/thermal units (therm). This was equivalent to 25.83 USD/Metric Million British Thermal Unit...
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