![]() A prolonged downward trend in energy product demand from Asia will bring increased pressure to strengthen political ties and avenues of economic cooperation. Qatar, like many GCC states, has pivoted to Asia as a key destination for its energy exports. It is now a buyer’s market and many analysts expect energy prices to stay low for as long as until 2020. That flexibility may increase Qatari options for renegotiating prices and contracts in a new era of lower energy demand. If demand in China continues to decline, the Qatari’s ability to show some flexibility in delivery (for instance, increasing delivery during winter months) will be a sign to the Chinese of goodwill and customer service. The Qataris are showing some willingness to bargain with China, particularly in its long-term delivery contracts with PetroChina and the China National Offshore Oil Corporation (CNOOC). ![]() Like many of the Gulf Cooperation Council states, economic relations with Asia are increasingly important to Qatar’s fiscal position and its long-term export market. Approximately 75 percent of Qatar’s LNG exports in 2014 went to Asia. Qatari gas is largely exported to Asia and prices in long-term contracts are indexed to the fluctuating price of oil. Malaysia is currently the number two LNG exporter with Australia, Nigeria, and Indonesia following. As other suppliers are able to export their products to market, due to a massive investment in infrastructure to package and deliver LNG from Australia and the United States, Qatari market share could decrease to 20 percent by 2020. Qatar currently commands nearly a third of the global market for LNG. As the shale revolution has unsettled oil supply and price in the last year (along with substantial decrease in demand from Asia), gas suppliers are also seeing more competition from the West, namely the United States and Australia. Gas deliveries are also generally scheduled in long-term contracts, often tied to the price of oil, giving gas suppliers less flexibility in price negotiations when market conditions change. Global LNG supply is expected to grow 50 percent by 2020, faster than projected demand. Like the oil market, global supply of liquefied natural gas (LNG) is increasing.
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