Qatari restrictions set to disrupt shipping sector, report says

12 June 2017


Restrictions placed on Qatar by its Middle East neighbours, after allegations that the country supports terrorism,  have significant consequences for the region’s shipping trade, according to research by international law firm, Holman Fenwick Willan (HFW).

A report by HFW, which has five Middle East offices and one of the largest shipping and logistics teams in the region, lists a series of measures taken against Qatar including Saudi Arabia, the UAE, Bahrain and Egypt severing diplomatic ties.

On top of this, Saudi Arabia, the UAE and Bahrain have now also closed their air space and territorial waters to Qatar while Saudi Arabia has also barred its land border with Qatar, its only such link with another country, while Egypt has closed its airspace to all flights to, and from, Qatar.

The report, The Qatari Restrictions: Implications for the Shipping Sector, adds: “As a result, seaports operated by the alliance against Qatar are now blocking ships showing the Qatari flag, along with those heading to, and from, the country.

“In particular, the Saudi and UAE port authorities have banned all ships flying Qatari flags, or owned by Qatari companies or individuals, from their territorial waters.

“All UAE ports, such as Fujairah, and those operated by DP World UAE Region, have also banned all ships sailing to, or arriving from, Qatari ports, regardless of the purpose of their trip. In addition, DP World UAE Region has extended the ban to all ships loading, or discharging, cargo destined to or coming from Qatar.”

According to the research, it has also been reported that the Ports and Martime Affairs department at Bahrain’s Ministry of Transportation and Telecommunications has suspended all marine navigation from, and to, Qatar with immediate effect.

In addition, the Petroleum Ports Authority in Abu Dhabi is reported to have issued a notice that Qatari-flagged vessels will not be allowed to enter Abu Dhabi Petroleum Ports.

The report says: “These developments mark an unprecedented change in Middle East relations which will undoubtedly affect companies with trade routes from Qatar.”

HFW says that it envisages the following operational implications, most immediately for the shipping sector, all of which have cost repercussions on the affected parties:

  • Shutting the land border between Saudi Arabia and Qatar is likely to cause long queues/delays, particularly road consignments bound for Qatar.
  • Qatar is a major exporter of condensate, an ultra-light crude oil and the trade ban is likely to make buying this and Qatar crude more difficult.
  • Bunkering is likely to be affected. Major bunkering ports such as Fujairah, where about three-quarters of tankers sailing through The Gulf stop to re-fuel, are refusing ships sailing to, or from, Qatar.
  • For trans-shipments, some reports indicate that cargo is not allowed to be discharged onto feeder vessels in Qatar.
  • Ship managers indicate that they are encountering difficulties related to crews. It is reported that Fujairah port’s immigration is not allowing crews to join, or sign off, ships from, or bound for, Qatar.
  • There are reports that banks in the region will refuse to deal with Qatari banks or recognise the Qatari riyal.

Follow Chamber International on Twitter @ChamberInt and on Facebook for the latest in international trade.

Chamber International edge - One of the most powerful technologies available to make exporting simple.