With the economic consequences of the Ukraine crisis becoming clear, Qatar's foreign minister told CNBC that some countries were exploring a "parallel system" of oil pricing.
It comes after the Wall Street Journal reported that Saudi Arabia is speeding up talks with China to accept yuan instead of dollars as payment for oil purchased by Beijing.
Qatar, according to Mohammed bin Abdulrahman Al-Thani, is "moving up" and holding negotiations with European countries about increasing gas exports.
According to Qatar's foreign minister, the Ukraine war and its geopolitical repercussions are forcing some countries to look into new ways of pricing oil that do not include the dollar.
Mohammed bin Abdulrahman Al-Thani made the remarks on Saturday, following a Wall Street Journal storey that Saudi Arabia is in advanced talks with China to accept yuan instead of dollars for oil purchased by Beijing.
Al-Thani stated that he does not expect such a system to be implemented in the near future, but he did emphasise that the economic implications of the Ukraine war were wreaking havoc on some countries.
“Honestly speaking, look at what happens and the dynamics around us right now. I’m sure there are a lot of other countries who are unhappy with what’s happened and the consequences of the Ukrainian-Russian crisis, especially the economic consequences,” he said.
“And they are going to look and explore a parallel system [of pricing oil] … going to hedge, at least, for them economically. So as we are living through a transition, this transition will not be only a political transition but it is an economic transition as well.”
Last week, Gal Luft, co-director of the Institute for the Analysis of Global Security, warned CNBC that the United States′ harsh economic sanctions could push countries away from the dollar, the currency in which oil is normally priced.
Sanctions include effectively freezing Russia's central bank reserves and cutting Russia out from the SWIFT interbank communications system.
“On the one hand, you are sanctioning right and left. On the other hand, you want countries to buy your Treasurys and finance your debt. That’s not a sustainable scenario,” Luft said.
Qatar's Al-Thani also stated that the government was "scaling up" and in negotiations with European countries about increasing gas exports.
“We are stepping up and helping some European partners who are starting to suffer from some gas shortages … with the limited amount that we have,” he said, stressing that the majority of its gas contracts are long-term and so can’t be changed.
Helima Croft of RBC and Ian Bremmer of Eurasia Group dissect the Europe-US energy pact.
It comes at a time when European countries are looking to diversify their energy supply away from Russia, notably gas. According to the International Energy Agency, the EU imported 45 per cent of its gas from Russia last year.
On Friday, the United States announced plans to collaborate with partners, including Qatar, to supply at least 15 billion cubic metres of liquefied natural gas to Europe this year, with that number expected to rise in the future.
However, Al-Thani stated that no single energy supplier can replace another.
“I think the best way forward is diversifying the source of supply,” he added. “This will be the only way forward. We are in discussion with a lot of other European countries right now, for new long-term contracts. And this discussion is just ongoing.”
(Source:www.cnbc.com)
It comes after the Wall Street Journal reported that Saudi Arabia is speeding up talks with China to accept yuan instead of dollars as payment for oil purchased by Beijing.
Qatar, according to Mohammed bin Abdulrahman Al-Thani, is "moving up" and holding negotiations with European countries about increasing gas exports.
According to Qatar's foreign minister, the Ukraine war and its geopolitical repercussions are forcing some countries to look into new ways of pricing oil that do not include the dollar.
Mohammed bin Abdulrahman Al-Thani made the remarks on Saturday, following a Wall Street Journal storey that Saudi Arabia is in advanced talks with China to accept yuan instead of dollars for oil purchased by Beijing.
Al-Thani stated that he does not expect such a system to be implemented in the near future, but he did emphasise that the economic implications of the Ukraine war were wreaking havoc on some countries.
“Honestly speaking, look at what happens and the dynamics around us right now. I’m sure there are a lot of other countries who are unhappy with what’s happened and the consequences of the Ukrainian-Russian crisis, especially the economic consequences,” he said.
“And they are going to look and explore a parallel system [of pricing oil] … going to hedge, at least, for them economically. So as we are living through a transition, this transition will not be only a political transition but it is an economic transition as well.”
Last week, Gal Luft, co-director of the Institute for the Analysis of Global Security, warned CNBC that the United States′ harsh economic sanctions could push countries away from the dollar, the currency in which oil is normally priced.
Sanctions include effectively freezing Russia's central bank reserves and cutting Russia out from the SWIFT interbank communications system.
“On the one hand, you are sanctioning right and left. On the other hand, you want countries to buy your Treasurys and finance your debt. That’s not a sustainable scenario,” Luft said.
Qatar's Al-Thani also stated that the government was "scaling up" and in negotiations with European countries about increasing gas exports.
“We are stepping up and helping some European partners who are starting to suffer from some gas shortages … with the limited amount that we have,” he said, stressing that the majority of its gas contracts are long-term and so can’t be changed.
Helima Croft of RBC and Ian Bremmer of Eurasia Group dissect the Europe-US energy pact.
It comes at a time when European countries are looking to diversify their energy supply away from Russia, notably gas. According to the International Energy Agency, the EU imported 45 per cent of its gas from Russia last year.
On Friday, the United States announced plans to collaborate with partners, including Qatar, to supply at least 15 billion cubic metres of liquefied natural gas to Europe this year, with that number expected to rise in the future.
However, Al-Thani stated that no single energy supplier can replace another.
“I think the best way forward is diversifying the source of supply,” he added. “This will be the only way forward. We are in discussion with a lot of other European countries right now, for new long-term contracts. And this discussion is just ongoing.”
(Source:www.cnbc.com)