In an effort to avoid a crisis before a harsh winter in Berlin, German Chancellor Olaf Scholz is seeking to secure energy supply deals from the Gulf countries through his visits to Saudi Arabia, the UAE and Qatar, respectively.
Although he did not sign contracts with Saudi Arabia, Schultz succeeded in concluding LNG supply deals with the UAE, at a time when he was preparing to go to Qatar in pursuit of larger agreements.
Schultz is racing against time to find new suppliers to compensate for Russian gas shipments, which will soon run out, while the old continent prepares to face a difficult winter amid a shortage of supplies. The German chancellor is accompanied on his trip by a large delegation that includes representatives of several economic sectors, including energy.
Gulf analysts who spoke to Al-Hurra believe that the energy-rich Gulf states can help Germany to replace Russian energy that has almost stopped flowing to Berlin.
Western sanctions on Russia are redirecting how energy flows around the world, as Russian production goes to the east, the Gulf is likely to become a greater resource for the West, according to the “Economist” magazine.
The British magazine said that the Gulf region will likely remain as important in global affairs in the coming decades as it was in the twentieth century. Experts expect that Gulf exports of oil and gas will constitute 20 percent of European imports, instead of 10 percent currently.
Partnership Driven by “Historic Relationships”
And on Saturday, Schulz met with Saudi Crown Prince Mohammed bin Salman in Jeddah, while on Sunday he met with the President of the United Arab Emirates, Sheikh Mohammed bin Zayed, while concluding his Gulf tour in Qatar, Monday.
The expert on Middle East affairs, Fawaz bin Kasib Al-Anzi, said that the Gulf countries “can help Germany face the harsh winter”, especially since it has “old historical relations” with Berlin.
The Saudi analyst added, “The partnership is pushing Saudi Arabia to extend its hand to Germany in exporting part of the conventional energy, as well as Qatar has abundant gas and can help.”
Schulz’s visit also reflects the “historic relations” between Germany and the Gulf countries, which are considered a center of gravity in the field of energy, at a time when the Kingdom depends on the import of some German industries, and this pushes Riyadh to “maintain global energy security” as a result of the Russian war on Ukraine through Helping Germany, Al-Enezi says in his interview with Al-Hurra website.
There was no statement on the content of the German chancellor’s meeting with the Saudi crown prince, but the German channel NTV quoted Schulz as saying: “We have long-term economic and political relations with the Kingdom of Saudi Arabia, so it is important … our presence here today and in the other stations of the My tour is to continue talking about the development of the region and the opportunities for economic relations, but also the political challenges that lie ahead.”
In the Emirates, political analyst, Mohammed Taqi, believes that Abu Dhabi can support Germany in the field of energy “based on common interests, just as happened with France.”
He told Al-Hurra that Abu Dhabi is “in the stage of strengthening relations” with Berlin, suggesting that the current German leadership will put “its interest above any consideration.”
In contrast to his visit to Saudi Arabia, Schulz signed an agreement in the UAE to provide the energy-rich Gulf country, the European country, with liquefied gas and diesel in 2022 and 2023, the UAE government news agency reported.
The agreement provides for the export of a shipment of liquefied natural gas to Germany in late 2022, then the supply of additional shipments in 2023.
The agency announced the completion of a direct delivery of a shipment of diesel this September, and an agreement to supply up to 250,000 tons per month of diesel fuel during 2023.
Economic agreements or political bias?
As for Qatar, Berlin has already entered into previous talks with Doha to buy LNG shipments without reaching tangible results.
Qatari analyst, Ali Al-Hail, explains that, “Germany wants to sign short-term contracts, and Qatar refuses this because its contracts with China, India, Japan and Korea are up to 25 years, and for this reason the agreement was not reached.”
He told Al-Hurra website, prior to Schulz’s arrival in Qatar, that “Germany and the European Union this time will suffer greatly, because winter is knocking on doors” at a time when Russian gas flows have stopped.
Despite Germany signing an agreement with the UAE, the Qatari analyst sees the difficulty of “compensating” Russian gas for Europe in general, given that Russia is close and can supply the continent through pipelines, in addition to the availability of quantities in abundance and “the cheap price of Russian gas compared to Qatar, the UAE and Algeria.”
Al-Hail questioned the mechanism of transporting Qatari gas to Germany and then transferring it to Europe, a matter that “poses a complex problem,” noting that “transporting liquefied gas on ships takes a long time, unlike pipelines.”
The Nord Stream 1 pipeline transports 55 billion cubic meters of gas annually from Russia to Germany under the Baltic Sea, but Russia halted gas flows in July due to a “maintenance operation”, Moscow says.
Al-Hail said that the need for Russian gas “remains yesterday and is better (for the European continent) than relying on other gas sources.”
Following the Kremlin’s invasion of Ukraine last February, Europe began to search for alternatives to Russian energy sources after Western countries targeted Moscow with severe sanctions.
“The current big challenge is certainly the situation the world is going through in the wake of the Russian attack on Ukraine. This has international consequences,” Schulz told reporters before arriving in the UAE.
“I made it clear that it is important for us to support Ukraine in defending its security and sovereignty and that we will continue to do so, and that Russia should withdraw its forces,” he added.
Gulf energy flows to Germany open the door to serious questions about the Gulf states’ political stance on the war in Ukraine.
The Gulf states had called for an end to the war and a political settlement, but they avoided direct criticism of Moscow in light of the growing economic relations with it, especially cooperation on the issue of oil production through the “OPEC Plus” group led by Saudi Arabia and Russia.
While Al-Enezi and Taqi agree that any flow of energy shipments to Germany will be “purely economic”, Al-Hail believes that Russia will “see it as the bias of the three countries with the European Union, which entered a direct party in the Ukraine war.”
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