Japanese firms cautiously watching Saudi-Qatar crisis
June 11, 2017
Tokyo- Japanese companies have grown vigilant about the possible adverse effects of the Saudi-Qatar crisis on their businesses. On Monday, Saudi Arabia and its regional allies, such as Egypt and United Arab Emirates, announced they would sever their diplomatic ties with Qatar, blaming Doha for supporting terrorism. As of Saturday, a total of nine Middle Eastern and African countries had cut their relations with Qatar.
As Japan imports 9 pct of crude oil and 13 pct of liquefied natural gas from Qatar, a number of Japanese company, many of which are related to resources businesses, are active in the country. According to Foreign Ministry data, there were 46 Japanese business footholds there as of October 2015.
"We were stunned (by the abrupt severance of ties with Qatar)," said a person involved in Japan's trade policy management.
Although most of trading firms see "no immediate impact," concerns over long-term effects are spreading, industry officials pointed out.
Marubeni Corp. which has been importing LNG from the Persian Gulf nation and selling it to electricity and other companies since 1996, is worried about the possibility of its officials having difficulty going back and forth between Tokyo and the UAE capital of Dubai, where the major Japanese trading house has its Mideast business headquarters.
"At this point we can do nothing but gather information," said a Marubeni public relations official. "Qatar is an important country for us," the official added.
"If (the Saudi-Qatar crisis) prolongs, some influences may be seen in spot LNG prices, among others," said Toshihiro Sano, president of TEPCO Fuel & Power Inc., a unit of Tokyo Electric Power Company Holdings Inc. that has been purchasing a huge volume of LNG through a joint firm with Chubu Electric Power Co.
Sano thus emphasized the importance of diversifying procurement sources.
An official of Obayashi Corp. said the company is closely watching the situation in Qatar, where the general contractor is constructing a hotel-commercial complex.
Many other companies in the construction industry are also keeping a close eye on the Qatar problem as many infrastructure projects are going on in the host country for the 2022 FIFA World Cup, people familiar with the matter said.
"It already has become difficult to travel to Qatar, to some extent," said Daisuke Yonekura, acting chief of the Japan External Trade Organization's Middle East and Africa division.
"Unless the crisis ends early, Japanese companies active in Qatar would find it impossible to send necessary materials to their local footholds," he warned. (Jiji Press)
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