The transport and diplomatic embargo of Qatar, announced
early in June, has oilfield services companies worried about
their supplies of drilling fluid materials, but others see an
opportunity for Iran to jump start its long-moribund mineral
On June 5 Qatar’s nearest neighbours cut off
all transport to the country, as well as severing diplomatic
links, over the Gulf nation’s alleged funding of
terrorism, and its supposed closeness with both the Muslim
Brotherhood and the government of Iran.
Participants in the embargo include Saudi Arabia, which
shares Qatar’s only land border, as well as
Bahrain, which lies a short distance away in the Gulf, and the
United Arab Emirates, which contains the regional hub port of
Ties were also cut by Egypt, the Maldives, Comoros,
Mauritania, the self-declared republic of Somaliland, the
internationally-recognised government in Yemen, and the Tobruk
government in Libya.
Qatar’s port service has scrambled to establish
new routes, which avoid the Dubai hub. Shipping giants Maersk
of Denmark and MSC have already announced that it they will
accept bookings for container shipments from nearby Oman,
which has remained neutral in the spat.
But the move raised concerns among drilling fluid providers,
as to whether they would be able to source oilfield minerals
for use in Qatar’s oil and gas industry.
|The Oryx GTL (gas to liquids) plant Qatar. Qatar
the richest country in the world, partly due to its
and gas reserves- part of the largest gas formation
in the world lies in its waters. But its perceived
relationship with terrorist groups has led to its
neighbours cutting diplomatic and transport ties,
leading to a slowing in oilfield mineral deliveries
such as barytes.
SASOL, via Wikimedia
Fears of a barytex squeeze
As of 2014, Qatar was the world’s fourth-ranked
natural gas producer, after Russia, and the 17th ranked oil
producer, according to the CIA World Fact book.
Energy exports have made Qatar the richest country per
capita in the world, as of 2016, according to IMF
One major oilfield services company told IM
that thanks to cargoes being booked before the start of the
crises, there were three month’s stock of barytes
(barite) in Qatar.
Barytes is a crucial ingredient in drilling muds, used as a
weighting agent to maintain formation pressure.
He noted that India, the major supplier of barytes to the
Gulf region, does most of its business with Saudi Arabia, which
spearheaded the embargo, potentially discouraging shipments to
But another barytes consumer noted that demand in Qatar had
been supressed since the start of 2017, due to low natural gas
Iran stands to benefit
One exporter which could benefit from a squeeze in barytes
supplies in Qatar is Iran.
Qatar’s close proximity to Iran, and the fact
that it shares access to the South Pars field, makes it a
tempting market for Iranian exporters.
The US Geological survey sees Iran’s barytes
reserves at 24m tonnes, the fifth largest in the world, but
production has long been squeezed by US sanctions, which
restricted access to funding, equipment, and
With sanctions significantly relaxed in the wake of the
nuclear deal last year, several market participants pointed to
Iran as a possible source of barytes.
US-based companies operating in Qatar are still prevented
from buying Iranian exports, but other players see a way out of
their current quandary.
"The Qataris have been supplying from Iranian companies
before, but it was very low," an Iranian exporter told
An Indian exporter pointed to Iran as a potential competitor
across the Gulf region.
"From a product perspective you can’t write it
off," he said, noting that Iran can supply "quite a range of
grades". "I see no reason it can’t [be a major
competitor] he said.
This article was first published
on 23 June.