Qatar downgraded over Gulf dispute

Moody’s Investors Service today downgraded Qatar’s credit rating  from stable to negative amid fears that its ongoing dispute with its neighbours is unlikely to to be resolved soon and could have a long-term economic and financial impact. 
The dispute between Qatar and a group of fellow  Arab states comprised of Saudi Arabia, the UAE, Bahrain and Egypt,  centres around its alleged support for terrorism in the region and has seen the severance of diplomatic relations, the closing of  land, sea and air links, and the expulsion of Qatari nationals.
Nervousness over the situation has seen Qatar’s share index sink by 11.9% since the crisis flared up in early  June,  with the trade blockade casting a shadow over a raft of major construction and civil engineering projects, including a new port, a medical zone, a metro project and eight stadiums for the 2022 World Cup  whose completions are dependent on the import of  key materials such as concrete and steel.
Several business deals have also been affected, with the Saudi Al-Ahli football team cancelling a sponsorship deal with Qatar Airways.
The Saudi-led coalition  has presented Qatar with a list of 13 demands it  needs to meet if the embargo is to be lifted, including the closing of the Al Jazeera satellite television channel. Although Doha has said it is willing to  entered into talk with its neighbours, it has  also warned that it will not be dictated to,  and has moved to counteract the effect of the embargo by strengthening ties with Turkey and Iran; and  yesterday the state-owned Qatar Petroleum also  announced plans to raise LNG capacity by 30%.
Qatar is one of the the world’s largest producers of natural gas  whose biggest customers include Japan, South Korea and India. It also sells gas to the UAE, and the pipeline running between the two countries has continued to flow despite the current situation, carrying  about two billion cubic feet of gas per day and  meeting about 30% of the UAE’s energy needs.
 Moody’s said that it had  downgraded its Aa3 outlook on Qatar to negative from stable, saying “the likelihood of a prolonged period of uncertainty extending into 2018 has increased and a quick resolution of the dispute is unlikely over the next few months.”

Source: gulfnews