Gas Pains?

Are we about to go to war over a pipeline?

Tiny Qatar has spent $3 billion supporting Syria’s Islamist rebels. Saudi Arabia supports them as well. Why? One reason is natural gas. Qatar is one of the largest exporters of natural gas in the world, and wants to expand its sales to Europe. Profits from pipeline sales are much greater than those from liquefied natural gas (LNG). But Assad won’t allow a pipeline that would supply Persian Gulf gas to European consumers to routed over Syrian territory.

Russia already supplies gas to Europe via Gazprom, and has been willing to use these sales as a way to leverage its foreign policy objectives. So it makes sense that they would oppose any action that might threaten their market position. If Assad continues to block the pipeline, that’s good for them.

There are a host of other issues at stake in the Syrian conflict: religion, chemical weapons, and others. But the geopolitics of energy is also a factor. It just adds one more complication to this complex conflict.

Douglas R. Tengdin, CFA

Chief Investment Officer

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