Middle East's Bargaining Power Weakened Amid Escalating US-Iran Conflict
The ongoing conflict between the U.S. and Iran has weakened the negotiating power of Qatar and the UAE, two major liquefied natural gas (LNG) exporters in the Middle East.
This is because the escalating tensions have reduced the export reliability of these countries due to difficulties exporting goods through the Strait of Hormuz and Iranian attacks on neighboring countries' energy infrastructure.
As a result, European LNG importers are seeking better terms in future long-term deals, including lower prices and greater contractual flexibility from suppliers.
Nicola Monti, CEO of Italian utility Edison, said that anyone signing new contracts in the Gulf region must factor in potential insurance costs, which are inevitably set to rise due to war risks.