How Will Gulf Crisis Play Out? Watch Asia's Energy Markets

An Indonesian oil tanker
An Indonesian oil tanker
David Fickling

Forget the Strait of Hormuz.

The real place to watch the simmering diplomatic battle between Saudi Arabia and Qatar is 5,500 kilometers to the southeast, in the Strait of Malacca between Malaysia and Indonesia. That's because the petroleum market's center of gravity, along with that of the global economy, is in Asia these days. As recently as the 2003 Iraq War, the U.S. and Europe accounted for more than half of the world's oil imports. The share has now fallen to barely more than one-third, as imports by the north Atlantic countries have stood still while those by China, India, South Korea and the Philippines have surged.

That makes the stance of Qatar's major Asian trading partners — Japan, South Korea, India and Taiwan — a crucial factor in how the embargo will play out. More than half of the Emirate's liquefied natural gas exports go to those four countries, or about two-thirds if you add China and Thailand.

To see how this might play out, it's worth considering the dynamics of Asia's gas market, and the differing degrees to which the countries are dependent on Qatar and its Arab rivals.Take Japan. It's Qatar's largest export destination and the buyer of almost a fifth of its traded gas — but Australia and Malaysia are its more important gas suppliers, with the Emirate accounting for just 17% of imports in 2015 and as little as 12% in recent months. Saudi Arabia, by contrast, supplies close to 40% of Japan's crude.

During President Trump's visit last month to Saudi Arabia — Photo: The White House

The disparity is heightened by the fact that Japan is short of oil, and awash in natural gas. Its re-gasification plants are running at about 44% of capacity compared to 88% at its oil refineries. Should Jera Co. choose this moment to press its long-standing case for renegotiation of gas contract terms with Qatar Petroleum, it could find itself with a great deal of short-term leverage.It wouldn't be the first time that the politics of the Middle East have spilled over into Japan's domestic energy sector. A planned government-brokered merger between refiners Showa Shell Sekiyu KK and Idemitsu Kosan Co. foundered last year after Idemitsu's founding family opposed the deal citing Showa Shell's Saudi links.

Taiwan and India depend on Qatar for about half of their gas import

That said, Qatar has some significant cards up its sleeve. While the value and volume of Asia's oil imports may dwarf its gas trade, gas consumers would be wise to be circumspect about taking advantage of the blockade.Even in a country like Japan, where oil-based power generation accounts for an outsized share of the electricity market, losing crude supply mostly pushes up costs for factories and drivers. Losing natural gas supply, by contrast, risks blackouts. Against that backdrop, Asia's utilities are unlikely to want to upset relations with a key supplier by preying on its misfortunes — especially after Qatar's dominance of the global market was reasserted in April by the country's decision to lift a moratorium on the development of its North Field.

There's another point to consider. Japan is unusual in Asia for the diversity of its natural gas supply. Taiwan and India each depend on Qatar for about half of their gas imports, while South Korea isn't far behind on 36%. India and China, meanwhile, are major buyers of Iranian oil, which makes it unlikely they'll be willing to pick sides in what is ultimately a proxy for the deeper dispute between Riyadh and Tehran.

The forces on both sides are finely balanced. Any player who wants to upset the board by using the present crisis to press home an advantage should think carefully before making their move.

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!

How Thailand's Lèse-Majesté Law Is Used To Stifle All Protest

Once meant to protect the royal family, the century-old law has become a tool for the military-led government in Bangkok to stamp out all dissent. A new report outlines the abuses.

Pro-Democracy protest at The Criminal Court in Bangkok, Thailand

Laura Valentina Cortés Sierra

"We need to reform the institution of the monarchy in Thailand. It is the root of the problem." Those words, from Thai student activist Juthatip Sirikan, are a clear expression of the growing youth-led movement that is challenging the legitimacy of the government and demanding deep political changes in the Southeast Asian nation. Yet those very same words could also send Sirikan to jail.

Thailand's Criminal Code 'Lèse-Majesté' Article 112 imposes jail terms for defaming, insulting, or threatening the monarchy, with sentences of three to 15 years. This law has been present in Thai politics since 1908, though applied sparingly, only when direct verbal or written attacks against members of the royal family.

But after the May 2014 military coup d'état, Thailand experienced the first wave of lèse-majesté arrests, prosecutions, and detentions of at least 127 individuals arrested in a much wider interpretation of the law.

The recent report 'Second Wave: The Return of Lèse-Majesté in Thailand', documents how the Thai government has "used and abused Article 112 of the Criminal Code to target pro-democracy activists and protesters in relation to their online political expression and participation in peaceful pro-democracy demonstrations."

Criticism of any 'royal project'

The investigation shows 124 individuals, including at least eight minors, have been charged with lèse-majesté between November 2020 and August 2021. Nineteen of them served jail time. The new wave of charges is cited as a response to the rising pro-democracy protests across Thailand over the past year.

Juthatip Sirikan explains that the law is now being applied in such a broad way that people are not allowed to question government budgets and expenditure if they have any relationship with the royal family, which stifles criticism of the most basic government decision-making since there are an estimated 5,000 ongoing "royal" projects. "Article 112 of lèse-majesté could be the key (factor) in Thailand's political problems" the young activist argues.

In 2020 the Move Forward opposition party questioned royal spending paid by government departments, including nearly 3 billion baht (89,874,174 USD) from the Defense Ministry and Thai police for royal security, and 7 billion baht budgeted for royal development projects, as well as 38 planes and helicopters for the monarchy. Previously, on June 16, 2018, it was revealed that Thailand's Crown Property Bureau transferred its entire portfolio to the new King Maha Vajiralongkorn.

photo of graffiti of 112 crossed out on sidewalk

Protestors In Bangkok Call For Political Prisoner Release

Peerapon Boonyakiat/SOPA Images via ZUMA Wire

Freedom of speech at stake

"Article 112 shuts down all freedom of speech in this country", says Sirikan. "Even the political parties fear to touch the subject, so it blocks most things. This country cannot move anywhere if we still have this law."

The student activist herself was charged with lèse-majesté in September 2020, after simply citing a list of public documents that refer to royal family expenditure. Sirikan comes from a family that has faced the consequences of decades of political repression. Her grandfather, Tiang Sirikhan was a journalist and politician who openly protested against Thailand's involvement in World War II. He was accused of being a Communist and abducted in 1952. According to Sirikhan's family, he was killed by the state.

The new report was conducted by The International Federation for Human Rights (FIDH), Thai Lawyer for Human Rights (TLHR), and Internet Law Reform Dialogue (iLaw). It accuses Thai authorities of an increasingly broad interpretation of Article 112, to the point of "absurdity," including charges against people for criticizing the government's COVID-19 vaccine management, wearing crop tops, insulting the previous monarch, or quoting a United Nations statement about Article 112.

Juthatip Sirikan speaks in front of democracy monument.

Shift to social media

While in the past the Article was only used against people who spoke about the royals, it's now being used as an alibi for more general political repression — which has also spurred more open campaigning to abolish it. Sirikan recounts recent cases of police charging people for spreading paint near the picture of the king during a protest, or even just for having a picture of the king as phone wallpaper.

The more than a century-old law is now largely playing out online, where much of today's protest takes place in Thailand. Sirikan says people are willing to go further on social media to expose information such as how the king intervenes in politics and the monarchy's accumulation of wealth, information the mainstream media rarely reports on them.

Not surprisingly, however, social media is heavily monitored and the military is involved in Intelligence operations and cyber attacks against human rights defenders and critics of any kind. In October 2020, Twitter took down 926 accounts, linked to the army and the government, which promoted themselves and attacked political opposition, and this June, Google removed two Maps with pictures, names, and addresses, of more than 400 people who were accused of insulting the Thai monarchy. "They are trying to control the internet as well," Sirikan says. "They are trying to censor every content that they find a threat".

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!