[Choi Ji-woong's Energy War] The Hidden Power of the Qatar World Cup: 'Natural Gas'

Increase in Qatar's Natural Gas Supply Value
A Turning Point for Diplomatic and Economic Role in Major World Cup Event

The relationship between the inflation that shook the global economy this year and the 2022 Qatar World Cup currently heating up the world is strangely reminiscent of about 40 years ago. Over 40 years ago, the global economy was going through an even more severe wave of inflation than now. The main cause of inflation at that time, as it is now, was oil prices. The 1970s was a period when the entire world was accelerating industrialization, and naturally, the demand for crude oil surged. On the other hand, the oil production of the United States, the world's largest oil producer at the time, began to decline around 1970. This supply-demand imbalance eventually led to the first oil shock. Even after the first oil shock, oil prices continued to rise until the early 1980s, becoming a major cause of high inflation.

Then as now, controlling oil prices is a prerequisite for easing inflation. At that time, U.S. President Jimmy Carter visited Iran in December 1977 and requested Shah Pahlavi to increase oil production. In response, Shah Pahlavi asked not to interfere in his country's human rights issues as a condition for cooperating in stabilizing oil prices. President Carter pursued human rights diplomacy and seriously addressed human rights issues in various countries. However, he was lenient toward Iran. At that time, the Pahlavi monarchy operated a secret police organization called SAVAK, ruthlessly suppressing opposition forces and violently quelling several anti-government protests, resulting in a huge number of casualties. Nevertheless, Carter praised Shah Pahlavi's remarkable leadership, saying that Iran had become an "island of stability" thanks to that leadership. The contradiction in this diplomatic rhetoric was as great as the urgent need for Iran's cooperation in the oil market. At that time, Iran was a major oil producer accounting for about 10% of the world's oil production.

President Carter's visit to Iran in 1977 is reminiscent of President Joe Biden's visit to Saudi Arabia in July this year. During his candidacy, President Biden raised issues about Saudi Arabia's human rights situation and strongly criticized the Saudi royal family. However, as oil prices surged above $100 per barrel this year, he changed his stance. He visited Saudi Arabia, which he had said he would "ostracize," awkwardly exchanged fist bumps, and requested increased oil production.

Jiwung Choi, Researcher at Korea National Oil Corporation Smart Data Center

Thus, the function of human rights and energy has been a recurring exam question. This issue is now appearing in Qatar as well. Criticism has been continuously raised that thousands of people died during the infrastructure construction for hosting the Qatar World Cup, and that women and minorities are discriminated against. As public criticism of Qatar's human rights issues increased, Gianni Infantino, president of the International Federation of Association Football (FIFA), claimed that such criticism was hypocritical and argued that the World Cup could be held even in North Korea.

Unfortunately, such criticism is likely to remain a storm in a teacup. Not only the FIFA president but also world leaders remain silent, and it is likely to continue that way. Qatar is a major natural gas producer. It is also the country from which South Korea imports the most natural gas. Since last year, natural gas prices have been soaring, and the strategic value of Qatari natural gas is growing. For this reason, in March, the United States designated Qatar as a major non-NATO ally, strengthening strategic alliance relations. Europe also desperately needs cooperation with Qatar to reduce dependence on Russian natural gas. At a time when Qatar's importance in the natural gas supply chain is increasing, a large event like the World Cup can be an opportunity for Qatar to rise as an important member of the international community both diplomatically and economically. We now live in a world where oil and gas dominate diplomacy and the economy, just as they did over 40 years ago.

Choi Ji-woong, Researcher at Korea National Oil Corporation Smart Data Center