Saudi Arabia dwarfs Qatar on almost any measure, yet there are plenty of ways the tussle between the Gulf neighbors could end up hurting the world’s biggest oil exporter — even if it wins.
All last week the Saudis and their allies ratcheted up pressure on Qatar, cutting diplomatic ties and imposing a blockade by land, sea and air. The stated goal is to force Qatar to stop cozying up to Saudi Arabia’s rival, Iran, and bankrolling hardline Muslim groups across the region.
Qatar says it is being punished for things it did not do, and the US signaled on Friday last week that it wants the embargo eased.
Illustration: Mountain People
The disagreement over Qatar is longstanding. The scale of the current crisis is new, and it has erupted into a Middle East already polarized by war.
Saudi Arabia has struggled to impose its will in Syria and Yemen. Now discord has spread to the inner circle of Gulf monarchies, at a time when the Saudis and Deputy Crown Prince Mohammed bin Salman, who serves as chairman of the Council for Economic and Development affairs, are urgently seeking foreign investment to modernize an oil-dependent economy.
“Most worrying is that Saudi Arabia and the UAE [United Arab Emirates] may repeat the mistakes that were made when the Saudi leadership decided to launch a war in Yemen,” said Yezid Sayigh, a Beirut-based senior fellow at the Carnegie Endowment for International Peace. “They had no clear political strategy, based their action on false assumptions, have incurred heavy financial costs and a growing human toll, and are probably now worse off in terms of their security.”
As in other regional clashes, external powers are being drawn into the Gulf quarrel, not all of them on Saudi Arabia’s side.
US President Donald Trump on Friday said that he backed a Saudi Arabia-led movement to isolate Qatar over its funding of extremist groups, but the Pentagon and the US Department of State have taken a more neutral position.
Little more than one hour before Trump spoke at the White House, US Secretary of State Rex Tillerson called for the curbs to be eased, saying it was causing food shortages and hindering the fight against the Islamic State group.
US aircraft use a base in Qatar, one of the largest US military facilities overseas, for those operations.
Turkey has accelerated pre-existing plans to deploy some troops to Qatar, and Iran offered alternative transport routes and supplies of staple goods that can no longer be imported from Saudi Arabia. Their backing reduces the chance of a quick Saudi victory.
“Turkey has a powerful military,” said Paul Sullivan, an adjunct professor of security at Georgetown University in Washington and a Middle East specialist.
“Iran is sending water and food,” he said. “So now we have two significant forces supporting Qatar.”
From the Saudi viewpoint, Qatar has been stirring up trouble all over. That includes promoting the Muslim Brotherhood, whose advocacy of Islam through the ballot box is disliked by some Gulf monarchs. It includes cordial ties to Iran, with which Qatar shares a giant gas field. It includes sponsoring the al-Jazeera TV network, which has been critical of Saudi allies.
Rounding up the charge-list: Support for the Islamic State group and al-Qaeda — something the Saudis have also been accused of and, like Qatar, deny.
“Qatar for many years has taken steps to support certain organizations and intervened in situations,” Saudi Minister of Foreign Affairs Adel al-Jubeir said on Wednesday last week.
“We view Qatar as a brother state,” he said. “But you have to be able to tell your friend or your brother what is right or wrong.”
The Saudis and UAE have hinted they will take further steps to make the point, including curbs on bank lending to Qatar and transactions in the riyal. The dispute has begun to affect European energy markets: Natural gas prices soared as two tankers full of Qatari fuel changed course away from the Mediterranean Sea — possibly to avoid transiting the Suez Canal, operated by Saudi ally Egypt.
Gas-rich Qatar also has financial resources of its own to withstand a siege. Its US$335 billion sovereign wealth fund owns stakes in global companies from Volkswagen to Barclays.
Qatar will be motivated to resist by the perception that what the Saudis are really after is regime change, according to Sanam Vakil, associate fellow with the Middle East and North Africa Program at Chatham House in London.
Insisting “that Qatar capitulate on these demands is a challenge to its sovereignty” and therefore the legitimacy of the ruling family, Vakil said.
“I find it hard to believe they will just roll over,” he said.
So far, they have not. Week one of the standoff ended with Qatar defiant. Food imports that usually come across the Saudi border have been sourced elsewhere, Qatari Minister of Foreign Affairs Sheikh Mohammed bin Abdulrahman Al Thani told reporters in Doha.
“We can live forever like this,” he said. “We aren’t ready to discuss an intervention into our sovereignty.”
That does not mean the pressure will not tell eventually. The Saudi economy is four times bigger than Qatar’s. Its population is more than 10 times larger, and that internal market helps insulate the Saudis from any fallout, said James Reeve, a London-based senior economist at Samba Financial Group.
Stock markets share that view of who is more at risk. The main Saudi index was little changed at the end of last week; Qatar’s had fallen more than 7 percent.
Still, “any dispute of this type is likely to mar the investment climate for all countries,” Reeve said. “Investors will be reminded that this is a region where political issues can flare up unexpectedly.”
Saudi Arabia can ill afford instability in the Middle East, particularly of its own creation, at a time is it seeking to raise billions of dollars from foreign investors by selling shares of its oil giant, Saudi Aramco.
UAE Minister of Foreign Affairs Anwar Gargash, in an interview on Wednesday last week, acknowledged that the Gulf’s reputation as a stable destination for capital could take a hit.
“I can’t deny that this rift has its toll,” he said.
However, there was no alternative to confronting Qatar, because the other five members of the Gulf Cooperation Council [GCC] cannot trust a partner that’s “going to be duplicitous in his policies,” he said.
On Friday, Gargash again rebuked Qatar on Twitter, saying any solution must be found “through diplomacy, not by resorting to Iranian or Turkish ‘allies.’”
If Qatar wants to fight back, it could threaten to pull out of the GCC, according to Theodore Karasik, a senior adviser at Gulf State Analytics and an adjunct senior fellow at the Lexington Institute in Washington.
That would strike at Saudi efforts toward closer union, he said.
“Qatar could begin the process of exiting from the group,” Karasik said.
“This would be a powerful message to all interested parties,” and would likely win behind-the-scenes backing from Turkey, Iran and even Russia, he said.
Another GCC member, Kuwait, is leading the effort to ensure things do not reach that point. Its ruler traveled to Saudi Arabia and Qatar last week for discussions that have not yet been made public.
Trump on Thursday offered Tillerson as a mediator.
The US president himself is widely seen as having emboldened the Saudi camp. Trump has vowed to take a tougher line on Iran, and hailed Saudi King Salman bin Abdulaziz Al Saud as a key partner.
That is one reason why, when the Islamic State group struck at the heart of Tehran for the first time last week, Iran’s Revolutionary Guard Corps promptly blamed Saudi Arabia and the US, and promised revenge — another example of how battle-lines across the Middle East are hardening.
The Gulf monarchies now at loggerheads were among “the last somewhat peaceful places in the region,” Sullivan said. “I’m getting worried.”
Additional reporting by staff writer
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