Saudis Lead Push to Isolate Qatar, a Fellow U.S. Ally

The fallout from Monday’s shock move by four U.S. Arab allies to isolate Qatar over its ties to Iran was felt across the region on Monday, as flights were canceled and Qatari stocks plunged the most since 2009.

Saudi Arabia banned all Qatari planes from landing in the kingdom and will bar them from its airspace as of Tuesday, the official Saudi Press Agency reported. Abu Dhabi’s state-owned carrier Etihad Airways and Dubai’s Emirates said they would suspend all flights to and from Qatar’s capital, Doha, from Tuesday, with the U.A.E.’s low-cost carriers Air Arabia and Flydubai also following suit.

The decision by Saudi Arabia, Bahrain, the United Arab Emirates and Egypt to punish the Gulf Cooperation Council member over its support for Islamist groups -- as well as their key rival, Iran -- pits some of the world’s richest nations in a struggle for regional dominance. Qatar’s population is smaller than Houston’s, but it has a sovereign wealth fund with stakes in global companies from Barclays Plc to Credit Suisse Group. It’s also a home to the forward headquarters of the U.S. military’s central command in the region.

While the escalation is unlikely to affect energy exports from the Gulf, it threatens to have far-reaching effects on Qatar and raises the political risk for the Middle East, a region grappling with wars from Syria to Yemen. Secretary of State Rex Tillerson said the U.S. stands ready to help defuse the tension..

Qatar for years positioned itself as a mediator of regional conflicts now it is Qatar that is in need of mediation. (Kuwait & Oman may help)

— سÙطا٠سعÙد اÙÙاسÙÙ (@SultanAlQassemi) June 5, 2017

“It’s not in the U.S.’s interest to see the GCC sort of unravel,” Allison Wood, an analyst with Control Risks in Dubai, said. “That would be very destabilizing in a region that’s already very unstable. There are limits to the U.S. giving tacit approval to the kind of pressures that are being applied.”

Defiance

Qatar’s first response struck a defiant tone. The Foreign Ministry called the accusations “baseless” and said they were part of a plan to “impose guardianship on the state, which in itself is a violation of sovereignty.”

Qatar’s QE Index for stocks tumbled 7.3 percent at the close in Doha, the most since 2009. Qatar’s credit risk, measured by credit default swaps, climbed the most globally. Saudi Arabia, Egypt and Dubai were also among the worst six performers on the day, according to data compiled by Bloomberg.

“There are going to be implications for people, for travelers, for business people. More than that, it brings the geopolitical risks into perspective,” Tarek Fadlallah, the chief executive officer of Nomura Asset Management Middle East, said in an interview to Bloomberg Television. “Since this is an unprecedented move, it is very difficult to see how it plays out.”

The Saudis also accused Qatar of supporting “Iranian-backed terrorist groups” operating in the kingdom’s eastern province as well as Bahrain.

While Qatar maintains diplomatic and economic ties with Iran, it’s not clear how close the two countries are, and none of the statements issued on Monday offered evidence of deep cooperation. Saudi Arabia also accused Qatar of supporting “terrorist groups aiming to destabilize the region,” including the Muslim Brotherhood, Islamic State and al-Qaeda.

Iran’s Comment

Iranian Foreign Minister Mohammad Javad Zarif stepped into the fray, saying on Twitter that “coercion” would not lead to a solution.

“Neighbors are permanent, geography can’t be changed,” he said.

The five key countries involved in the dispute are U.S. allies, and Qatar has committed $35 billion to invest in American assets. The Qatar Investment Authority, the country’s sovereign wealth fund, plans to open an office in Silicon Valley.

Read More: Why Tiny Qatar Angers Saudi Arabia and Its Allies: QuickTake Q&A

Tillerson, speaking at a news conference in Sydney, said it was important that the Gulf states remain unified and he encouraged the parties to address their differences. He said the crisis won’t undermine the fight on terrorism.

“What we’re seeing is a growing list of some irritants in the region that have been there for some time,” Tillerson said. “Obviously they’ve now bubbled up to a level that countries decided they needed to take action in an effort to have those differences addressed.”

Monday’s actions escalate a crisis that started shortly after President Donald Trump’s trip last month to Saudi Arabia, where he and King Salman singled out Iran as the world’s main sponsor of terrorism.

Verbal War

Three days after Trump left Riyadh, the state-run Qatar News Agency carried comments by Qatari ruler Sheikh Tamim bin Hamad Al Thani criticizing mounting anti-Iran sentiment. Officials quickly deleted the comments, blamed them on hackers and appealed for calm.

Saudi and U.A.E. media outlets then launched verbal assaults against Qatar, which intensified after Sheikh Tamim’s phone call with Iranian President Hassan Rouhani over the weekend in apparent defiance of Saudi criticism.

Past Crisis

Disagreements among the six GCC members have flared in the past, and tensions with Qatar could be traced to the mid-1990s when Al Jazeera television was launched from Doha, providing a platform for Arab dissidents to criticize autocratic governments in the region --except Qatar’s.

GCC members Kuwait and Oman have so far maintained their diplomatic and commercial ties with Qatar.

Qatar also played a key role in supporting anti-regime movements during the Arab Spring, and acted against Saudi and U.A.E. interests by bankrolling the Muslim Brotherhood’s government in Egypt. Qatar also hosts members of the exiled leadership of the Iranian-backed Hamas militant group that rules the Gaza Strip.

In 2014, Saudi Arabia, the U.A.E. and Bahrain temporarily withdrew their ambassadors from Qatar. That dispute centered on Egypt following the army-led ouster of Islamist President Mohamed Mursi, a Muslim Brotherhood leader.

This time, Saudi Arabia, along with Bahrain and the U.A.E., gave Qatari diplomats 48 hours to leave.

The crisis comes shortly after Moody’s Investor Service cut Qatar’s credit rating by one level to Aa3, the fourth-highest investment grade, citing uncertainty over its economic growth model.

Read More: Qatar Wealth Fund’s Expansion Undeterred by Brexit, Trump

“Qatar is economically and socially most vulnerable from food and other non-energy imports,” said Paul Sullivan, a Middle East expert at Georgetown University. “If there is a true blockade, this could be a big problem for them. Rules stopping citizens of the U.A.E., Saudi Arabia and Bahrain from even transiting via Qatar could cause significant disruptions.”

 feeder wrote:
Just hearsay, but the story is that important Qatari persons were secretly recorded stating that Saudi Arabia funds terrorism. When the recording were public Saudi and Egypt went "Nuh-uh! You fund terror!"

 Shadow Captain Edithae wrote:
Can we please do the same to Saudi Arabia?

 Ouze wrote:

 feeder wrote:
Just hearsay, but the story is that important Qatari persons were secretly recorded stating that Saudi Arabia funds terrorism. When the recording were public Saudi and Egypt went "Nuh-uh! You fund terror!"

Saudi Arabia and Qatar arguing about who sponsors terrorism is literally 2 guys in an elevator, who both farted, blaming each other for the smell.

 feeder wrote:
Just hearsay, but the story is that important Qatari persons were secretly recorded stating that Saudi Arabia funds terrorism. When the recording were public Saudi and Egypt went "Nuh-uh! You fund terror!"

Also the Qatar head of state is a member of the Saudi royal family (cousin or something) so it's entirely possible this is all stupid peen waving among them who have something very old and personal to settle.

Secretary of State Rex Tillerson said the U.S. stands ready to help defuse the tension..

 General Annoyance wrote:

This also probably means I won't be able to visit my parents. Yay.

 d-usa wrote:
If we can focus on the important issues for a minute:

Does that mean we may be able to not have the World Cup in Qatar?

 d-usa wrote:
If we can focus on the important issues for a minute:

Does that mean we may be able to not have the World Cup in Qatar?

 Humble Guardsman wrote:
As someone who lived in the U.A.E. for 5 years, and Qatar for 1, I can definitely say that they never gave the impression of an ultra-Wahhabist state that Saudi Arabia did. If anything Doha was trying (and failing despite the massive amount of funds) to emulate the international modernistic vibe of Dubai.
Also, the Saudi kids were notorious d***heads at our school.

 Humble Guardsman wrote:
Saudi Arabia is looking to expand its control over the region, through close alliances with states like the Emirates and Egypt but more recently with asserting its control over Yemen and Qatar. During the Arab Spring they took advantage of the civil unrest in Bahrain to cement their control over that region by using military force to crush a pro-democratic movement and shore up a pro-Saudi kingdom. They've had their eye on the immense wealth of Qatar for a long time now and it is likely that they received the permission, if not the approval, of the US during Trump's visit to the region. I wouldn't use that as a reason to put the blame at feet of the US, but having such a powerful ally has certainly emboldened Saudi Arabia in their designs for the minor states in the region.

Qatar crisis: Saudi Arabia insists Gulf country must meet its demands ‘soon’
Qatar has ‘chosen to ride the tiger of extremism and terrorism,’ says one diplomat, as tentative steps towards reconciliation falter in unprecedented rift

Saudi Arabia has issued neighbouring Qatar with a list of ten demands it must meet, after Riyadh and other nations in the region took the unexpected step of cutting off ties to the tiny kingdom, accusing it of supporting terrorism.

Kuwaiti mediators flew to the Saudi capital on Tuesday, where diplomats conveyed extensive demands of Doha, including cutting off all links with Iran and expelling resident members of Palestinian militant group Hamas and the pan-Arab Muslim Brotherhood.

Other points included curbs on the freedom of Qatar’s state-funded broadcaster al-Jazeera, which its Gulf neighbours have accused of slander and ‘fake news’, orders to stop “interfering” in foreign countries’ affairs and to cease any funding or support for terrorist organisations.

Qatar vehemently denies all these allegations.

Saudi Arabia’s foreign minister demanded on Tuesday that Qatar respond to its ultimatum “soon,” if the leaders of the Gulf Cooperation Council (GCC) were to meet to discuss further reconciliatory action.

It was with “great pain” that his country and others took measures against Qatar, said Adel al-Jubeir, but it was the aim of “restoring relations to how they were in the past”.

The minister spoke to media after meetings with his German counterpart in Berlin.

An Emirati diplomat took a harder stance on Wednesday, telling the Associated Press “there's nothing to negotiate” with Qatar.

Doha has “chosen to ride the tiger of extremism and terrorism” and now needs to pay the price, said Emirati Minister of State for Foreign Affairs Anwar Gargash, in a signal that some involved in the standoff are not willing to negotiate.

The UAE’s justice ministry warned social media users on Wednesday that any expressions of “sympathy” for Qatar could result in between three to 15 years in prison, as well as hefty fines.

On Monday, the Saudis accused Doha of supporting Iran-backed “terrorist activities” in the country’s east, as well as in Shia-majority Bahrain. The suggestion that Qatar is aiding and abetting Shia Iran – the majority Sunni Gulf's arch-rival – is particularly sensitive.

Saudi Arabia, the UAE, Bahrain and Egypt severed all diplomatic ties, followed by the internationally recognised governments of Yemen and Libya, the Maldives and Mauritania.

The crisis has only escalated since, and could have manifold economic and political effects for the Middle East – as well as alter the course of the region’s many conflicts.

The closure of the tiny energy-rich kingdom’s sea, land and air borders with its neighbours has effectively left Qatar under siege. Panicked citizens have cleared supermarket shelves of produce, the country’s stock market has plummeted, and Qatari nationals living abroad have been given 14 days to leave.

Doha’s Hamad International Airport has been eerily quiet since Riyadh led the charge in revoking state-owned Qatar Airways’ operational licences.

The airline has been blocked from landing in the affected countries, and Al-Jazeera offices have been shut down by authorities in Saudi Arabia and Jordan.

Doha has long been considered “rogue and maverick” by its neighbours, said Emirati Sultan Sooud Al Qassemi on Wednesday. Its citizens must “question if this is going to end up in seeing a change in leadership itself,” he added.

On Wednesday, several Gulf diplomats suggested their complaints about Qatar go back years, implying criticism of Sheikh Hamad bin Khalifa Al Thani, who took over as Qatar’s emir in 1995 and greatly expanded his nation’s international influence through negotiating hostage releases, briefly flirting with diplomatic ties to Israel, hosting controversial groups such as Hamas and the Taliban and creating Al-Jazeera.

Sheikh Tamim bin Hamad Al Thani, his son, became Qatar’s ruling emir in 2013.

The latest row is the worst to affect the region since Qatar drew ire across the Gulf by publicly backing the Muslim Brotherhood in Egypt in 2014.

Aside from the terror support allegations, it has been sparked by other factors such as anger over “fake news” distributed by Qatar’s state-run news agency last month – blamed on Russian hackers – and Doha’s April decision to pay a colossal $500m (£389m) in ransom money to Shia paramilitaries in Iraq for the safe return of several members of its Royal family, kidnapped on a hunting trip.

Iran, the secondary target of Monday’s co-ordinated move, has blamed US President Donald Trump for emboldening the Gulf states after a two-day trip to Riyadh last month in which he reiterated US support for Saudi Arabia and singled out Iran as a sponsor of Islamist terrorism.

While in tweets Mr Trump appeared to back his Saudi allies’ decision, the White House has officially urged Arab unity for “peace and security” in the region.

 Frazzled wrote:
Except of course there are US bases on both of them.

 Easy E wrote:
Well, maybe we will find out if Merkel was right about us being an unreliable ally?

 whembly wrote:

Seems serious...

Is it wrong that the cynic in me is thinking that this is an elaborate head-fake in order to drive up oil prices?? Or is this the real dealio?