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Qatar Isolation Exposes Gulf Rift

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Qatar Isolation Exposes Gulf Rift

This week's sudden breaking of diplomatic and trade relations with Qatar by influential Persian Gulf oil monarchies took the world by surprise. The foundation for this move, however, has been growing for years. Since 1995, Qatar's rulers have striven to move out from under the shadow of the Saudis and become more influential in the Middle East.

This isn't the first time that members of the Gulf Cooperation Council have acted against the small, disruptive kingdom, and the stated reasons are still the same -- Qatari aid and comfort of terrorist organizations.

A "Ramadan Surprise"

At 6am local time June 5th, the kingdoms of Saudi Arabia and Bahrain, along with the United Arab Emirates, suddenly cut all diplomatic and economic ties with the kingdom of Qatar. Citing security reasons and Qatar's long-time support of extremist Muslim groups, the three closed their ports and airspace to Qatari-flagged vessels and aircraft. (Saudi Arabia has long accused Qatar of supporting militants in eastern Saudi Arabia, a charge Qatar denies.)

Saudi Arabia, which shares the only land border with the Qatari peninsula, abruptly sealed all border crossings, leaving thousands of overland shipments to Qatar (mainly of food) stranded. Qatar imports most of its food, and that food mostly arrives by truck via Saudi Arabia. This is a special hardship now, as the Muslim world observes the month of Ramadan.

The timing of the concerted isolation of Qatar by other Gulf nations, coming just days after President Donald Trump's visit to the region, has led observers to believe that the Saudis were looking for, and received, the OK from Trump to go after Qatar. Trump seemed to validate that train of thought with several anti-Qatari Twitter posts. These statements cast doubt over US/Qatari relations, which are important for the war against Islamist terrorists in Syria and Iraq.

Just two weeks previously, Trump had praised Qatar, saying “We are friends, we’ve been friends now for a long time, haven’t we? Our relationship is extremely good.” Qatar hosts (and pays for) the largest US military base in the Middle East, which is the launching point of most airstrikes the US Air Force flies against ISIS.

Egypt and Jordan Join The Embargo

Egypt, where a military coup displaced the Muslim Brotherhood-dominated government, joined the embargo almost immediately. Qatar has long been the main financial backer of the Muslim Brotherhood, which is considered an extremist and/or terrorist group by many nations, and is an existential threat to the new military government.

Wednesday, the kingdom of Jordan also severed ties with Qatar. Both Jordan and Egypt depend on Saudi largesse to keep their country running, and may have had some behind the scenes pressure applied by their benefactor.

The government of Yemen, which is being supported by a Saudi-led Arab military coalition in a civil war against Iranian-backed rebels, quickly signed on to the sanctions against Qatar as well.

qatar crisis

What Happened?

This sudden crisis began on internet. The website of the Qatari News Agency published inflammatory statements from ruler of Qatar, Sheikh Tamim bin Hamad Al Thani. The Qatari government claims that the website was hacked, and the statements inserted into an already-published news story (the FBI is helping investigate the cybercrime).

Among the statements crafted to provoke the greatest outrage, was one that had the Emir of Qatar praising Iran: "Iran represents a regional and Islamic power that cannot be ignored and it is unwise to face up against it." Other statements called the terrorist group Hamas "the legitimate representative of the Palestinian people."

At the same time, the Twitter account of the QNA was used to broadcast statements attributed to the Qatari Foreign Minister decrying a conspiracy by Saudi Arabia, Kuwait, Bahrain, the UAE, and Egypt to discredit Qatar. The fake tweets went on to say that Qatar was recalling its ambassadors from those nations, and expelling their ambassadors from Qatar.

Saudi media ran with the story, repeating the statements throughout the day. This stoked public anger towards Qatar, giving popular support to the King's decision to sever ties with the country. The most damning fact in the whole affair was that the "fake news" incorporated some portion of the truth regarding Qatar's terrorist ties and contentious relationship with its Persian Gulf neighbors.

Since Qatar and Iran share one of the largest natural gas fields in the world, it behooves the emirs in Doha to make sure the ayatollahs are placated. This is naturally seen by Saudi Arabia, Iran's greatest rival as ruler of the Middle East, as a direct threat on its doorstep.

As the only other Arab nation besides Saudi Arabia to have Wahhabism as the state religion, Qatar's ideology naturally predisposes it to support Salafist fundamentalist movements. This includes those organizations who may be violently opposed to the "decadence" of the ruling families of other Persian Gulf oil kingdoms.


Premeditated Action?

Middle East political observers believe that Saudi Arabia has been wanting for a long time to quash Qatar's ambitions to supplant the Saudis as a regional power broker. The sudden isolation of Qatar by Saudi Arabia, with Bahrain and the UAE following their lead, hints that this action had been coordinated ahead of time. The fact that their kingdom plays a major role in the US military presence in the Middle East is seen by the Qatari rulers as a guarantee against any hostile action being taken against them by the Saudis.

But since the election of Donald Trump as US President, the music at the dance has changed.


Many analysts are using the term "emboldened" to describe the moves by the three main Gulf kingdoms against Qatar. Overtures to Iran by the Obama Administration culminated in an international agreement to lift sanctions against Iran in exchange for the de-militarization of its nuclear program. The Saudis in particular felt that they were being left in the cold by the US, and Iran's regional power was being increased. This completely changed with Donald Trump's election victory.

One of the main planks of Trump's campaign platform was getting tough with Iran as a state sponsor of terrorism, and possibly abrogating the nuclear deal. During his recent visit to the area, President Trump said he pressured Persian Gulf nations to do more to cut financial support to extremist groups. Since Iran was already the big enemy in the Persian Gulf in Trump's eyes, the natural target for Saudi and its allies to call to Trump's attention was Qatar and its warm relations with Tehran.

Donald Trump tweets on Qatar and terrorism

While much is being made of Trump's role in the sudden crisis gripping the Gulf, the US has a history of warning Qatar that hosting the USAF at the massive Al-Udeid airbase doesn't give it a blank check to fund terrorists.

Former US diplomat Dennis Ross, who served under three Presidents, told Sky News Arabia: “I wouldn’t be surprised at all if there’s some discussion internally in the Trump administration to make it clear to Qatar that if need be, we’re prepared even to move (from) the base.” He notes that even the Obama Administration warned Doha that they knew how much they were funding extremists, saying that the US would not "turn a blind eye" towards these acts, even if it meant moving the US military out of the country.

Many wealthy Arabs have a family history of heavily supporting ideologically simpatico fundamentalist groups, especially Saudi individuals financing Salafist groups such as Al Qaeda, and the al-Nusra Brigade in Syria. However, the most public patrons of extremist groups have been Qatari, making them an easy target to distract the US.

Playing Both Sides Is A Dangerous Game

The wealthiest country on Earth, per capita, Qatar owes its vast fortune to natural gas. They control the third-largest natural gas field in the world; the offshore North Field. The political problem that comes with this resource is the fact that the North Field extends clear across the Persian Gulf to Iran, who is also pulling natural gas out of the project. This puts Qatar, the only other Wahhabist government besides Saudi Arabia, needing to keep relations with the Shiite theocracy in Iran placated.

Qatar is the #1 investor in the Hamas-controlled Gaza Strip, paying the salaries of government employees and financing the rebuilding of infrastructure destroyed in the periodic wars between Hamas and Israel. They have openly financially assisted other extremist groups, allowing the Taliban to actually open an office in the Qatari capital of Doha.

On the flip side, Qatar is home to Al-Udeid airbase, the largest US Air Force base in the Middle East. They not only built the base for the Americans, they pay for its upkeep. Another military base is home to up top 10,000 US soldiers and serves as the main staging base for the US Army's Central Command. US facilities in Qatar play a large role in the fight against the terrorist army of Daesh (ISIS).

Making the problem even thornier for the US military, Qatar's island neighbor Bahrain is host to the US Navy's Fifth Fleet, charged with securing US and allied interests in the Persian Gulf. Saudi Arabia hosts five US airbases, and signed one of the largest arms deals in history with the US during President Trump's visit to the kingdom.

Qatar may find that the anti-Iranian political climate in Washington does not make the Al-Udeid airbase as strong a guarantor of US support as it has been in the past.

Kuwaiti Peacemakers?

The kingdoms of Kuwait and Oman are the only two members of the Gulf Cooperation Council not directly involved in this crisis. Kuwait has opened its airspace to flights to and from Qatar so that non-Qataris can flee before the 14-day deadline expires, and Qataris can return home under the same deadline.

For its part, Oman depends heavily on the natural gas pipeline from Qatar for its energy needs. This is an added impetus for the Omanis to help defuse the situation on the Arabian peninsula. The UAE also depends heavily on Qatari natural gas for its energy needs. It provides half of all energy consumed in the Emirates. Dubai's famous skyscrapers would be dark if the pipeline was shut down, so the UAE has quietly left it alone, even as it closes its ports and airports to Qatar.


The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.

About the Author

Everett Millman

Steven Cochran

Precious Metals Market Analyst
BS University of South Florida (2002)

A published writer, Steven's coverage of precious metals goes beyond the daily news to explain how ancillary factors affect the market.

Steven specializes in market analysis with an emphasis on stocks, corporate bonds, and government debt. He writes a monthly review of the precious metals markets for

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