Qatar is a small Gulf Cooperation Council country. It shares a land border with Kingdom of Saudi Arabia only and across the sea with Iran. Due to its huge oil and natural gas reserves, it has the highest per capita income in the world, with no taxes applied to its citizens. Qatar has been accused of its support for Islamist movements in the Middle East, this has created tensions with other GCC countries over the recent years.
Qatar has also improved its relation with Iran, the Saudi Arabia’s arch-enemy. Few incidents of terrorism occurring in Saudi Arabia have caused alarm in the whole Middle East. Thus countries including Kingdom of Saudi Arabia, Egypt, the United Arab Emirates and Bahrain have announced to cut ties with the small GCC country, Qatar on 5 June, blaming it for destabilizing the region with its patronage for Islamist groups. Other Muslim countries like Maldives, Libya, Yemen have also announced to cut ties with Qatar.
Saudi Arabia, UAE, Egypt and Bahrain cut diplomatic ties with #Qatar this morning.
— Al Jazeera English (@AJEnglish) June 5, 2017
Saudi Arabia stated: “[Qatar] embrace of various terrorist and sectarian groups aimed at disturbing the stability in the region including the Muslim Brotherhood, al-Qaeda, and ISIS.”
The United Arab Emirates stated: “ The UAE is taking these decisive measures as a result of Qatar’s failure to abide by the Riyadh agreement and its continued funding and hosting of terror groups.”
Qatar denied the accusations made by Saudi Arabia and UAE and expressed regret at the decision, stating “was founded on allegations that have no basis in fact”.
Key Measures taken by Gulf states on Qatar
1. Qatari diplomats were made to leave from the respective countries within 48 hours.
2. Qatari visitors or residents were ordered to leave within 14 days.
3. Airspace and maritime territories were closed to Qatari shipment and flights, suspending any sort of air and sea link within 24 hours.
4. Its only land border with Kingdom of Saudi Arabia was closed.
5. Expelled from Saudi-led coalition fighting in Yemen.
Oil prices and OPEC agreement risks
Oil prices depend largely on geopolitical tensions or any instance of disruption to production. Although it was unclear how the dispute would affect supply, crude prices were pushed higher on 5 June, Monday morning. This did not last long. Brent prices were up 1.7% to USD50.7/b.
FIFA World Cup 2022
Qatar is set to host FIFA world cup 2022 for which they’ve claimed to spend $500 million every week for the required infrastructure. While Qatar imports nearly 90 percent of its food products through the only available land route to Saudi Arabia. Re-exports from Dubai to Qatar were also blocked. Together, these measures could even affect the preparations for the FIFA World Cup it is to host in 2022.
Simon Chadwick who is a Professor of sports enterprise at Salford University, stated: this crisis “raises an important issue of risk assessment and contingency planning” for the upcoming World Cup.
The rising political tension is alarming, it may increase regional geopolitical instability. Indeed, a divided GCC will bring additional instability in the Arab countries at a time of complete confrontation between the Saudi-led Confederacy and Iran. Possibly a thaw between Iran and Qatar could lead to a confrontation with the US, as it has a huge military base currently in the GC, mainly in Qatar where the country hosts the largest US military base in the GCC. Thus Iran and Qatar together would give a serious security risk to the US military. Cutting ties may give Qatar a serious economical blow, as a result it may shape its policy accordingly with a more pro-Iranian approach.
The closure of Saudi, Emirati, and Bahraini airspace will definitely have a disastrous impact on Qatar Airways. Qatar Airways will have to take much longer routes to get around the bans. It will have to fly over Iran while avoiding Saudi Arabia, Bahrain, the UAE, and Syria.
Food shortage is likely to occur in Qatar as a major part of its food import is by the only land border with Saudi Arabia. This is a serious blow to the country. Qatar is advised to improve its seaport infrastructure to shift its major trade by its only land route to Saudi Arabia to sea route with other countries. It needs to use its resources to build its maritime trade stronger to avoid the food shortage. Since Qatar has a strong economy, it will find ways for moving their food trade from Saudi Arabia to Turkey and Iran.
This conflict is closely tied to the time around Trump’s visit to Saudi Arabia. It is said that the ban was a mutual decision. Some said Saudi Arabia wanted to host the FIFA world cup 2022, which is now due to be hosted by Qatar. The impacts of this ban will be long lasting. We have yet to see how this ban will affect the rest of the GCC countries in the long run.