Category Archives: Qatar

(BBG) Qatar to Leave OPEC as Politics Finally Rupture Oil Cartel

(BBG) Qatar said it will leave OPEC next month, a rare example of the toxic politics of the Middle East rupturing a group that had held together for decades through war and sanctions.

Qatar, a member since 1961, is leaving to focus on its liquefied natural gas production, Energy Minister Saad Sherida Al-Kaabi told a news conference in Doha on Monday. He didn’t mention the political backdrop to the decision: dire relations with Saudi Arabia, which has led a blockade against his country since 2017; and a rhetorical onslaught from U.S. President Donald Trump against the cartel.

“The symbolism is profound,” said Helima Croft, commodities strategist at RBC Capital Markets LLC and a former analyst at the Central Intelligence Agency. “Given that the concentrating on LNG should not be incompatible with OPEC membership, the move will invariably lead many to conclude that the geopolitical divisions had become too intractable.”

A spokesman for the Organization of Petroleum Exporting Countries declined to comment.

Qatar is OPEC’s 11th-biggest oil producer, accounting for less than 2 percent of total output, so its departure may not have a significant impact on discussions this week to cut production in conjunction with allies including Russia. Yet it sets a troubling precedent for a group that prides itself on putting shared economic interests above external politics — even extreme events like the Iran-Iraq war in the 1980s or Saddam Hussein’s 1991 invasion of Kuwait.

“Quitting OPEC is largely symbolic for Qatar,” said Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd. in London. “Its oil production has been steady with limited prospects for increases.”

Qatar is a minnow in oil and a giant in natural gas. Counting both its production of crude and condensate — a form of ultra-light oil — the nation pumps about 1 million barrels a day, less than a 10th of Saudi Arabia’s output. In the 2016 production-cuts deal between OPEC and non-members including Russia, Qatar made a reduction of 30,000 barrels a day, just 1.7 percent of the total.

Add in natural gas, supplied to its neighbors by pipeline and globally as LNG, and the nation’s output rises to the equivalent of 4.8 million barrels of oil a day, with plans to expand that to 6.5 million, according to Al-Kaabi.

“Achieving our ambitious strategy will undoubtedly require focused efforts, commitment and dedication to maintain and strengthen Qatar’s position as the leading LNG producer,” Al-Kaabi said in a statement. “I would like to reaffirm Qatar’s pride in its international standing at the forefront of natural gas producers, and as the biggest exporter of LNG.”

Frayed Relations

Relations within OPEC are sometimes frayed and observers have often speculated that the group could fracture. Yet oil ministers from Iran and Iraq continued to attend the same meetings even as their nations fought a bloody war that included the use of chemical weapons.

In the mid-1990s, Venezuela appeared at times on the brink of pulling out. Some U.S. right-wing politicians also tried to convince Iraq to withdraw after the 2003 invasion, but Baghdad resisted the pressure. Iran and Saudi Arabia have been bitter regional rivals for many years, backing opposite sides in civil wars in Syria and Yemen, but have still been able to negotiate compromises within the group’s Vienna headquarters.

In the history of the cartel, three nations have left the organization, although two later re-joined. Most recently, Indonesia suspended its OPEC membership because its status as a net importer of oil made joining the 2016 production cuts impractical.

Founding Nations

Qatar was the first country to join OPEC after the five founding nations — Iran, Iraq, Kuwait, Saudi Arabia and Venezuela — formed the group in 1960. It’s the first Middle Eastern nation to leave the group.

Its departure comes amid a standoff between Gulf Arab nations. A Saudi-led coalition implemented a blockade on Qatar in June last year, severing diplomatic, trade and transport links as they accused Doha of funding extremist groups and being too close to Iran.

Qatar is also leaving at a time when being an OPEC member carries wider political risks. In addition to the verbal attacks from Trump, the U.S. Department of Justice is formally reviewing legislation to rein in the cartel’s power. If passed, the NOPEC bill could open up members of the group to legal attacks under the Sherman Antitrust Act of 1890, used more than a century ago to break up the oil empire of John Rockefeller.

The departure of Qatar “presents a public relations and perhaps a sentiment problem” for OPEC at a crucial time, said Joe McMonigle, an oil analyst at Hedgeye Risk Management LLC and a former senior official at the U.S. Energy Department.

(ZH) “Qatar Island”: Saudis Launch Massive Canal Project To Cut Off Neighbor

(ZH) It almost sounds too insane to be believed, but Saudi Arabia’s move to further isolate neighboring Arab rival Qatar by literally turning it into an island is but the latest in an intense year long feud between the two countries that has already produced its fair share of bizarre headlines.

Tiny but ultra-wealthy Qatar is a peninsula which shares a 37.5 mile border (60km) with Saudi Arabia on the kingdom’s northeast side and juts out from the Arabian peninsula about 100 miles into the Persian Gulf.

Saudi media revealed this week the kingdom is quickly moving forward with ambitious plans to dig a 200 meter wide and 15-10 meter deep canal the entire length of the land border, effectively creating ‘Qatar island’ — as some Mideast news sources are already calling it.

Of course, the Qataris don’t appear to have a say in their own country’s geographic fate, and the Saudis and Emirates further plan to locate nuclear waste sites and a military base along the proposed canal to boot. 

The so-called “Salwa Marine Canal Project” has reportedly opened up to bidding among five international companies that specialize in digging canals, with bids closing next Monday and the project to be awarded in 90 days, according to regional sources. The canal project is estimated to cost up to 2.8 billion riyals ($750 million) according to Saudi-based Sabq newspaper.

Qatar has remained defiant throughout its unprecedented summer diplomatic crisis with Saudi Arabia and other Gulf Cooperation Council (GCC) states which have brought immense pressure to bear on the oil and gas rich monarchy through a complete economic and diplomatic blockade imposed by its neighbors. Saudi and UAE officials have long accused Qatar of supporting terrorism, aligning with Iran, and meddling in the affairs of its gulf neighbors in a crisis that has resulted in the near complete unraveling of the GCC. 

The Salwa canal was first announced in April but many observers dismissed it as but the latest in outrageous Saudi claims and punitive measures aimed at Qatar.

Newsweek reported in early April:

Apparently, Riyadh is not content with traditional isolation. The so-called “Salwa Marine Canal Project” would establish a military base in one area of the border and a nuclear waste site in another. The waste would come from the nuclear reactors that Saudi Arabia is planning to build. The border would then be clearly demarcated by a wide canal. The UAE would also build a nuclear waste site at its border’s closest point to Qatar.

But it now appears to be concretely advancing and not a bluff.

Beyond nuclear waste and military installations, Riyadh further envisages beach resorts in Salwa, Sakak, Khor al-Adeed and Ras Abu Qamees, and marinas for yachts and leisure.

According to Dubai-based Gulf News the canal will be fully within the Saudi side of the border, meaning Qatar will have no rights or access to the waterway. Gulf News further (somewhat enthusiastically) notes that“In April, Saudi border guards took control of the Salwa crossing, effectively cutting off Qatar’s only terrestrial link with the outside world.”

The project will reportedly be funded entirely but UAE and Saudi private investors, and it will be interesting to see if it actually comes to fruition. If so, building what is essentially a massive 60km long mote to physically cut off an entire country would certainly constitute a first in the history of diplomatic warfare.

(TIME) Qatar Restores Diplomatic Ties With Iran Amid Regional Crisis

(TIME) (DUBAI, United Arab Emirates) — Qatar has restored full diplomatic relations with Iran, ignoring the demands of Arab nations now trying to isolate the energy-rich country to downgrade its ties.

Qatar’s Foreign Ministry announced early Thursday that the country’s ambassador would return to Tehran. Qatar pulled its ambassador in early 2016 after Saudi Arabia’s execution of a prominent Shiite cleric sparked attacks on two Saudi diplomatic posts in Iran.

Qatar said in a statement that the move “expressed its aspiration to strengthen bilateral relations with the Islamic Republic of Iran in all fields.” Iranian state media acknowledged the development, without elaborating.

Qatar and Iran share a massive offshore natural gas field that requires communication between the two countries. Since the diplomatic dispute with Arab nations began in June, Iran has sent food shipments to Qatar.

+++ (BBG) Qatar Passes Landmark Law to Grant Permanent Residency to Expats

(BBG) Qatar, facing a Saudi-led boycott, approved a landmark law with the potential to ultimately transform Gulf societies by granting permanent residency cards — and new rights — to some of the foreigners who dominate its population.

The move would be the first in the Gulf region, where the privileges of nationals have been zealously guarded and expatriates’ access to public services and property rights are sharply curtailed. Under the new law, cardholders will be treated like Qatari nationals and will benefit from elements of the state’s generous welfare system, including education and health-care services, the official Qatar News Agency reported late Wednesday.

They will also be given priority, after locals, for military and civilian public jobs and would be allowed to own property and run certain commercial activities without a local partner, QNA reported. Those eligible for the card include children of Qatari women married to foreigners, people with special talents “needed by the state,” and others who have extended notable services to the country, it said. Citizenship, however, will remain off-limits to foreigners.

The action “is symbolically significant, and will make some expatriates in Qatar feel like they now have a more substantial stake in the future of the country,” which could give them an incentive to stay and make additional investments in the country, said Allison Wood, a Middle East and North Africa analyst with the Control Risks strategy firm in Dubai.

It also meshes with Qatar’s public relations strategy after Saudi Arabia and three allies severed their diplomatic and transport links with the country in June, “which has generally been to portray itself as a victim,” Wood added. “The new law provides an opportunity to put Qatar in the headlines as a more open, forward-thinking state when compared to its neighbors, which do not have similar residency programs.”

Seeking Investment

The legislation was approved after Qatar’s ruler, Sheikh Tamim bin Hamad Al Thani, instructed officials in a July 22 speech to expedite measures to lure investments and reduce the economy’s reliance on energy in the wake of the boycott. He said opening up the economy was no longer a “luxury” but an obligation.

The six Gulf nations that make up the Gulf Cooperation Council are under pressure to diversity their economies amid low oil prices, and they rely on expatriates who began pouring into the region during the energy boom of the 1970s to run their economies.
Except for Saudi Arabia and Oman, foreign workers and their families outnumber local populations in the GCC, and in Qatar, they account for 88 percent of residents, according to the CIA World Factbook.

With few exceptions, the majority of foreigners in Oman, Qatar, Saudi Arabia, Bahrain, the United Arab Emirates and Kuwait need to be sponsored by locals to live and do business. Citizens, on the other hand, receive state support widely seen as a tradeoff for political loyalty.

Qatar, which has adopted policies that diverge from GCC consensus and sheltered groups banned in some Gulf countries, is again taking a “unique approach” that likely won’t be endorsed by its two neighbors leading the boycott — Saudi Arabia and the U.A.E., said Ayed Al-Manna, a Kuwaiti political analyst and newspaper columnist.

“It’s one of the means to embarrass the rest of the Gulf states, that Qatar is taking the situation of human rights into account,” said Al-Manna. “Qatar wants to shift public opinion because of this crisis.”

Debated Elsewhere

Qatar came under intense international criticism over its treatment of foreigner laborers after winning the right to host soccer’s 2022 World Cup. The government has since pledged to improve the workers’ living and working conditions.

The idea of allowing foreigners to reside in Gulf countries for longer periods has also been discussed in other countries as they seek to to bolster non-oil revenue after the plunge in crude prices.

Last year, Saudi Arabia’s Crown Prince Mohammed bin Salman told Bloomberg in an interview that the government was weighing a green card-type program for foreign workers. The U.A.E. said in February it was working on a new visa system designed to attract top foreign talents in fields such as medicine, science and research to the country.

Wood said that over time, other GCC states may adopt similar programs as they look to diversify from oil, but will preserve the rights and privileges given to citizens for some time to come. “The ruling families of the Gulf will want to preserve the existing social and political contract in their states — that these families are given the power to rule in return for caring for citizens of these states,” she said.

Approving these laws doesn’t mean that implementation will swiftly follow, said Anthony Cordesman, an analyst with the Washington-based Center for Strategic and International Studies.

“That doesn’t mean that there aren’t good intentions,” Cordesman said. “But one has to be careful about assuming too much until you see the practice.”

(Reuters) Arab states issue ultimatum to Qatar: close Jazeera, curb ties with Iran

(Reuters) Four Arab states that imposed a boycott on Qatar have issued an ultimatum to Doha to close Al Jazeera television, curb ties with Iran, shut a Turkish base and pay reparations, demands so far reaching it would appear to be hard for Doha to comply.

Saudi Arabia, Egypt, Bahrain and the United Arab Emirates have sent a 13-point list of demands apparently aimed at dismantling their tiny but wealthy neighbor’s two decade-old interventionist foreign policy which has incensed them.

Qatar did not immediately comment, but Foreign Minister Sheikh Mohammed bin Abdulrahman al-Thani had said on Monday Qatar would not negotiate with the four states until economic, diplomatic and travel ties cut this month were restored.

The countries that imposed the sanctions accuse Qatar of funding terrorism, fomenting regional unrest and drawing too close to their enemy Iran. Qatar rejects those accusations and says it is being punished for straying from its neighbors’ backing for authoritarian hereditary and military rulers.

The uncomprimising demands leave little prospect for a quick end to the biggest diplomatic crisis for years between Sunni Arab Gulf states, regional analysts said.

“The demands are so aggressive that it makes it close to impossible to currently see a resolution of that conflict,” Olivier Jakob, a strategist at Switzerland-based oil consultancy Petromatrix, said.

Ibrahim Fraihat, Conflict Resolution Professor at the Doha Institute for Graduate Studies, forecast a prolonged stand-off.

Qatar would reject the demands as a “non-starter”, he said, and its neighbors had already escalated as far as they were likely to go. “Military action remains unlikely at the moment so the outcome after the deadline would be a political stalemate …”

Washington, which is a close military ally of countries on both sides of the dispute, had called for a resolution: Secretary of State Rex Tillerson said Qatar’s neighbors should make their demands “reasonable and actionable”.


An official from one of the four nations, who gave details of the demands on condition of anonymity, told Reuters the offer would be “void” unless Qatar complied within 10 days.

The UAE has said sanctions could last for years. Qatar, the world’s richest country per capita, says the sanctions amount to a “blockade”, but it has ample reserves to weather the storm.

The dispute is a big test for the United States, which houses the headquarters of its Middle East air power and 11,000 troops at a large base in Qatar.

President Donald Trump has backed the sanctions, even as his Defense and State Departments have tried to remain neutral, resulting in mixed signals. Trump called Qatar a “funder of terrorism at a very high level”, only for his Pentagon to approve selling it $12 billion of warplanes five days later.

The most powerful country in the region to back the Qatari side in the dispute has been Turkey, whose President Tayyip Erdogan has his roots in an Islamist political party similar to movements that Qatar has backed in the region. Days after the sanctions were imposed, Turkey rushed through legislation to send more troops to its base in Qatar as a sign of support.

Defense Minister Fikri Isik rejected the demand to close the base, saying it would represent interference in Ankara’s relations with Doha. Turkey might bolster its presence instead.

“Strengthening the Turkish base would be a positive step in terms of the Gulf’s security,” he said. “Re-evaluating the base agreement with Qatar is not on our agenda.”

Qatar has used its vast wealth over the past decade to exert influence abroad, backing factions in civil wars and revolts across the Middle East. It infuriated Egypt’s present rulers and Saudi Arabia by backing a Muslim Brotherhood government in Cairo that ruled for a year until it was deposed by the army in 2013.

Qatar’s state-funded satellite broadcaster Al Jazeera became hugely popular across the Middle East, but has long infuriated Arab governments used to exercising firm control over the media in their countries. Jazeera hit back at the closure order, calling it “nothing but an attempt to silence the freedom of expression in the region”.


The demands, handed to Qatar by mediator Kuwait, tell Qatar to stop interfering in the four nations’ domestic and foreign affairs and refrain from giving Qatari nationality to their citizens, the official from one of the sanctioning states said.

They also include severing ties with the Muslim Brotherhood, Islamic State, al Qaeda, Hezbollah, and Jabhat Fateh al Sham, formerly al Qaeda’s branch in Syria, and the surrender of all designated terrorists on Qatari territory. Qatar denies it has relationships with terrorist groups or shelters terrorists.

It was ordered to scale down diplomatic relations with Iran, limit its commercial ties and expel members of Iran’s Revolutionary Guards. Qatar denies they are there.

The sanctioning countries demanded Qatar pay them reparations for any damage or costs incurred due to Qatari policies. Compliance with the demands would be monitored, with monthly reports in the first year, then every three months the next year, then annually for 10 years, the official said

Although Reuters was told about the contents of the ultimatum by an official from one of the sanctioning countries, UAE Minister of State for Foreign Affairs Anwar Gargash accused Qatar of leaking the demands.

“There is a price for the years of plotting and there is a price to return to the neighborhood,” Gargash said on Twitter. “The leak (of demands) seeks to derail mediation.”

Qataris who spoke to Reuters described the demands as unreasonable, particularly the closure of Jazeera, which millions of Arabs see as an important outlet for voices willing to challenge the region’s authoritarian rulers, but which neighboring governments call a conduit for Islamist propaganda.

“Imagine another country demanding that CNN be closed,” 40-year-old Haseeb Mansour, who works for telecom operator Ooredoo, said.


Abdullah al-Muhanadi, a retired public sector worker shopping for groceries in Doha on Friday morning, said the boycott must be lifted before negotiations to resolve the dispute could start.

“There’s a lot on the list that is simply not true or unreasonable, so how can we comply?” he said. “There are no IRGC (Iranian Revolutionary Guard Corps) elements in Qatar and the agreement with Turkey is a long-standing diplomatic agreement so we cannot ask them to leave.”

Qatar has only 300,000 citizens enjoying the riches produced by the world’s largest exports of liquefied natural gas. The rest of its 2.7 million people are foreign migrant workers, mostly manual laborers employed on vast construction projects that have crowned the tiny desert peninsula with skyscrapers as well as stadiums for the 2022 soccer world cup.

The sanctions have disrupted its main routes to import goods by land from Saudi Arabia and by sea from big container ships docked in the United Arab Emirates. But it so far has avoided economic collapse by quickly finding alternative routes, and it says its huge financial reserves will meet any challenges.

Qatar says the sanctions have also brought personal hardship for its citizens who live in neighboring countries or have relatives there. The countries that imposed the sanctions gave Qataris two weeks to leave, which expired on Monday.

+++ (BBG) Qatar’s One Weapon in Saudi Clash Can’t Be Unsheathed: Gadfly

(BBG) Oil and gas exports are key to Qatar’s prosperity, and the restrictions imposed earlier this month by its neighbors on vessels could create some real problems for crude.

For gas, there will be limited impact. However the key weapon in Qatar’s arsenal — its gas supplies to Abu Dhabi — can’t be compromised without escalating a battle the nation would seem destined to lose.

Last week’s shipping bans prevent vessels from entering terminals in either Saudi Arabia or the United Arab Emirates. Their scope has fluctuated between a restriction on Qatari-owned or flagged vessels, and a more general ban on all ships that have called, or plan to call, at Qatar, regardless of ownership or flag. The uncertainty means that shippers and buyers of Qatari oil are forced to operate as though their vessels will be barred from regional ports.

This impacts Qatar and its trading partners in two ways.

Firstly, it prevents tankers from loading partial cargoes from Saudi Arabia or the U.A.E. if they’re also loading in Qatar, and it restricts the ports they can use for refueling. Neither should have a profound effect on Qatar’s gas trade — its most important source of income — but the impact on oil could be more significant.

Almost every tanker that takes on a cargo of crude or condensate from Qatar also visits terminals in Saudi Arabia or the U.A.E. to top up its tanks. Qatari crude is typically sold in lots that will fill one third to a half of a very large crude carrier (VLCC), the sort that buyers prefer to use to haul oil from the Middle East to Asia.

According to Bloomberg tanker-tracking data, of the 30 vessels that loaded crude or condensate in Qatar last month, only three didn’t call anywhere else. One co-loaded in Kuwait, and the rest went to terminals in either Saudi Arabia or the U.A.E., or both.

Buyers are already seeking smaller vessels to ship Qatari cargoes. But this comes at the cost of higher per barrel transport charges, for which companies may expect compensation.

The extent of the disruption to oil exports will depend on the scope of the bans and how rigidly they’re enforced.

Tanker-tracking data show that the VLCC Asian Progress V was permitted to load in Saudi Arabia on June 7 after first taking on a partial cargo at Mesaieed in Qatar. On the morning of June 8, the VLCC Apollo Dream was anchored at Saudi Arabia’s Ras Tanura terminal, having previously taken on partial cargoes at Qatar’s Halul Island and then the U.A.E.’s Zirku Island — both visits occurring after the sanctions were imposed.

Allowing the vessel to load in Saudi Arabia may indicate that the kingdom is stepping back from its initial broad ban. If it’s turned away, we can surmise that the Saudis remain uncompromising.

The second impact of the ban is on the refueling of vessels. Fujairah in the U.A.E., strategically located just outside the Persian Gulf, is a major bunkering terminal where vessels take on fuel for their onward voyages. A ban on ships trading with Qatar entering the port will create some initial disruption to shippers, but will eventually provide a boost for nearby bunker terminals in Oman, or even Iran, and may end up hurting the U.A.E. more than Qatar.

The most potent weapon with which Qatar could respond to the various restrictions imposed by its neighbors is its gas sales to the U.A.E.

The Dolphin pipeline provides about a quarter of U.A.E.’s annual gas needs and demand is near its seasonal peak, with the holy month of Ramadan coinciding with rising summer temperatures that boost electricity consumption.

Cutting the flow through the pipeline, as well as shipments of liquefied gas, would cause real short-term difficulties. Supplies could, over time, be replaced with LNG from elsewhere, but attitudes in the country would likely harden against Qatar.

Qatar may be unable to retaliate without escalating the crisis to its disadvantage. But some initial inconvenience aside, it should at least be able to maintain its oil and gas exports.

(Reuters) Qatar vows no surrender in Gulf crisis as U.S., Kuwait seek solution

(Reuters) Qatar vowed on Thursday to ride out the isolation imposed on it by fellow Arab states over its alleged support for terrorism and said it would not compromise its sovereignty over foreign policy to resolve the region’s biggest diplomatic crisis in years.

Saudi Arabia, the United Arab Emirates (UAE), Bahrain and Egypt severed relations with the small Gulf Arab state on Monday, accusing it of supporting Islamist militants and their arch-adversary Iran – charges Qatar calls baseless.

Several other countries later followed suit.

Would-be mediators including U.S. President Donald Trump and Kuwait’s ruling emir have struggled to ease a crisis that Qataris say has led to a blockade of their nation.

Foreign Minister Sheikh Mohammed bin Abdulrahman al-Thani said Qatar had not yet been presented with a list of demands by countries that cut off diplomatic and transport ties, but insisted the matter be solved peacefully.

“We have been isolated because we are successful and progressive. We are a platform for peace,” he told reporters in Doha in a defiant tone.

“We are not ready to surrender, and will never be ready to surrender, the independence of our foreign policy,” he said, warning that the dispute threatened the stability of the region.

Saudi Arabia’s closure of Qatar’s only land border sparked fears of major price hikes and food shortages for its population of 2.7 million people, with long queues forming as some supermarkets began running out of stock.

With supply chains disrupted and anxiety mounting about deepening economic turbulence, banks and firms in Gulf Arab states were trying to keep business links to Qatar open and avoid a costly firesale of assets.

“We’re not worried about a food shortage, we’re fine. We can live forever like this, we are well prepared,” Sheikh Mohammed said.

He said Iran was ready to help with securing food supplies in the emirate, an investment powerhouse and supplier of natural gas to world markets but tiny and reliant on imports.

Turkey has meanwhile brought forward a planned troop deployment to Qatar and pledged to provide food and water supplies to its Arab ally, which hosts a Turkish military base.

A senior UAE official accused Qatar of escalating the row by seeking help from Turkey and Iran.

“The request for political protection from two non-Arab countries and military protection from one of them could be a new tragic and comic chapter,” UAE Minister of State for Foreign Affairs, Anwar Gargash, wrote on Twitter.


Trump initially took sides with the Saudi-led group before apparently being nudged into a more even-handed approach when U.S. defense officials renewed praise of Doha, mindful of the major U.S. military base hosted by Qatar that serves, in part, as a launchpad for strikes on Islamic State insurgents.

In his second intervention in as many days, Trump urged action against terrorism in a call with Qatari Emir Sheikh Tamim bin Hamad al-Thani on Wednesday and offered help in resolving the crisis, including through a meeting at the White House.

But a Qatari official said on Thursday the emir would not be accepting the invitation.

“The emir has no plans to leave Qatar while the country is under a blockade,” the official told Reuters.

The White House said Trump was continuing to talk with all partners. U.N. Secretary-General Antonio Guterres was also ready to support diplomatic efforts “if desired by all parties,” his spokesman said.

Saudi Foreign Minister Adel al-Jubeir, who has said Gulf states could resolve the dispute among themselves without outside help, traveled to Muscat on Thursday to meet his Omani counterpart.

But there have been few signs of progress as officials from Qatar and its Arab neighbors in the Gulf Cooperation Council (GCC) pursue shuttle diplomacy.

“The feeling here is that it is going to take a while to fix. It is more about preventing things from getting worse,” said one diplomat in Kuwait, whose leader was in both the UAE and Qatar on Wednesday for consultations.


The UAE’s national postal group suspended services to Qatar and the UAE aviation authority said it had closed air space for traffic to and from Doha.

The Abu Dhabi Petroleum Ports Authority also reimposed a ban on oil tankers linked to Qatar calling at ports in the UAE, reversing a decision to ease restrictions and potentially creating a logjam of crude cargoes.

“It is a blockade! Like that of Berlin. A declaration of war. A political, economic and social aggression,” a Qatari diplomat said. “We need the world to condemn the aggressors.”

Authorities tried to calm nerves on Wednesday, releasing a video showing a shop with shelves brimming with food and reassuring Qataris – the wealthiest people in the world per capita – that their quality of life would not be hit.

The International Monetary Fund said it was too early to assess the economic impact. But in a sign of the damage, Standard & Poor’s downgraded Qatar’s debt on Wednesday as its riyal currency fell to an 11-year low.


Qatar has backed Islamist movements but strongly denies supporting terrorism. It provides a haven to anti-Western groups like the Afghan Taliban, Palestinian Hamas and Algeria’s Islamic Salvation Front but says it does not accept its neighbors’ view that any group with an Islamist background is terrorist.

Egypt on Thursday called for the United Nations Security Council to launch an investigation into accusations, denied by Qatar, that it paid a ransom of up to $1 billion to “a terrorist group active in Iraq” to release kidnapped members of its royal family.

In an interview with BBC radio, UAE Ambassador to Russia Omar Saif Ghobash said Qatar had to choose between supporting extremism or supporting its neighbors.

“Qatar needs to decide: Do you want to be in the pocket of Turkey, Iran and Islamic extremists? They need to make a decision; they can’t have it both ways,” he said.

The Saudi newspaper al Watan published what it called a list of eight “extremist organizations” seen as working to destabilize the region from Qatar, including Qatar’s Al Jazeera news channel, that were targeted by Gulf Arab states.

State-funded Al Jazeera’s acting director general, Mostefa Souag, dismissed accusations that its reportage is pro-Islamist and amounts to meddling in the affairs of other Arab states. “We don’t interfere in anybody’s business, we just report,” he told Reuters at Al Jazeera’s Doha headquarters.

A company source later said the network was combating a large-scale cyber attack but remained operational, and Qatar’s official state TV said it had shut down its website temporarily after facing hacking attempts.

Qatar said last month its state news agency had been hacked and false statements attributed to its ruler posted, helping ignite this week’s rift with other Arab states.

+++ (BBG) Qatar Defiant as Gulf Arab Allies Deepen Nation’s Isolation

(BBG) Qatar’s top diplomat said on Thursday that his country can sustain economic pressure from a Saudi-led coalition, striking a defiant tone as the worst crisis among U.S. Gulf Arab allies showed no signs of abating.

“We can live forever like this,” Foreign Minister Mohammed Al Thani told reporters in Doha. He said only 16 percent of Qatar’s food imports came through the now-closed land border crossing with Saudi Arabia “and it has been replaced already.”

“We aren’t ready to discuss an intervention into our sovereignty,” he said.

The minister said Saudi Arabia, the United Arab Emirates and Bahrain have yet to submit “clear demands” to resolve the crisis, which escalated on Monday when the three countries, along with Egypt, severed diplomatic ties as well as land, sea and air travel with Qatar. The four accuse the small Gulf nation of supporting Sunni extremist groups and Iranian-backed Shiite militants to destabilize the region.

Al Thani said Qatar never funded extremist groups and urged a diplomatic resolution of the confrontation.

Flight Ban

The unprecedentedly harsh sanctioning of Qatar by Saudi Arabia and its allies has created a new flashpoint in an energy-rich region already convulsed by turmoil. The showdown deepened on Thursday, with the U.A.E. banning all international flights serving Doha from flying through its airspace. The move expands on an earlier ban on direct flights between the two countries and U.A.E. travel restrictions on Qatari passport-holders and citizens of other nations who have Qatari residence permits.

Confusion ruled on the seas as shippers sought clarity on the sanctions, risking leaving vessels locked out of regional ports.

A senior U.A.E. official said on Wednesday that the alliance was ready to impose more penalties unless Qatar changes its policies. Saudi Arabia’s central bank has ordered lenders in the country not to increase their exposure to any Qatari clients, according to people familiar with the matter. The regulator also told banks licensed in the country that they should not process any payments denominated in Qatari riyals, the people said.

Additional punitive measures “could include restrictions on capital flows, which would be negative for Qatari banks’ liquidity and funding,” Moody’s Investors Service said in a report. “In a scenario of a rapid loss of confidence from international investors and depositors from other GCC countries, the government might have to step in to support domestic banks.”

S&P Global Ratings this week lowered Qatar’s long-term rating by one level to AA-, the fourth-highest investment grade, and put it on negative watch on concern the dispute will weaken its finances. Moody’s had taken a similar action before the crisis broke out, citing uncertainty over its economic growth model.

Influence Beyond Size

Tiny Qatar is the world’s No. 1 exporter of liquefied natural gas. Its $335 billion sovereign wealth fund owns stakes in global companies from Volkswagen to Glencore and Barclays. Its influence goes beyond money. It’s also home to the forward headquarters of CENTCOM, the U.S. military’s central command in the region.

The worst crisis in decades among the Gulf’s Arab monarchies is underpinned in part by the regional rivalry between Sunni-led Saudi Arabia, the Middle East’s strongest Sunni power, and Shiite Iran, which has cordial relations with Qatar, known for its contradictory ties. Qatar says the Saudi charges against it are a ploy for regional dominance, but frictions have been mounting for years over Qatar’s backing of the Muslim Brotherhood in Egypt and its Hamas offshoot in the Gaza Strip.

Saudi Arabia and Iran have both criticized each other for supporting Islamist groups fighting in Syria.

European foreign policy chief Federica Mogherini said on Twitter on Thursday that she had spoken with the foreign ministers of Saudi Arabia and Qatar and called for “direct dialogue to quickly resolve ongoing crisis.” On Wednesday, U.S. President Donald Trump, who initially came out in support of the Saudi-led action, called Qatar’s emir, Sheikh Tamim bin Hamad Al Thani, and offered to host talks between the U.S. allies.

Anwar Gargash, the U.A.E. minister of state for foreign affairs, told Bloomberg in Dubai on Wednesday that Qatar needed to pledge to overhaul its foreign policy for any mediation to succeed. Leading the efforts to defuse the crisis is Kuwaiti ruler Sheikh Sabah Al-Ahmed Al-Sabah, who’s been shuttling among Gulf capitals for talks. He met Qatar’s emir in Doha on Wednesday.

Kuwaiti Role

Kuwait may hold the key to resolving the conflict, said Kamran Bokhari, senior fellow at the Washington-based Center for Global Policy.

“Doha is not without leverage,” Bokhari said. “It can drag this on. It also knows that Kuwait is not siding with the Saudis. In fact I suspect the Saudi plan involved keeping a door open. And that door is Kuwait.”

But Mokhtar Awad, a research fellow at George Washington University’s Program on Extremism, didn’t rule out a continued standoff.

“This can certainly turn into a new status quo, but certainly not to the benefit of any of the parties and certainly not Qatar,” Awad said. While there are “real risks” in provoking Saudi Arabia and the U.A.E., given the history of border skirmishes in the Gulf, “what’s more likely is the continued isolation of Qatar and sustained pressure by Saudi and U.A.E.,” he said.

(OBS) Qatar. Namoro assumido com Portugal, apesar da tensão no Golfo

(OBS) A tensão no Golfo Pérsico cresce, com o Qatar acusado pelos vizinhos de patrocinar o terrorismo. Ao mesmo tempo, a relação com Portugal intensifica-se. Necessidade de investimento a isso obriga.

Há uma crise diplomática no Golfo Pérsico que está a deixar o Qatar isolado pelos países vizinhos. Enquanto isso, Portugal vive um namoro, sobretudo económico, com o país que está no centro da polémica. Há um mês, o primeiro-ministro António Costa esteve no país a tentar captar investimento e, dentro de um mês, será a vez do emir Sheikh Tamim bin Hamad al Thani, líder do Qatar, visitar Portugal, nos dias 4 e 5 de julho.

Os contactos, contudo, vão manter-se bem ativos até lá. Ainda neste mês de Junho, uma pequena e discreta missão do Fundo Soberano do Qatar — o Qatar Investment Authority –, estará em Portugal a avaliar várias opções de investimento, entre reuniões e visitas com várias entidades, para que possam ser anunciadas na visita de Estado. A relação está, por isso, longe de ser complicada.

Até à tarde desta terça-feira, a visita do emir do Qatar continuava na agenda, de acordo com o Governo português — isto apesar de o momento ser delicado para o país do Médio Oriente, a braços com o corte de relações anunciado pela Arábia Saudita, os Emirados Árabes Unidos, o Bahrein (que são também os países que fazem fronteira com o Qatar) e o Egipto.

Uma pequena e discreta missão do fundo soberano do Qatar estará em Portugal no final de junho a avaliar várias opções de investimento para que possam ser anunciadas na visita de Estado de julho, em que o emir virá acompanhado também por empresas privadas

Na origem desta decisão está o alegado apoio financeiro do país a grupos terroristas, incluindo o Estado Islâmico, e declarações de apoio ao Irão por parte do líder do Qatar — que o Governo fez questão de desmentir oficialmente. A posição do Governo português relativamente a este conflito diplomático ficou nos mínimos, com o ministro dos Negócios Estrangeiros, Augusto Santos Silva, a declarar simplesmente que “haver cortes de relação entre países é sempre um elemento perturbador“.

António Costa esteve no país que vai acolher o Mundial de Futebol de 2022 no início de maio, numa visita exploratória em que ficou desde logo acordado que o chefe de Estado do Qatar viria a Portugal em julho. Antes disso, na última semana de junho, chega a missão do fundo soberano, apurou o Observador: a equipa, que não deverá envolver mais do que três elementos, vai dar especial atenção à área do turismo e da promoção imobiliária. Mais tarde, com o emir, virá também uma comitiva de empresas privadas, pelo que as áreas de investimento podem ir além daquelas em que o Estado se tem mostrado interessado nos contactos com Portugal.

O que o Qatar já tem em Portugal

Para já, os investimentos qatari no mercado português estão numa fase incipiente, mas marcam presença em setores estratégicos, como é o caso da energia. O seu principal investimento nesta área é uma participação qualificada de 2,27% na EDP – Energias de Portugal, posição que adquiriu em 2011. Na altura, a Qatar Holdings — que é detida pelo fundo soberano do país, o Qatar Investment Authority — assumiu o controlo de 2,01%, num investimento avaliado então em 159 milhões de euros. Essa participação foi entretanto reforçada e, aos valores da cotação no fecho desta terça-feira, está avaliada em 262,24 milhões de euros.

A entrada no capital da EDP em 2011 coincidiu com um aumento dos contactos empresariais, mas também no campo político. Em Dezembro desse ano, a estratégia de diplomacia económica do então ministro dos Negócios Estrangeiros, Paulo Portas, levou-o ao Qatar — um ano depois, foi a vez de gestores do fundo soberano visitarem Portugal com potenciais investimentos na banca e no turismo na agenda.

Resultado disso ou não, o certo é que as opções dos investidores qataris passaram a incluir mais projetos portugueses. Exemplo disso é o investimento na francesa Vinci, empresa de gestão aeroportuária em que o fundo soberano controla 4,01% (uma participação avaliada em 1,8 mil milhões de euros), e que passou a controlar a ANA – Aeroportos de Portugal nos recentes processos de privatização.

Outras áreas na mira dos investimentos do Qatar são o turismo e a promoção imobiliária. A marca W, do grupo Marriott, em parceria com o grupo Nozul Hotels, subsidiária do Jaidah Group, também do Qatar, vai abrir a sua terceira unidade na Europa: um hotel a inaugurar em Albufeira no próximo ano. Estes dois setores, sabe o Observador, têm sido bastante valorizados nos contactos recentes entre os dois países e é provável que sejam fechados novos investimentos e anunciados novos projetos nas próximas visitas.

Portugal é, aliás, um dos mercados no portefólio de investimento do fundo soberano do Qatar, o Qatar Investment Authority. Formalmente criado em 2005 para gerir os recursos financeiros gerados pela atividade de gás e petróleo, o fundo é liderado pelo sheik Abdullah bin Hamad bin Khalifa Al Thani e detém uma carteira de investimentos no mundo inteiro avaliada em perto de 300 mil milhões de euros. Como descreve a Bloomberg num artigo recente, “o Qatar é pequenino e pode ter tantos habitantes como Houston, mas o seu fundo soberano é um dos mais ricos do mundo”.

“Estamos a trabalhar para a que a visita do emir em julho possa já ser coroada com a concretização de várias destas perspetivas”, disse António Costa<br >

Os investimentos feitos por este fundo incluem grandes multinacionais, como é o caso da Volkswagen, onde são o terceiro maior acionista, depois da própria família Porsche (que ainda controla o grupo automóvel) e o Estado da Baixa Saxónia. O portefólio reúne ainda participações em empresas energéticas, como a petrolífera Shell ou a elétrica HK Eletric, de Hong Kong, o grupo Dufry, que gere lojas duty free em 63 aeroportos, de Istambul a Bali, bancos como o Santander Brasil, Barclays e Credit Suisse, ou ainda a marca de joalharia Tiffany, entre muitos outros investimentos de relevo.

Foi ainda bastante mediático o negócio em que o fundo soberano investiu 622 milhões de dólares no Empire State Realty Trust, que controla e gere o simbólico arranha-céus de Nova York e outras propriedades na cidade, como um condomínio de luxo em Manhattan. No imobiliário, um dos grandes focos do dinheiro qatari, são ainda os donos do edifício mais alto da Europa, em Londres: o Shard.


Namoro entre Doha e Lisboa

Em Doha, António Costa não esteve mais de 24 horas, mas chegou para ter encontros com as mais altas autoridades do país e correr as capelinhas todas que podem trazer mais-valias em potenciais negócio, como é o caso da câmara de comércio. Consigo foi também o secretário de Estado para a Internacionalização, Jorge Costa Oliveira, e também Luís Castro Henriques, o presidente da Agência para o Investimento e Comércio Externo de Portugal (AICEP). Os contactos foram sobretudo exploratórios, com Portugal a procurar atrair o interesse de um país que tem no petróleo e no gás natural os pilares da sua economia e Costa veio otimista.

Na altura, o primeiro-ministro português afirmou que “as reuniões, que foram sobretudo políticas, visaram preparar essa visita do emir a Portugal e sinalizar quais são as áreas de cooperação económica e de oportunidades de investimento que existem. Foi muito interessante ver o grande interesse que o Qatar tem neste momento em investir em Portugal”. Citado pela Lusa, Costa deixou ainda claras as expectativas que tem em relação à visita de julho: “Estamos a trabalhar para que a visita do emir em julho possa já ser coroada com a concretização de várias destas perspetivas”.

Países que cortaram relações com o Qatar:

  • Arábia Saudita
  • Emirados Árabes Unidos
  • Bahrein
  • Egipto
  • Maldivas
  • Iémen
  • Líbia

De acordo com informação recolhida pela AICEP, a agência que promove o investimento em Portugal, em 2015, 82,5% das exportações do Qatar envolviam combustíveis e óleos minerais, sendo os seus três principais clientes o Japão (com uma quota de mercado acima dos 20%), a Coreia do Sul e a Índia. Os Emirados Árabes Unidos, agora em conflito diplomático com o país, aparecem como o quinto principal destino. Mas este é o terceiro maior fornecedor do Qatar, o que mostra bem a dimensão das consequências que podem vir do bloqueio aéreo e marítimo imposto pelos Emirados ao país. Em 2015, no top dos produtos mais importados pelo Qatar estavam as máquinas, veículos automóveis e equipamentos elétricos — a dependência externa do país, em termos comerciais, é grande, com o saldo da balança comercial negativo (-4,5% do PIB).

Já com Portugal, a relação comercial é muito diversificada, pelo menos no que toca aos produtos que exporta para este país de apenas 2,3 milhões de habitantes. Porque, quanto a importações, a necessidade do Qatar concentra-se sobretudo nos plásticos e nas borrachas e, em menor quantidade, nos químicos e nas máquinas e aparelhos elétricos. A Portugal compra minerais (sobretudo pedra para construções, ladrilhos, granitos e mármores), madeiras e cortiça (móveis e cortiça aglomerada), mas também máquinas e vestuário.

Do lado português, o investimento das empresas no Qatar tem uma expressão mínima. Empresas na área da construção, engenharia e infraestruturas — caso da MSF Engenharia ou dos grupos Casais e Painhas –, e das marcas de vestuário Zippy e Giovanni Galli, são alguns exemplos dessa presença portuguesa naquele mercado do Médio Oriente.

O esforço de aproximação ao país pode vir a consubstanciar-se, entre outras coisas, na criação de um voo direto Lisboa-Doha, da Qatar Airways, a partir de 2018, com o país do Médio Oriente a poder usar Portugal como um trampolim para aceder mais facilmente a outros países europeus e também ao lado de lá do Atlântico. No país, já houve uma empresa, a Oryx, que confiou a um português a gestão desportiva do clube em que investiu vários milhões de euros (entre os 50 milhões de compra mais a assunção de uma dívida entre os 15 e os 20 milhões): Antero Henrique é diretor desportivo do Paris Saint-Germain.

+++ (BBG) Support for Qatar Could Land You in Jail, U.A.E. Warns Residents


(BBG) Residents of the United Arab Emirates who express support or sympathy for Qatar on social media could face a jail term of up to 15 years, the public prosecutor has said.

The penalties come under the U.A.E.’s strict cybercrime law, introduced in 2012, which stipulates punishments for online acts from defamation to harming national unity. The U.A.E. joined Saudi Arabia and other Arab countries on Monday in breaking diplomatic relations with Qatar and closing transport routes, accusing its neighbor of supporting extremists, including proxies of Shiite Muslim Iran and the Sunni militants of al-Qaeda and Islamic State.

“Strict and firm action will be taken against anyone who shows sympathy or any form of bias towards Qatar, or against anyone who objects to the position of the United Arab Emirates” on any platform, Attorney General Hamad Saif Al Shamsi said in a statement carried by Al Bayan and other local newspapers.

Offenders will face a jail term of three to 15 years and a fine not less than 500,000 dirhams ($136,000). “This decision is to protect the U.A.E.’s national security, its strategic interests and the interest of its people,” Al Shamsi said.

+++ (Mehr News) Iran allows Qatar to use national airspace


(MNA) – Civil Aviation Organization of Iran has provided Qatar Airways with the license to cross the Iranian airspace.

Following the tensions between Arab countries and the ban on Qatari flights to use skies of some Persian Gulf states, the permit was issued by Civil Aviation Organization of Islamic Republic of Iran (CAO.IRI) and at the request of both International Civil Aviation Organization (ICAO) and Qatar.

The license became operation on Tuesday morning and Iran’s CAO announced that all possible capacities will be exploited to establish safe and orderly flow of international air traffic inside the region.

The decision for permit issuance was a result of coordination between international emergency coordination teams and ICAO Middle East (MID) Regional Office.

Majority of flights by airlines of Qatar head North Africa or Southern Europe and, prior to recent movements, Qatari aircrafts would first enter the airspace of Saudi Arabia and then Egypt. Now with imposition of air restrictions, flights from Qatar need to pass through Iran, Iraq and Jordan before entering North Africa.

(Economist) A family feud: Saudi Arabia cuts off Qatar

(Economist) The kingdom is raising tensions with its immediate neighbours as well as with Iran and Yemen.

SAUDI ARABIA and its satellites have repeatedly put their neighbour Qatar on notice, but never as severely as this. In 2014, they temporarily recalled their ambassadors from the tiny, rich Gulf statelet: but on June 5th, Saudi Arabia, the UAE and Bahrain announced they were not only severing diplomatic relations with Qatar, but their air, sea and land links too—meaning that Qatar’s only land border is to be closed. Panic buying is already reported in Qatari shops. Qataris must leave Saudi Arabia within days, and will henceforth be denied entry. For good measure the ambitious young Saudi defence minister and deputy crown prince, Muhammad bin Salman, expelled Qatar’s 1,000-strong force from the coalition he leads against rebels in Yemen.

Qatar is the world’s second-largest exporter of natural gas and will host the football World Cup in 2022, and it has sought to exert influence across the region. Saudi news outlets say the measures are reprisals for Qatar’s support for terrorism, including al-Qaeda. That said, other Gulf states, including Saudi Arabia and Kuwait, have also had to fend off claims that they—or their citizens—have helped to fund jihadists.

There are broader and older grievances at play, rooted in geopolitics and the place of Islam in politics. For decades, Saudi and Emirati officials have blamed Qatar, which protrudes like a sore thumb from the western Gulf, for breaking ranks with the Saudi-dominated six-nation Gulf Co-operation Council (GCC).

Qatar is one of three GCC states that still maintains cordial relations with Iran (Kuwait and Oman are the other two). Its emir, Tamim bin Hamad Al Thani, was quoted expressing reservations about Saudi Arabia’s increasingly belligerent posture against Iran. Qatar also sponsors and provides sanctuary to the Muslim Brotherhood, particularly irking the UAE, which deems the Brotherhood a terrorist group. And it also funds and hosts Al Jazeera, a broadcaster that offers a platform to Arab dissidents everywhere but in Qatar, and which fanned the flames of revolution and armed revolt during the Arab Spring.

For all their ambition, the Al Thanis have little appetite for confrontation. Qatar’s foreign ministry has meekly expressed “deep regret” at the severing of ties. In recent years Qatar has scaled back its public support for the Brotherhood. As tensions mounted in recent days it ejected senior members of the Palestinian branch of the Brotherhood, Hamas, and repatriated a dissident wanted in Saudi Arabia. It has disclaimed a headline criticising Saudi Arabia’s stance on Iran, and described the quote attributed to the emir as “fake news”.

But the isolation is unlikely to end soon. Saudi Arabia has yet to define its demands for restoring ties, and Qatar can expect little solace from other Arab states. Most of them are likely to welcome Qatar’s comeuppance. Egypt’s president and his fellow generals still fume at Al Jazeera for opposing their overthrow of the Brotherhood’s elected president in 2013; so Egypt quickly joined Saudi Arabia in cutting its links with Qatar. Yemen’s Saudi-supported government, and the UAE-backed authority in eastern Libya also declared they are following suit.

Historically, Qatar looked overseas for protection against Saudi bullying. The British kept the Saudis from extending their rule to its coastal protectorates in the 1920s. More recently, Qatar has reached out to an unlikely assembly of Israel, Iran, Turkey and America for support. Of late, though, its alliances have seemed to fray. Israel has deepened its security relationship with Qatar’s rivals, the UAE, and to a lesser extent, Saudi Arabia.

American support may also be less certain. Qatar hosts the largest American base in the Middle East, al-Udeid. Located on the road to the Saudi border, Qataris have long viewed it as their best defence against invasion by land. But many Qataris now fear that America under Donald Trump might be less a regional referee than a Saudi cheerleader. Last month Mr Trump chose Riyadh, the Saudi capital, as the first foreign destination of his presidency, and in return was greeted with Saudi pomp and arms contracts. His foreign policy advisers are reckoned to maintain close ties with Muhammad bin Zayed, the UAE’s de facto ruler, who has been urging America to move its forces there from Qatar for years.

Qatar could look to Turkey, which shares its favourable view of the Muslim Brotherhood and opened a base in the sheikhdom last year. Given his troubles at home, though, Recep Tayyip Erdogan, the Turkish president, might shy from a confrontation with the Al Sauds. That leaves Iran. The two countries jointly manage South Pars, the world’s largest gasfield. In addition, says a cleric close to Iran’s Supreme Leader, Ayatollah Ali Khamenei, Iran has a defence pact with Qatar which commits it to the latter’s defence in the event of a Saudi attack. Already, Iranian officials have offered to send food shipments across the Gulf. Saudi Arabia’s impetuous actions risk further driving Qatar into the arms of Iran, and increasing the danger of armed confrontation with Shia state. In response to nervousness about both outcomes, oil and gas prices are rising.

+++ (BBG) Saudi-Led Alliance Cuts Ties With Qatar

(BBG) Saudi Arabia and three other Arab countries cut off most diplomatic and economic ties to Qatar, in an unprecedented move designed to punish one of the region’s financial superpowers for its ties with Iran and Islamist groups in the region.

Oil gained and Qatari stocks plunged after Saudi Arabia, Bahrain, the United Arab Emirates and Egypt said they will suspend air and sea travel to and from the Gulf emirate. Saudi Arabia will also shut land crossings with its neighbor, potentially depriving the emirate of imports through its only land border. Qatar 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 is one of the world’s richest countries and of strategic importance, being the biggest producer of liquefied natural gas. A country with a population smaller than Houston, its $335 billion sovereign wealth fund holds stakes in companies from Barclays Plc and Credit Suisse Group. It also hosts the forward headquarters of CENTCOM, the U.S. military’s central command in the Middle East.

Emboldened by warmer U.S. ties under President Donald Trump, the Saudi-led alliance is seeking to stamp out any opposition to forming a united front against Shiite-ruled Iran. And while Monday’s escalation is unlikely to hurt energy exports from the Gulf, it threatens to have far-reaching effects on Qatar.

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)

“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.”

Brent crude rose as much as 1.6 percent to $50.74 a barrel on the London-based ICE Futures Europe exchange, before paring gains to 0.4 percent at 8:34 a.m. in London. Heightened tensions between Saudi Arabia, the world’s biggest crude exporter, and Iran typically draw market attention to the Strait of Hormuz, through which the U.S. Department of Energy estimates about 30 percent of the seaborne oil trade passes.

Qatar’s QE Index for stocks tumbled 8 percent, the most since 2009 at 10:13 a.m. in Doha. Dubai’s benchmark index fell 1.2 percent.

The five 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 the Silicon Valley.

Secretary of State Rex Tillerson said it’s important that the Gulf states remain unified and encouraged the various parties to address their differences. Speaking at a news conference in Sydney, 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 action is an escalation of a crisis that started shortly after Trump’s last month trip 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.

“Qatar is right in the middle of the GCC countries and it has tried to pursue an independent foreign policy,” said Peter Sluglett, director of the Middle East Institute of the National University of Singapore. “The idea is to bring Qatar to heel.”

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.

The Gulf nation also played a key role in supporting anti-regime movements during the Arab Spring, acting against Saudi and U.A.E. interests by bankrolling the Muslim Brotherhood’s government in Egypt. Qatar also hosts members of Hamas’s exiled leadership and maintains ties with Iran.

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 cited Qatar’s support of “terrorist groups aiming to destabilize the region,” including the Muslim Brotherhood, Islamic State and al-Qaeda. It accused Qatar of supporting “Iranian-backed terrorist groups” operating in the kingdom’s eastern province as well as Bahrain.

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.

“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.”

+++ V.V.I. (FT) Qatar National Bank hit by cyber attack

(FT) Qatar National Bank, the gas-rich Gulf state’s leading lender, has been rocked by a data leak that has exposed the personal details of many of its clients in a file posted on social media that singles out some Al Jazeera staff and purports to identify security officials.

The leak contains references to thousands of alleged transactions records of QNB customers, including remittance data to global banks with thousands of alleged beneficiary names and account numbers.

The 1.4GB leaked file includes the names and passwords of thousands of QNB customers. Subfolders within the leaked data file individual details into folders including staff at Al Jazeera, members of Qatar’s ruling al-Thani family, and intelligence and defence officials.

One former QNB customer mentioned in the file, who has since left the country and declined to be identified, confirmed to the Financial Times that his details posted online were accurate.

Another folder titled “Al-Qaradawi” contains the details of Yousuf Abdullah al-Qaradawi, the same name as the controversial spiritual leader of the pan-Arab Muslim Brotherhood, whose longstanding presence in Qatar has been a source of consternation to some of Doha’s neighbours, especially Egypt and the United Arab Emirates.

One folder, marked “Spy, Intelligence” refers to individuals and internal Qatari security agencies. One file identifies a British customer as “MI6,” an apparent reference to the UK’s overseas intelligence service.

Some of those identified as “spies” are French, British and US nationals based in Qatar. The hacker has compiled more comprehensive data on some targets, including social media profiles.

Simon Edwards, a cyber security expert with security software company Trend Micro, suggested this points to a campaign to target these so-called “spies” with phishing and other cyber attacks.

The hacker breached QNB’s online defences as far back as July 2015, according to Mr Edwards.

This is the work of a hacker — we can see the log file of the secret insertion tool he used

Simon Edwards, cyber security expert

“This is the work of a hacker — we can see the log file of the secret insertion tool he used,” said Mr Edwards. “They have been in there since July, pulling data out of the data base and then worked within the environment and profiling a lot of the customers.”

The focus of the infiltration appears to have been logging transactional data, rather than stealing money, he added. The hacker was profiling the data on the bank’s computers, rather than using a different machine.

“He was not after financial data per se or just stealing, the aim was to look for something specific, trying to put together foreign transactions, or trying to find movement of money to foreign agencies,” he said. “This has the hallmarks of someone in Qatar trying to find dodgy transactions or someone trying to expose something in Qatar.”

Security experts said the bank’s online defences were using vulnerable software that appear to have been breached by fairly common infiltration methods.

State-controlled QNB has said it is investigating the matter, which it referred to as “social media speculation in regard to an alleged data breach”. QNB said it did not comment on reports circulated via social media but assured “all concerned that there is no financial impact on our clients or the bank”.

“QNB Group places the highest priority on data security and deploying the strongest measures possible to ensure the integrity of our customers’ information,” it added.

Rising tensions in the Middle East, pitting Shia Iran against Sunni Saudi in proxy battles from Syria to Yemen, have spilled over into cyber space.

While the Gulf states have become more aware of cyber threats since an Iranian cyber attack on Saudi national oil group Saudi Aramco in 2012, security consultants say defence measures need to be improved.

A KPMG cyber security survey in the UAE last year found that companies under attack take up to a month to recover, while only half of the respondents had contingency arrangements in place for a cyber attack.ssdeuiokmthmop

+++ (FT) Qatari investor rallies behind Deutsche Bank chairman

(FT) The Qatari investor that owns the second-biggest stake in Deutsche Bank issued a rare public statement supporting Paul Achleitner as the chairman of Germany’s biggest bank, despite a sharp fall in the value of its shares.

The announcement was made on Wednesday by Paramount Services Holdings, one of the vehicles through which Sheikh Hamad Bin Jassim Bin Jaber Al Thani — known as HBJ — took a 6.1 per cent stake in Deutsche in 2014.

It provided a much-needed boost for Mr Achleitner, who has been chairman of Deutsche’s supervisory board for almost four years.

He is facing pressure from investors over the bank’s weak performance — its shares have fallen more than 50 per cent in the past year — amid speculation that he may not win a second term when his contract expires next year.

Germany’s Manager Magazin quoted a person close to HBJ’s family saying Mr Achleitner “will not be part of Deutsche Bank’s future beyond 2017”. The Al Thani family owns 6.1 per cent of Deutsche split equally between Paramount and another entity — Supreme Universal Holdings.

Paramount’s statement, first reported by the Financial Times, rejects this, saying it “does not believe it would be in shareholders’ interests for Supervisory Board chairman Paul Achleitner to relinquish his position in 2017, after his current term expires”. It adds that Mr Achleitner’s “leadership remains an important factor underlying Paramount Services Holdings’ investment case and confidence in Deutsche Bank”.

Paramount says it “believes that speculation about its views have the potential to create uncertainty, which is why it decided to issue a public statement”. Deutsche declined to comment.

However, other investors say Mr Achleitner might still struggle to win enough support to secure a second term next year, unless the performance of Germany’s biggest bank improves rapidly before then.

One big investor in Deutsche said: “Achleitner doesn’t have to go now, but whether his contract should be extended beyond 2017 is an open question.”

[Achleitner’s] leadership remains an important factor underlying Paramount Services Holdings’ investment case and confidence in Deutsche Bank

Paramount Services Holdings

A top-20 investor said: “If Deutsche’s strategy is showing signs of working then Achleitner could try to go for a second term. But if their profitability is not improving then investors would have to think about further steps.”

Last year, Mr Achleitner oversaw a shake-up in the bank’s senior management, hiringJohn Cryan to replace Anshu Jain as co-chief executive and to take full control when fellow co-chief executive Jürgen Fitschen steps down this year.

The Deutsche chairman had previously spent 12 years on the management board of German insurer Allianz and, before that, 11 years at Goldman Sachs, and is seen as one of the best connected figures in German finance.dfgbvn