Saudi-Led Arab Alliance Breaks Ties With Qatar

Saudi Arabia and three other Arab nations have cut their diplomatic and economic ties to Qatar, as punishment for supporting the Iranian Regime and terrorist groups in the Middle East.

Qatari stocks plunged after Saudi Arabia, Bahrain, the United Arab Emirates and Egypt announced that they would suspend air and sea travel to and from the Gulf nation.

Saudi Arabia, who borders Qatar, announced that they would also suspend land crossings, which would cut off its only land trading route.

Qatar called the allegations of cooperation with terrorist cells “baseless” and referred to this plan as an attempt to “impose guardianship on the state, which in itself is a violation of sovereignty”.

Qatar is one of the world’s richest countries, especially in terms of GDP, as it has a population smaller than Houston, Texas. It is also the biggest producer of liquefied natural gas and has a $335 billion sovereign wealth fund which holds stakes in companies like Barclays Plc and Credit Suisse Group. Qatar is also the location of the headquarters of CENTCOM, the U.S. military’s central command in the Middle East.

Reportedly the Saudi-led alliance wants to remove any opposition to a military front against the Iranian Regime, labelled the number on state supporter of terrorism by the US State Department.

This is something that the US is highly in favour of. Secretary of State Rex Tillerson expressed the need for unity to counter extremism and noted that regional crises do no undermine the war on terror.

Tillerson said: “What we’re seeing is a growing list of some irritants in the region that have been there for some time. 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.”

Following Donald Trump’s visit to the Middle East at the end of May, in which he made a speech about the importance of tackling extremism and directly confronted the threat posed by Iran, the Qatari ruler Sheikh Tamim bin Hamad Al Thani criticised him for an anti-Iran stance.

This, in turn, drew criticism from the Saudi and the UAE.

Although this move is unlikely to hurt energy exports from the Gulf Region, it may have a great impact on Qatar for years to come.

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

Paul Sullivan, a Middle East expert at Georgetown University, said: “Qatar is economically and socially most vulnerable from food and other non-energy imports. 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.”