In the past two weeks, tensions were rising significantly between Qatar and some Arab countries, mostly GCC countries.
The Arab countries including Saudi Arabia, UAE, Bahrain, and Egypt issued an ultimatum to Qatar, giving 10 days to react to these demands. Otherwise, threatened Saudi Arabia, things will escalate further.
Qatar did not respond during the 10 days and asked for 48 hours extension. The countries agreed, but then Qatar refused the demands in full.
Yesterday, everyone was waiting for the press conference that was held in Cairo, which was supposed to hold new decisions and measures by the four countries against Qatar.
The surprise was that there are no new measures announced. They just decided to tell the world that Qatar is not accepting their demands, with no further info. But they announced that they would meet once again to discuss the new measures in the coming weeks.
What Are The Demands And Why?
This is not the first time the GCC countries cut their ties with Qatar. A few years ago, the GCC countries decided to withdraw their diplomatic missions, as there was evidence that Qatar is supporting terrorism in many areas and we didn’t know what were the reasons behind these actions.
Also, Qatar is hosting many of the blacklisted names in the Middle East, especially those who belong to the Muslims Brotherhood in Egypt, and Qatar refused to extradite them despite the fact that they are charged with multiple criminal offenses.
This time, the four countries claim they received a significant evidence that Qatar is supporting terrorism, and it seems that the evidence is very clear and convicts Qatar directly, leading them to take such decisions to cut the ties with Qatar in full.
The Arab countries are demanding Qatar to cut its relations with Iran, as it is considered that it played a significant role in destabilizing the region since the break of the civil war in Syria.
They are also demanding to stop hosting accused people and expel them immediately. They even asked Qatar to close its biggest TV network Al Jazeera as it also played a significant role in destabilizing the region by spreading fake news, according to the statement.
This Won’t End Well
Whether this story is right or wrong, whether Qatar is supporting terrorism or not, this won’t end well, especially for Qatar.
Qatar is now in the corner where no one would like to be, especially having only few options in hand.
Qatar is isolated, and it costs the country billions of dollars every day. Shipping cost is now 10 times higher, while the central bank is fighting to keep the Qatari Riyal stable.
This are only first 10 days of the isolation. The question is how it will be when the four countries decided to escalate further in the coming days? How will Qatar respond? What would Iran do?
No one knows. But it looks like the summer temperature in the region will be higher than ever before.
Any Effect On Crude Oil
Probably not, OPEC production cut deal is unlikely to be affected, even if Qatar decides to withdraw from the deal.
Qatar agreed to cut 30K barrels of oil, which is nothing compared to the rest of the producers. If this happens, OPEC and Non-OPEC members can easily distribute the 30K barrels between the rest of the countries.
Why Oil Declined Yesterday?
This has nothing to do with the tensions of Qatar with GCC. It was all about Russia, who stated that they will refuse any new plan for a deeper cut in production whether now or later.
Moreover, the UAE also noted that there are no talks about a possible deeper cut in production anytime soon.
Such remarks keep the pressure on Crude prices and as we noted before, Crude Oil needs actions and not remarks. Therefore, the downside pressure is here to stay.