What's Really Going On With Qatar

June 7th, 2017 | R. Rados
qatar

The situation between Qatar, Saudi Arabia and the UAE has been on edge for a while, but things recently went sideways coincidentally following Donald Trump's visit to Saudi Arabia and following the latest arms deal approved between the US and Saudis. Qatar has been doing small things that go against the US-Saudi strategy in the Middle-East for years, but it all seems to have suddenly reached an inevitable point of no return. The media has been quick to blame Trump and Russia for what's happening, but in leaked emails Hillary Clinton said, “We need to use our diplomatic and more traditional intelligence assets to bring pressure on the governments of Qatar and Saudi Arabia.” This suggests that some of what we're seeing now would have probably happened under a Clinton administration as well.


Knowing where some of this started might give us a better understanding of where it might go. For years, Qatar has been pushing buttons it shouldn't be pushing, so it was only a matter of time before the situation would unravel.



Transfer Of Power


In 2013, Qatar's emir, Sheikh Hamad bin Khalifa Al Thani, handed power to his son in what the media called a “surprising and historic” transition. Before the transfer, Sheikh Hamad's son, Sheikh Tamim, was always meant to be the eventual heir, but his policies were more of a mystery. Up until the transfer, Qatar had helped US-backed Syrian rebels and aided the US-Saudi strategy in the Mid-East. With Sheikh Tamim in power, things started to become more uncertain.


Before Tamim took power, Qatar had begun to pull back on its support for Syrian rebels. Under Tamim, however, there as been a continued support for the US strategy and support for Syrian rebels has continued. Some say the problem lies within Qatar's support for other groups and organizations in the region, including the Army Of Conquest, but that's just an excuse.


The Army Of Conquest is one of several groups vying for dominance in Syria. Unlike the rebels backed by the US, Army Of Conquest is a coalition of Arab forces and groups that include direct links to Al-Qaeda and the Muslim Brotherhood. The only thing is, both Turkey and Saudi Arabia have also allied with Army Of Conquest. So what's the problem?


Other antithetical policies of young Tamim are undoubtedly to blame...



One Billion Dollars To Iran, Al-Qaeda And Syria


In April, Qatar secured the release of 26 hostages that were being held by Shiite rebels backed by Iran. Among the 26 hostages were members of Qatar's royal family who were kidnapped during a hunting party in Iraq. The catch is that Qatar, under Sheikh Tamim, paid the hostage takers and Iran one billion dollars for their release.


The money—similar to Obama's highly controversial “ransom” payment to Iran—went to an enemy nation and unfriendly terrorist groups.


The Financial Times reported that $700M went to Iran and Shiite terrorists, while $300M was paid to Syria and Al-Qaeda affiliated groups. That equates to one billion dollars in aid to geopolitical enemies of the United States and Saudi Arabia. However, Qatar's shenanigans still go back a bit further than that.

Bailing Out Russian Oil


Since the mostly deliberate global collapse in oil prices, Russia and its economy have been in chaos. Since 2014 and the annexation of Crimea, the ruble has lost significant value and Russia's largest oil companies have been forced to take massive financial losses. This should be considered a good thing for the United States and its allies because it knocks Russia's military and economic capabilities down to a more manageable level. So, why then would Qatar help one of Russia's largest oil producers stay afloat?


As Mitt Romney succinctly stated in 2012, Russia is the US's biggest geopolitical adversary. In December of 2016, Qatar, along with Glencore, purchased an $11B stake in one of Russia's largest oil and gas companies, Rosneft. But, as the BBC noted, Moscow maintained its controlling stake in the company.


What's Glencore? It's a large Swiss commodities and mining company that has faced criticism for dealing with rogue, unfriendly nations and has been accused of manipulating the financial data of one of its subsidiaries, Mopani Copper Mines, in Zambia to avoid paying taxes. Furthermore, the Qatar Investment Authority is one of Glencore's biggest investors.


In 2004, the CIA alleged that Gelncore had paid Saddam Hussein millions in kickbacks to acquire lucrative oil deals. Now, the company is helping to prop up one of Russia's struggling oil companies with Qatari money.


The BBC reported on this planned sale of Rosneft in December:



The surprise move sees Glencore and Qatar paying $11.3bn for the stake in Rosneft, where BP already owns 19.75%.

Moscow will keep the controlling stake.

The long-planned sale is part of the Russian government's efforts to sell some state assets to help balance the budget amid a two-year recession caused by a drop in global oil prices and Western sanctions.

A deadline for the sale was missed, and speculation grew that Rosneft was struggling to find a buyer.

The deal also marks a turnaround for London-listed Glencore, which had seen a collapse in its share price amid a plan to sell assets and cut its huge debts.

Glencore's shares have rebounded this year. The Qatar Investment Authority is one of the biggest investors in Glencore.”


In a public statement, Glencore also admitted that only $300M of its own money would be used to purchase a stake in Rosneft and that the rest would come from Qatar and various banks.



Venezuela


Russia wasn't the only anti-American nation Qatar would try to help during the collapse in oil prices. One of the biggest victims of the oil collapse is Venezuela, a country where oil makes up 95% of export revenue. Combined with socialism, oil prices have taken Venezuela to the verge of collapse in recent months.


In 2015, Nicolas Maduro announced that Venezeula would be getting “several billions” in support from Qatari banks. At the beginning of 2015, the global oil glut was considered temporary but, as forecasts suggest, it could continue all the way through 2017 and into 2018. At the time, the billions Qatar gave to Venezuela was meant to “weather” the storm.


Who else jumped to Venezuela's rescue in 2015? Our good friends in Iran. As reported in January of 2015:



President Maduro visited the Iranian capital while touring fellow OPEC countries to discuss falling oil prices, which both leaders attribute in part to a production surplus caused by increased US extraction through fracking. 

Venezuelan oil, which accounts for over 95 percent of the country’s export earnings, fell last week to under $43 a barrel- less than half of its value in June of 2014. 

Despite repeated appeals from Venezuela and other smaller OPEC members and a confirmed surfeit of about a million barrels per day, the cartel of petroleum countries has refused to curtail oil production- a resolution spearheaded by the group’s primary exporter, Saudi Arabia.”


Venezuelan oil, which accounts for over 95 percent of the country’s export earnings, fell last week to under $43 a barrel- less than half of its value in June of 2014. 


Despite repeated appeals from Venezuela and other smaller OPEC members and a confirmed surfeit of about a million barrels per day, the cartel of petroleum countries has refused to curtail oil production- a resolution spearheaded by the group’s primary exporter, Saudi Arabia.”Venezuela Analysis



Iran's president, Hassan Rouhani, told Maduro that efforts by Saudi Arabia and the US were a part of a geopolitical war and that Iran and Venezuela would fight their enemies, who are “using oil as a political ploy”. Rouhani and Maduro also made agreements involving tourism and construction.


Since taking power, Sheikh Tamim has taken Qatar off course. Much of this could have, arguably, started before the transfer of power from his father, but it's been within recent years that Qatar has noticeably started to drift away from the United States and its global geopolitical strategy. Allegations of Russian hacking and the permeation of false news stories could be the sparks that ignite a situation that was already doused in gasoline.