Qatar: The Arabian Night Of The Long Knives

Qatar

Qatar went from the world’s richest country per capita to an existential crisis in 24 hours this week.  And the tiny gas-exporting giant is faced with making decisions quickly or be overwhelmed by geopolitical realities.  This is why the Qatari foreign minister is set to meet with the top Russian diplomat, Sergei Lavrov, on Saturday.

The question at this point is whether Qatar has that much time?

Qatar, along with Saudi Arabia, has been one of the biggest sponsors of radical terrorism in the world.  Syria was their latest major project.  Destroying Syria’s Ba’athist government was on the agenda for so many players in the region that it was only a matter of time before such a project got off the ground.

But, that project has failed thanks to skillful military and diplomatic interventions by both Russia and Iran.  Qatar realized this after Donald Trump won the presidency and immediately moved to patch things up with Russia.

Russian Roulette

This is why the Qatar Investment Authority, the Qatari sovereign wealth fund, put up $2.6 billion to buy a stake in Russian state oil company, Rosneft.  At the time, this news rang odd.  Now, however, it makes perfect sense.

Qatar could see the writing on the wall in Syria and began charting an independent course in the post-ISIS world.  December saw the siege of Aleppo end, a battle that could only have ended if logistical support of the rebels holed up in the eastern half of the city had been cut off.

When Donald Trump announced to the entire Arab world that for them to have U.S. support going forward they would need to lay down their backing terrorism as a means of achieving political and economic goals.

Those days were over.

The Saudis are the leaders here.  And it is obvious that Qatar is the scapegoat to be sacrificed to forge a brave new, Arab world.

Both the Saudis and Qataris have been cozying up to Russia.  But, the Saudis have always left empty-handed.  And Qatar had to buy access.  Both had to agree to ending their support of terrorism, but the Saudis want Qatar to repudiate Iran completely and Qatar won’t do that.

Moreover, Qatar’s dominance in the gas trade extends over its Gulf Cooperation Council peers, as outlined in a great article at Zerohedge on Tuesday.

It’s the Petrodollar, Stupid

So, considering this the Saudis have issued ultimatums to Qatar to stop backing the Muslim Brotherhood and turn its back on Iran or face annihilation.  The GCC members embargoed any ships coming and going from Qatar.  The problem is the Saudi military is the best-equipped bunch of incompetents in the region.  And no amount of Trump dealing will improve that this week.

Which brings us to why Turkey is now moving to defend Qatar with troops and food shipments.  As I pointed out in my last article, nearly half of Qatar’s food crosses the Saudi-Qatari border.  Don’t think this move doesn’t have Putin’s approval.  He was the first person Turkish President Erdogan called.

The next morning the Turkish parliament fast-tracks a bill to reinforce Turkey’s base in Qatar.

Iran has pledged to keep its ports open to Qatar in open defiance of the Saudis, especially after accusing them of the attack on the Iranian Parliament and tomb of Ayatollah Khomeini on Monday.

Things are accelerating rapidly.  This whole thing has the stink of the U.S. deep state all over it.  I’m unconvinced Trump has much, if any, say in this.  But, I can’t rule it out either.

Because, at the heart of this sits the petrodollar.  Qatar recently approved a Yuan-clearing center in Doha.  Do you think this is for clearing that huge Qatari/Chinese sand for cheap LED flashlight trade?

Or do you think it’s for LNG?

So much of Trump’s domestic policy depends on defending the petrodollar system for as long as possible.  And allowing Qatari LNG to settle in other currencies is a red line for U.S. financial interests.

But, that said, I don’t see the U.S. using its troops there to influence a Turkish defense of a Saudi invasion.  Instead it’ll be Game of Thrones time inside the royal palace.

The Next Moves

When you issue ultimatums like the Saudis have you either go through with them or get called.  The master in calling bluffs is Putin.  But, he wants what Trump says he wants, an end to Arab infighting over oil and gas market share that funds chaos and jihadists.

From my perspective, it looks like Qatar has stopped backing al-Qaeda in Syria (Jabhat al-Nusra) and the Saudis have stopped backing ISIS.  The next step is for Qatar to end its relationship with Hamas.  That will make both Trump and Putin happy.

Nothing will make the Saudis happy short of claiming Qatar’s gas fields for itself and destroying Iran.

Russia and Iran are committed to not letting the U.S. get forward bases in soon-to-be negotiated Kurdistan with missile and aircraft pointed at both of them. But, that’s what our regional policy looks like.  Even though they are snakes, each day Qatar’s leaders avoid regime change the odds rise of them surviving this latest geopolitical gambit.

Their political ambitions will be subordinated to that of Iran’s and Russia’s but their money will no longer buy death around the region.

And if they do, expect the Gulf Cooperation Council to implode as the knives wielded currently by the Saudis get turned back on them.

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About the Author

Tom Luongo
Tom Luongo is a Senior Financial Editor at Newsmax Media, Author of the Resolute Wealth Letter Tom is also a professional chemist, amateur dairy goat farmer and outspoken Austrian Economist. You can follow him at:” Twitter: twitter.com/tfl1728 Gab.ai/tfl1728 Periscope: www.periscope.tv/tomluongo