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Qatar Begins Turning Its Back On The US Dollar

Public Policy

Late last week, Saudi Arabia and other members of the Gulf Cooperation Council (GCC) that are involved in attempting to isolate Qatar sent the tiny Gulf nation a list of 13 demands. They are insisting that Qatar meet these demands within ten days or face unspecified further action.

The list of demands includes Qatar shutting down Al-Jazeera and its affiliate stations; shutting down other news outlets that Qatar funds, including Middle East Eye; curbing diplomatic ties with Iran and expelling members of Iran’s Revolutionary Guard; terminating the Turkish military presence in Qatar; consenting to monthly audits for the first year following acceptance of the demands, and aligning itself entirely with the other Gulf and Arab countries militarily, politically, socially, and economically – to name but a few.

The most ludicrous of the demands is that Qatar must end its interference in sovereign countries’ internal affairs. Qatar does interfere in a number of countries, including Libya and Syria, but as the German Foreign Minister explained, this list of demands directly challenges Qatar’s sovereignty. Who is interfering with whose sovereignty, exactly?

Unsurprisingly, Qatar has dismissed the list of demands as neither reasonable nor actionable. Surely, the Saudi-led anti-Qatar alliance is aware of this. It would be tantamount to asking Great Britain to shut down the BBC and expel American troops – it just wouldn’t happen. All of the world’s major newspapers are complicit in running state-sanctioned propaganda, and singling Al-Jazeera out is hardly fair or practical.

In that context, Saudi Arabia and its friends have given Qatar a list of demands they cannot conceivably meet and imposed a ten-day deadline to concede or face unspecified further action. Qatar was essentially doomed from the start of this rift, and it’s only just beginning. As Newsweek lamented, “the demands are designed to be impossible to comply with.”

The UAE has warned that Qatar is now facing indefinite isolation and that the economic and political sanctions are likely to become permanent. Taken together with the recent promotion of the Saudi King’s son, Mohammed bin Salman, now first in line to the throne, things are indeed heating up against Qatar. Prince Salman is widely regarded as one of the main proponents behind the Saudi-Qatar rift.

The ultimate agenda of the Saudi-led alliance is to deter Qatar from continuing its relationship with Iran, Saudi Arabia’s regional arch rival. But even the Guardian notes that “cutting ties to Iran would prove incredibly difficult,” as Iran and Qatar share a massive offshore natural gas field that supplies Qatar with much of its wealth. In fact, Iran immediately came to Qatar’s aid and began supplying the country with food after the Saudi-led sanctions created a shortage within the country. Shaking off Iran and Turkey —the two countries that have stood by Qatar’s side during this feud — is almost unthinkable. Qatar would be left without a single ally on either side of the Middle East region.

Qatar was initially among a handful of countries, including Turkey and Saudi Arabia, that wanted to install a natural gas pipeline through Syria and into Europe. Instead, the Syrian government turned to Iran and Iraq to run a pipeline eastward and cut out the formerly mentioned countries completely. This is precisely why Qatar, Saudi Arabia, and Turkey have been among some of the heaviest backers of the Syrian opposition fighters. This pipeline dispute pitted the Sunni Gulf States against the Shia-dominated bloc of Iran, Iraq, and Syria (Syria’s president is from a minority denomination of the Shia sect of Islam). Although Iran and Qatar shared this lucrative gas field, they were directly at odds in regard to how the field should have been utilized.

Not long after Bashar al-Assad’s proposed deal with Iran and Iraq was announced, foreign fighters began to flood the country. Syria was demonized at the outset, even though then-Secretary of State John Kerry dined with Assad two years before the conflict erupted. It should be clear that Washington’s issues with Assad are not rooted in human rights concerns considering the dictator had been in power for 11 years and was notorious for human rights abuses in the period before the so-called revolution began.

Though Qatar has been heavily involved in arming the Syrian opposition and calling for Assad’s departure (Assad being an integral Iranian ally), Qatar actually maintains an independent foreign policy agenda of its own. Over the past two years, Qatar has conducted over $86 billion worth of transactions in Chinese Yuan and has signed other agreements with China that encourage further economic cooperation.

This is incredibly important because Qatar shares its major natural gas reserve with Iran, and Iran also conducts its oil-related business deals with China in Yuan. Shortly after the nuclear accord reached in 2015, the Islamic Republic sought to capitalize on these economic opportunities by ramping up production on their share of the Iran-Qatari gas reserve. In November 2016, Iran signed a deal with France’s Total, a multinational integrated oil and gas company, to develop this project. Iran is expected to surpass Qatar’s gas production by next year, and Qatar was left with little choice but to join the venture. It lifted a self-imposed ban on developing the gas field in April of this year.

If Iran and Qatar continue down this path, the U.S.’ self-asserted hegemony over the world’s financial markets will directly come under attack, and rising economic and military powers like Russia and China will continue to reap the benefits.

Remember that Hillary Clinton’s leaked emails confirmed that the U.S. and France were so concerned with attacking Muammar Gaddafi in Libya not out of humanitarian concern, but rather, out of fear of his plan to unite Africa under a single gold-backed currency that would be used to buy and sell oil on the global markets.

Remember that in 2000, Saddam Hussein announced he would sell Iraqi oil in euros, and the Guardian reported in 2003 that Iraq had actually netted a handsome profit in doing so — at least until the U.S. invaded not long after and immediately switched the sale of oil back to U.S. dollars.

Perhaps it sounds like a conspiracy theory (even with Clinton’s leaked emails as evidence), but it’s important to ask why Saudi Arabia is so concerned with Qatar, if not for economic reasons? Because of Qatar’s support for terrorism? Hillary Clinton’s leaked emails also revealed that both Saudi Arabia and Qatar financially sponsored ISIS – making such a rationale hypocritical beyond belief.

Pot. Kettle. Black.

The push to oust Assad in Syria has almost all but failed, and Qatar, learning from its mistakes, is not relying on Assad’s departure to maintain its vast supply of wealth (though it would probably still welcome such a move). As Counterpunch explains:

“The failure of this insurgency, however, has spelled the death of this proposal, leaving Qatar bound to look East to Asia – already their biggest customers – for their LNG markets. But most of the existing Eastbound LNG pipeline infrastructure is controlled by Iran. For Qatar, then, cutting its Iran links would be cutting off its nose to spite its face. This is why the Saudis aim to demonstrate that the alternative is having their entire face cut off.”

How far in Saudi Arabia’s face-cutting agenda against Qatar these Gulf State adversaries will go is unclear, but Qatar has already seen some heavy-handed treatment in the early stages of this conflict. Further complicating the issue is the fact that Qatar hosts the largest U.S. military base in the region, with 11,000 troops currently stationed there.

Further, the U.S. just recently implemented a policy to target Iran for regime change. President Trump met with Saudi Arabia and the GCC nations earlier this year and sword-danced and sabre-rattled his way down a warpath with Iran. Trump’s military has been striking down Iranian drones and Iranian-backed troops in Syria, and the White House has just launched fresh accusations against the Syrian government regarding an attack that hasn’t even happened yet.

Clearly, Qatar cannot meet Saudi Arabia’s demands, and Saudi Arabia must be completely aware of this. As we have seen in Yemen and Syria, Saudi Arabia almost always resorts to outright brutality in order to bully non-compliant states into submission. As we have also seen in America’s treatment of Iraq and Libya, countries that depart from the U.S. dollar are not met kindly by the American military, either.

In this context, expect this rift to heat up on multiple fronts. We may very well be witnessing Qatar’s denigration into a Syrian or Yemeni-style battlefield in the months to come.

Let’s hope this is not the case.

7 Comments on "Qatar Begins Turning Its Back On The US Dollar"

  1. Go Speed Racer on Thu, 29th Jun 2017 7:44 pm 

    Hillary Clinton can go be President of Qatar.
    Gets her off our land.

  2. newfie on Thu, 29th Jun 2017 8:49 pm 

    Whaaaat ?

  3. BillC on Thu, 29th Jun 2017 9:39 pm 

    israel rules

  4. Cloggie on Fri, 30th Jun 2017 2:27 am 

    This could very well become a cause for fossil fuel shipments from the Gulf being halted and a major oil crisis. Putin will love it as the price for his merchandise will skyrocket. And it will push the Europeans into the arms of the Russians. It’s also very good for offshore wind in NW-Europe, if Europe gets once again reminded of its energy vulnerabilities.

    The big picture…

    very important is that Erdogan couldn’t care less about this so-called Sunny-Shia divide. He has reasonable relations with Iran and both Turkey and Iran support Qatar. If it were up to Erdogan, Turkish and Iranian troops would together liberate Palestine. Turkey, Iran and Qatar wouldn’t mind to see the angry Arab masses topple the ‘House of Saud’, the ally of the US and planetary dollar cat flap.

    KSA is playing with fire. For them Sunni-Shia divide IS important, but unfortunately all their oil provinces happen to be majority Shia, a reason for extra concern for Riyadh.

    Qatar is militarily a fruit fly compared to KSA. Qatar is not Yemen, this should be an easy bite to swallow. And these 11,000 stationed US soldiers will not lift a finger if KSA invades. It remains to be seen if Iran and Turkey will declare war on KSA, I tend to think not, but other measures, yes.

    Interesting is that Iran, not KSA, controls access to the Gulf. The US might be tempted to break a possible Iranian blockade under the pretext of keeping oil flowing.

    Hillary Clinton can go be President of Qatar. Gets her off our land.

    How about her belly dance skills?

  5. Cloggie on Fri, 30th Jun 2017 5:02 am 

    What is happening in the ME now is a direct consequence of the defeat of the US/UK 2011 scheme to topple Assad in Syria, which failed miserably:

    Another clear sign that US geopolitical dominance and ability to steer events is waning. ISIS capital Raqqa and its 4000 warriors are now completely surrounded and will likely fall soon.

    It is obvious that KSA and Qatar have already factored in this defeat and are busy with a follow-up strategy.

    And what a major victory for Iran this would be if the governments or Baghdad and Damascus would manage to regain control over most of their old countries and could consolidate their victory. Because it would reopen the possibility of a pipeline Iran-Iraq-Syria to the Mediterranean after all, to service lucrative European markets, one very important reason why this war of foreign mercenaries happened in the first place. The US-UK wanted Europe to be serviced by countries that were vassals of the West (Qatar, KSA and post-Assad Syria), rather than adversaries (Iran-Iraq-Assad-Syria).

  6. rockman on Fri, 30th Jun 2017 8:55 am 

    “Qatar is militarily a fruit fly compared to KSA.” With a single mission the Qatar air force could destroy most of the Saudi oil export capability for many months. The KSA weak spots are not the wells but it export terminals on the coast. Those terminals are also vulnerable to land based rocket attack.

    The KSA has long recognized that vulnerability which is why it has been working on an alternative. From

    “State oil giant Saudi Aramco plans to launch its overhauled Muajjiz oil terminal on the Red Sea next year, lifting its total loading and export capacity to as much as 15 million barrels per day, Saudi officials said.”

    Not an easy target as terminals in the Persian Gulf but still susceptible to an airstrike. Also the Qatar military is armed with the Exocet MM40 Block 3 and Marte ER anti-ship missiles. Given the British navy was unable to protect one of its warships from an Exocet that was several generations older then the current version all the oil export terminals would seem vulnerable.

    Given the Exocet capability of skimming just a few meters above the waters radar defenses wouldn’t see it coming until just a few thousand meters away. A lesson the Brits paid a big price for as it lost a mainline warship to a country with a military as unimpressive as that of Qatar.

  7. Midnight Oil on Fri, 30th Jun 2017 12:59 pm 

    outburst from the former Exxon CEO came after disagreements with the White House on issues including Qatar, where he has tried to mediate in the dispute with other Arab nations, only to be publicly undermined by President Trump. Insiders tell the New York Times that Tillerson and Kushner are struggling for control of Middle East policy, and Tillerson is frustrated that he doesn’t have the autonomy Trump promised him. “Rex is a 65-year-old guy who worked his way up from the bottom at Exxon, and he chafes at the idea of taking orders from a 38-year-old political operative,” a former transition aide tells Politico of DeStefasio
    DeeDee Dee…who said working with Trumpet would be easy peezee.

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