No plans to change posture in Qatar amid diplomatic crisis — United States military

Elias Hubbard
June 6, 2017

It's the biggest political crisis to hit the Middle East in years. They've ordered Qatari diplomats to leave in 48 hours and other Qatari nationals to pack up in two weeks.

While losing access to Saudi airspace will force Qatar Airways into the costly maneuver of rerouting its Africa-bound flights, losing access to Bahrainian airspace could be catastrophic because it nearly completely encircles Qatar. Qatar has denied the allegations. "Qatar started increasing staff allowances, and UAE is cutting fuel prices next month, while Saudi Arabia applies a selective tax and raises fuel prices", he tweeted. Abu Dhabi-based Etihad Airways has said it will suspend all flights to-and-from Doha from June 5 till further notice.

"Losing Saudi, Bahrain and UAE airspace would effectively ground Qatar Airways", CAPA - Center for Aviation wrote in a report.

Kuwait appears to be trying to play a mediating role between Qatar and Saudi Arabia, the United Arab Emirates and Bahrain. The Saudi-Egyptian move coincided with two important developments in the region: 1- It took place right after a major $110 billion weapons deal between the USA and Saudi Arabia.

This rift with Qatar "just emphasizes the lack of unity", Ibish said.

As part of the measures, Saudi Arabia said it would pull Qatari support from the Yemen war. Qatar shares a massive offshore gas field with Iran.

He tells NPR it is not entirely clear why longstanding issues have boiled over now, but notes, "We can't ignore the fact that Donald Trump was in the region not too long ago, which really empowered Saudi Arabia and the UAE". Turkish officials have offered to mediate, which is promising given their good relations with both Qatar and other Gulf countries. It is offering customers affected by the decision a refund on unused tickets.

What about the United States.

He was referring to the al-Udeid Air Base, the forward headquarters for U.S. Central Command, used extensively by U.S. warplanes in the region.

US gasoline futures led the energy complex lower, falling about 2.5 percent to settle at $1.5381 a gallon, on technical selling, brokers said.

Saudi Arabia and its Gulf allies may have felt emboldened by Trump's visit, which saw the new president clearly align USA interests with Riyadh and lash out at Iran.

And Qatar's longtime links to Iran also worry Saudi leaders. Mattis and Secretary of State Rex Tillerson met with their Qatari counterparts in April and May. Kerala chief minister Pinarayi Vijayan said in a Facebook post that 300,000 out of the almost 650,000 Indians in Qatar were from Kerala.

How will it affect the rest of the world?

The northern route out of the Gulf will likely result in payload restrictions or longer flight times on many routes.

However, Greg McKenna, chief market strategist at CFD and FX provider AxiTrader, says that what happens next will be key.

With LNG markets in bearish mood and demand weak, the UAE could cope with Qatar suspending its two to three monthly LNG deliveries by calling on worldwide markets, but Dolphin piped flows are too large to fully replace. "(It's) something to watch".

The severing of ties comes days after these countries were angered by comments attributed to Qatar's ruler in which he praised Iran.

Still, Standard Chartered analysts said their market balance projections indicated a 1.4 million barrels a day global supply deficit in the second half of the year, even allowing for a rapid increase in USA output.

Analysts said that one of their demands could be the closure of television network Al Jazeera.

Qatar has hosted successive rounds of peace talks between the Arab-dominated Khartoum government and Sudan's ethnic minority rebels who took up arms in 2003 against President Omar al-Bashir's administration in Darfur.

The network went on to launch English-language programming.

Other reports by Click Lancashire

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