• The unprecedented decision by seven countries, led by Saudi Arabia, the United Arab Emirates (UAE) and Egypt, to sever diplomatic ties with Qatar, closing their land, sea, and airspace in the process, is a significant escalation that will likely force the small, but influential, gulf nation into diplomatic retreat.
  • This step is part of a concerted effort by the newly energized Saudi-led alliance against both Iranian expansionism and violent extremism to bring Qatar, an unruly member of the Gulf Cooperation Council (GCC), into line. Some will view the diplomatic spat as a sign of inter- Arab Gulf weakness, but an alternative assessment would argue that it indicates determination to take on destabilizing behavior.
  • President Donald Trump’s recent visit to Saudi Arabia and his public call for zero tolerance against those supporting radical extremists probably incentivized action against Qatari policies, but the underlying issues have long been a source of tension. Since the Emir of Qatar was deposed by his son in 1995, the small but rich nation of about three hundred thousand citizens has supported opposing sides of various conflicts and interfered in the internal affairs of its neighbors in order to play an outsized diplomatic role.
  • Libyan intelligence recordings seized after the toppling of Qaddafi in 2011 pointed to Qatari meddling in Saudi Arabia’s internal affairs by funding Saudi opposition figures. Bahrain, Saudi Arabia, Egypt, and the UAE believe that similar destabilizing activities continue in each of their nations.
  • The most immediate fallout from the ongoing row will be increased volatility in global energy markets and regional stock exchanges. Oil futures have already shot up 1.6% and the Qatari stock exchange is down over 7%. Food shortages and inflation can be expected to roil Qatar, a small peninsula that imports over 40 percent of its food needs through its only land border with Saudi Arabia. Although its economic lifeline, the liquefied natural gas (LNG) terminal from which it exports its gas to the world, is unlikely to be directly impacted, a prolonged crisis will negatively impact tourism and commercial traffic, including the national airline, Qatar Airways, and may affect preparations for the 2020 world soccer championship.
  • Should Qatar fail to reverse course on its alleged support for radical groups like Al Qaeda and violent elements of the Muslim Brotherhood, and if it continues to defy other Gulf Cooperation Council countries by reportedly backing pro-Iranian activities in Bahrain and Saudi Arabia, further escalation, in the form of additional economic and financial measures against Doha, could follow. A prolonged conflict could also heighten instability in Libya, Syria and Egypt – countries where Qatar is known to fund armed groups.
  • Operations of US Central Command (CENTCOM) at Al Udaid Airforce Base in Qatar are unlikely to be affected. Nor is Turkey, which has partnered with Qatar in support of the Muslim Brotherhood throughout the Middle East, likely to risk diplomatic confrontation with key Arab countries to salvage its troubled ally. Instead, Turkish mediation could help Qatar in its anticipated diplomatic retreat while attempting to save face.