Qatar is Leaving OPEC – Who Wins?

Cyril Widdershoven wrote a column describe why 2019 is likely to be a tumultuous year for OPEC. It is worth reading in its entirety, but the central theme of the article is that Iran has been marginalized, that Qatar is leaving not because of its stated new policy of focusing on gas but as an affront to the Saudis, and that KSA is looking to restructure OPEC to become an Arab Gulf vehicle, and to bring Russia on board. The geopolitical realities, Mr. Widdershoven argues, are such that Russia, Asia, and Saudi Arabia, are becoming increasingly close (and he took the meeting between President Putin and KSA’s Crown Prince Mohammed bin Salman at the G20 meeting in Argentina to be a sign of that), whereas the United States, increasingly independent of foreign fossil fuels, is drifting away from its former allies. Mr. Widdershoven’s observations are certainly worth considering, but in focusing with so much zeal on his theory of ascribing new power in the bloc to  Saudi Arabia, he ignores autonomous motivations of Russia, Iran, and Qatar, which likely bear as much influence on the future of OPEC as Saudi Arabia’s realpolitik moves in light of Russia’s willingness to play ball and faux Western outrage over the Khashoggi affair.

Ultimately, Qatar’s withdrawal from OPEC is much more of a factor than this analysis is willing to acknowledge. It certainly does not bode well for President Trump’s vision of a unified Middle East, and does not encourage hope in the success of the proposed “Arab NATO’, a Middle Eastern defense pact which would include both Saudi Arabia and Qatar.  Qatar’s goal in leaving OPEC is more complicated than appears at first glance. Of course, it is a sign of hostility to Saudi Arabia, but behind it is the understanding that Qatar is no lnger dependent on the Kingdom and has other options to shop from. Rather than being isolated and ignored, as the author implies dismissively, Qatar is in demand with the United States, Europe, and even in Africa.  Most recently, it has been financing Turkey’s aggressive policy in courting Sudan away from the Saudis and the Arab Coalition in Yemen, for instance.  Qatar is likewise furthering Turkey’s goals in countering Saudi and Emirati military interests throughout Africa, by forming strong and competitive alliances, and vying for additional military bases.  Furthermore, Qatar shows no evidence of moving away from developing oil interests.

On the contrary, its increased involvement in Africa furthers its geopolitical goals on multiple fronts. For Qatar, Africa opens new possibilities of strengthening its economic power, but also a playing field to counter the Saudis. These goals are not mutually exclusive. Qatar’s divisive interventionism in Libya and Tunisia are just two examples of Qatar’s underhanded development of its own strategic interests apart and independently from the rest of the OPEC members. Libya, for instance, has accused of Turkey, Qatar, and Italy of conspiring to attack  the oil crescent region in the country in order to further foment destabilization.  Turkey benefits from the regional chaos, whereas for Qatar, taking out an economic rival could be a legitimate ambition, as Doha seeks to exert influence throughout the continent. Because Libya is such a wild card maintaining a state of chaos will keep it from falling under the influence of pro-Saudi forces in the continent.

While conspiracies involving Italy may be far-fetched, Qatar’s and Turkey’s joint efforts in the general vicinity have not gone unnoticed. Exploiting the water crisis between Egypt, Sudan, and Eritrea provided the two countries with one theater of interference; Libya is another such opportunity. US, which has been called upon to help stabilize Libya after it has allowed the fall of Muammar Qaddhafi, has been largely unresponsive to the proliferation of Al Qaeda, ISIS, and other terrorist groups on the ground. Qatar sought to fill in the power vacuum, while the tribal Libyan population repeats the pattern of dysfunction likewise evidenced in Afghanistan for many of the same reasons. Where traditional tribal power structures in Afghanistan have been challenged by Islamist forces fueled by Pakistani government, Qatar and Turkey have played the same role in Libya. Qatar has been arming and supplying the Islamist groups which create havoc amidst Libya’s tribal societies, already weakened by internecine feud issues which were kept in check under Qaddhafi’s strongman government.

A report which tied Qatar and the Muslim Brotherhood to the Libyan rebel who supported ISIS went largely unnoticed – and yet, should have been a read flag to the Trump administration, which had warned Doha about supporting terrorists earlier this year.  The last thing the White House needs is an ally hosting a US military base responsible for undermining stability in North Africa, just as the US is getting increasingly entangled in counterterrorism operations in the Sahel. Few realize that Libya’s government (based in the East), had likewise cut ties with Qatar in June 2017, when Saudi Arabia and the rest of the Anti Terrorism Quartet imposed a blackade on Doha.

The Foreign Minister Mohammed al-Deri then accused Qatar of “harboring terrorism”. Various reports showed that Qatar has been acting in opposition to the Saudis, Egypt, and others who have backed the eastern-based government and Khalifa Haftar’s Libyan Nantional Army, and has sent tons of money and arms to Muslim  Brotherhood-backed militants, assorted terrorist organizations, and the Tripoli-based General National Congress.  Little has changed since last year’s reports. Despite repeated warnings and requests from fellow GCC members, Qatar continues to engage in destabilizing and destructive activity, pursuing its own course which runs counter to US national security interests in the region.  Indeed, only recently Libya boycotted a shooting championship in Doha, alleging terrorism support.  Libyan officials accused Qatar of contributing to the economic incentives for continuous warfare in Libya and of using sports to distract from its nefarious activities.

Other voices have joined in the choir accusing Qatar of funding armed militias. They included a Libyan lawyer representing victims of violence who had called on the international community to stop Qatar from funding these groups.  All of this casts shade on the Italian government due to close trade ties between Rome and Doha. It’s also affecting Doha’s relations with the US. According to a recent letter to Secretary Pompeo signed by Senator Ted Cruz and others, Doha is using an Italian proxy carrier in violation of the Open Skies Agreement to gain unauthorized access to US skies. Libya’s accusations against Italy reflect the view that Rome’s willingness to facilitate Qatar’s schemes is seen as a sign of willingness to contribute to Qatar’s funding for other unlawful activity.

This pattern repeats itself in Yemen, where Aden’s Southern Transitional Council has accused Qatar of giving support to Houthis. More than just away of irking Saudi Arabia, if accurate, Qatar is actively aiding and abetting war criminals responsible for torture, and is acting in concert with Iran.  This would not, however, be the first nor the last time Qatar has collaborated with Iran on meeting its geopolitical goals, whatever the cost. Both Doha and Tehran are seen to be behind the recent and supposedly paid protests in Tunisia, which met Mohammed bin Salman during his recent tour of diplomatic outreach to Arab countries. The purpose of this likely astroturf effort? To embarrass and discredit the prince – and to send a signal of disunity and weakness of the Kingdom to Mohammed bin Salman’s Western allies. Based on this pattern of collaboration with Turkey and Iran,, then, Qatar is sending a signal not only of opposing its regional rivals but of having found new counterparts and allies. In other words, Doha is clearly communicating that it is openly siding with Iran.

Doha’s alliance with Iran rests in other factors, as well. For instance, the two countries share a gas field. Qatar’s leave of OPEC sends a message of growing cooperation over extraction. In the past, Tehran and Doha have had some disputes because Doha insisted on playing a greater role in the extraction process, because Iranian contractors were seen as slow, sloppy, and at risk of damaging the fields. It is also obvious from its involvement in Libya that Qatar is not actually abandoning oil, but if it is to move away to Iran from the Gulf States and gain its greater support for its newly independent path to influence, it has to show that it’s willing to take the tough steps of distinguishing itself from the rest of the region and to actively choose Tehran. The OilPrice article fails to make note of it, but Qatar’s move also brings it closer to Russia, its counterpart in the gas cartel, with which Qatar already shares substantial economic interests.  Qatar’s support and assistance facilitates Russia’s ambitions and cements its foothold in the Middle East.

With Doha’s open support, Russia comes even closer to becoming a serious power broker in the region, challenging traditional US alliances with the Gulf States. It has already increasingly wedged itself between the US and Cairo, coming through on advantageous defense contracts, and furthering cooperation through frequent and friendly communications, in opposition to US concern over human rights and democratic norms.  Military, political, and economic opportunities for cooperation are being exploited to their full extent; Cairo and Moscow are likewise bonding over mutual interest in nuclear energy.

IF Washington continues taking its relationship with Egypt for granted, it may soon find itself surprised when its adversary has gotten dangerously close to this dependably ally and has reignited at least some of the concerning influence for which Moscow was known during the Cold War.  Putin is well aware that terminating Cairo’s relationship with Washington entirely is highly unlikely, but eroding and challenging it and US goals in North African in various ways is entirely possible.  Rather than being a passive recipient of Saudi interest in expanding arms trade and oil related opportunities, given that US is no longer interested in purchasing oil from the fossil fuel-dependent Riyadh, Moscow is a very active player in her own right, and its relationship with Doha presents a further challenge to the other parties it wishes to woo. Rather than moving away from Moscow because of her closeness to Qatar, Saudi Arabia and UAE, may, on the contrary be tempted to develop stronger relationship with Moscow to keep her in check.

THe furthering of these relationships also sends a message to the Trump administration, which has worked to maintain an equilibrium with all of the Gulf State. At some point, the tiny Qatar, however, may look to manipulate its much bigger counterpart into choosing sides, much like satellite states managed to play the Cold War behemoths, the Soviet Union and the United States and Britain, against one another, in some cases receiving significant concessions from both.  Asian countries such as Cambodia, Malaysia, Sri Lanka, and until recently, Pakistan, have done much the same, exploiting the feud between the United States and China. The ongoing Al Jazeera campaign against the Saudis, exploiting the fallout from the Khashoggi affair, and the hapless state of the Saudi lobbying and PR, is just a first sign illustrating Doha’s intentions of “turning” the White House against its ally.

For now, it does not seem to be working, as President Trump reiterates that the Saudis are a very good allow. However, if Europe, major companies, and Congress all rebel, and the President faces insurmountable pressure from KSA’s opponents, without any active measures from the Saudis towards self defense and preserving and furthering the relationship with the United States (for instance, if it grows too close to Russia and China), even the administration may reassess its commitment to this relationship. For now, the benefits outweigh the costs, but Doha’s maneuvering and KSA’s passivity may prove to be the undoing of the status quo.  Some signs point to the administration’s willingness to show unwarranted leniency to Qatar. For instance, it is refusing to enforce the NDAA provision for investigation of Al Jazeera’s political activity, which would arguably mandate its registration as a foreign agent under FARA, removing its press credentials. This points to Doha’s increasingly successful wielding of political influence in the United States – and given the sudden warmth between the Emir and President Trump, the relationship that literally blossomed since his visit to the US in April is only likely to grow.  Likely, Qatar would not have withdrawn from OPEC without tacit approval from the White House, which has gone out of its way to preserve the GCC and to “fix” the relationship between Qatar and the Anti Terrorism Quartet.

How to reconcile these seemingly contradictory positions by the administration? Qatar is likely playing off President Trump’s clear and stated desire to weaken OPEC’s monopolistic hold on oil prices, which by definition means weakening the cartel itself. The reason is benign enough. President Trump wants to see US retain its newly gained position as the number one producer of oil and gas on the world market, boosting its standing and making it even less dependent on foreign sources of fossil fuels. Given that motivation, the administration likely believes that Qatar’s move will give the US greater leverage in negotiation oil prices with OPEC.  In reality, however, Qatar is playing a long term influence game, creating increasing divisions in the region and playing on the vulnerabilities of various participants. Doha is positioning itself to play all sides with more flexibility.  Because OPEC is a cartel, many in the West, on both sides of the aisle, will gladly see it collapse for different reasons.  These critics and political interests believe they will then be in a better position to negotiate independently with individual countries. Breaking up monopolies in favor of fair competition and free trade is a classical liberal tradition that supports American interests in general.

However, in the instant case, there is little doubt that the forthcoming arrangements will have little to do with free market, but rather with alternative manipulation of market forces by different cliques and arrangements, arguable even more malign and corrupt than OPEC.  Such an outcome would actually undermine the ability of US allies in the Gulf to wield influence against the adversaries, since the complex web of multipolar relationships is not currently creating a path towards individual interests, but rather alliances from hell.  Rather than being isolated or subsumed by Saudi Arabia, as the author of the OilPrice article suggests, Iran and Russia may very well be looking towards creating their own alternative to OPEC or else, manipulating OPEC towards their ends. Weakening the Saudis is in both of their interests, though Russia is much more subtle about it and will likely continue to pretend to be a friend in need to the inexperienced young Saudi government and its overwhelmed foreign policy team, scrambling to mitigate damages from the political and economic series of fiascos which took place over the course of this past year.  Tensions between the White House and Riyadh over oil prices play right into that vision.

Iran is in a more direct opposition to the Anti Terrorism Quartet than Russia.  Russia’s and Iran’s regional goals also differ, despite much cooperation on many fronts. However, if KSA, UAE, and Bahrain prove ultimately indifferent to its overtures, Russia will likely move closer to Iran and work to form a separate, competing bloc. For now, however, Moscow shows interest in manipulating its counterparts and use the increasingly chaotic situation and the US lack of strategy in handling these relationships to score points with each player. Already, Moscow has succeeded in drawing closer to them than it ever has historically, given that all of these countries have been historic US allies opposing Communism.

Now, ironically, Riyadh has increased its share of the market in oil trade with Communist China. And Russia  and China both continue oil trade with Iran, Saudi Arabia’s greatest regional threat. However, until KSA achieves independence from oil, a Vision 2030 goal that has been hindered by various challenges and setbacks, it has little choice but continue trading with countries, which are willing to base their relationships with Saudi Arabia on what ultimately fuels its economy. If the United States wants to keep Riyadh from growing closer to Moscow and Beijing, it should assist with reforms and provide advice and guidance in achieving Vision 2030 goals faster. It should also grow its relationship with Riyadh, despite the PR naysayers, around more tangible long term interests such as scientific research and innovation. As the situation stand right now, however, Russia wins from Qatar’s separation from OPEC and the GCC contingent,  and also from the Khashoggi related drama.

However, if the Gulf States believe that Russia is a functional substitute for the US because Putin appears to stay more loyal to his strategic allies, and because Moscow has no interest in criticizing human rights, they should beware. Nowhere that Russia has ever gotten involved in has actually benefited from its presence and intervention.  Moscow is ultimately self interest and has no care nor particular concern in the well being of Gulf States, in their reforms, or in a better future for the Middle East. Putin regime’s mentality is ultimately colonialist.  It cannot invest money in the reconstruction in Syria, or in solving Jordan’s economic woes, or providing vital humanitarian and educational assistance to Egypt; it can only provide vocal political support at opportune moments, creating the impression of being a dependable friend – then, it moves to seize advantage and drives itself as a wedge between others, ruining all legitimate efforts at cultivating long term relationships, playing spoiler. Russia is ultimately a divisive and destructive force, always seeking to wield influence, not as a partner or as a catalyst of positive changes, but at someone else’s expense. Putin’s vision of foreign policy is a zero sum game, familiar to any Cold Warrior. For Russia to prosper, some real or imaginary adversary must succumb and be destroyed. Closer relationship with Putin will ultimately damage the Gulf States’ relationship with the US, create additional internal divisions over various matters, and form dangerous dependencies on a force that is not ultimately dependable.

While Qatar is looking to secure exit doors with Iran and Russia, it continues to try to play all sides to its advantage, but also against each other. For Qatar, the vision of power is a constant chaos of different moving parts, always in motion. Stability is not advantageous to Doha, because once the dust settles, few will want to be lorded over by a tiny country that can only be independent by interfering with the successes of others.  If the Trump presidency does not last the 2020 election, Qatar and Turkey are prepared to pivot their strategy to the next occupant; they have no ideology nor loyalty except to manipulate others such that their agenda is promoted by the White House.  Their ideal outcome is a return to the Obama doctrine and vision of the Middle East, which would include a regional coordination (never mind that it will ultimately clash) between Turkey, Iran, and a president supportive of both. And such a vision ultimately depends on undermining the Saudis and others, and coopting everyone else.

Thus, the Qatar exit from OPEC is not ultimately a “win” for the United States, but rather, the beginning of a dark and tumultuous time of Middle Eastern intrigue and the return to the Great Game.