Saudi Arabia’s escalating foreign Policy: the Qatar crisis is just the beginning

Saudi Arabia’s escalating foreign Policy: the Qatar crisis is just the beginning

Saudi Arabia is losing the shadow war against Iran in the Middle East.  Despite the centrality of foreign policy success to mitigate Saudi’s domestic problems, it is losing in Syria, Lebanon, and Yemen.  The Qatar crisis was a reaction to these failures, but will likely drive Saudi to greater extremes.

Since the oil price fell in 2014, Saudi Arabia has been grappling with systematic political and economic problems whilst a competition with Iran for regional hegemony has escalated.  Domestic problems and a coming succession to the kingdom’s throne put an added onus on foreign policy success, yet Saudi’s foreign policy is floundering.  The Qatar diplomatic crisis is a bold move that indicates Saudi’s failures are driving a stronger, riskier foreign policy.  The almost certain failure of the diplomatic blockade is likely to drive Saudi to greater extremes, with a corresponding destabilising effect in the Middle East.

Lebanon is Lost

The election of Michael Aoun as president in November 2016, after a 29-month political stalemate, is seen as a victory for Iran in the Sunni-Shia power-struggle.  Aoun is the leader of the largest Lebanese Christian political party and a staunch ally of Iranian-backed Lebanese Shia movement Hezbollah.  The election of Aoun as president over Saad Haari, leader of Lebanon’s main Sunni bloc, indicates Saudi’s waning influence in Lebanon as its resource are stretched thin in regional competition.  Riyadh had informed its backers in Lebanon, via second-tier officials, that it was of secondary concern and that Saudi would stop sending French military equipment to the army.

Setbacks in Syria

Saudi is also losing influence in Syria.  With the fall of Aleppo and Trump’s U-turn on the need for Bashar al-Assad to leave, the position of the Sunni groups that Saudi wishes to succeed has been weakened.  The support Assad has received from Iran, Russia, and Hezbollah has proved decisive in the battlefield as the US prioritises defeating IS over a regime change.  In February 2017, Saudi’s Foreign Minister stated that Saudi is “ready to send ground troops to Syria” to help the rebels retain ground, which would mark a severe escalation in the war.

Yemen is Saudi’s ‘Vietnam’

Yemen’s geographic and political terrain have proven fatal for Saudi’s intervention leaving it in a quagmire.  It expected a quick victory but it has achieved none of its objectives thus far.  The Houthis, a Zaidi Shia organization, are still at large, and President Abd Raboo Mansur Hadi is still in exile with his government in Saudi Arabia.  Saudi’s image has been damaged by the Yemeni conflict, Iran and its allies have made sure to proclaim its short comings through the Middle East.  The war has also burdened Saudi’s economy; as of December 2016, it was costing an estimated $675 million a month, which forced Saudi to sell of $1.2 billion of its $9.2 billion holdings in European equities to fund the campaign.

Qatar won’t Quit

In simplistic terms, the Qatar crisis boils down to Saudi’s grip on the gulf and Saudi-Iranian regional competition.  The formation of this crisis over the last 22 years also explains why Saudi is unlikely to achieve success.  Qatar used to be in the Saudi fold: a “kind of Saudi vassal state” in the opinion of Jim Krane, an energy research fellow at Rice’s University Barker Institute in Houston, Texas.  However, the year 1995 was a turning point. Sheikh Tamin, the father of the current emir, overthrew his pro-Saudi father and Qatar made its first shipment of Liquid Natural Gas (LNG) from the offshore North Field: the largest gas reservoir in the world.  Qatar was able to use the agency created by its gas wealth to assert its unrestricted autonomy. This has allowed it to support whom it chooses, notably the Muslim brotherhood on occasions, and form ties with powers such as Iran, the U.S., and Russia.  Qatar now produces 30% of global LNG and has a per capita income of $130,000.

Qatar’s reliance on gas instead of oil has left it free from the Saudi domination it would have been exposed to as an oil-reliant member of OPEC.  It has also been necessary that Qatar maintain a working relationship with Iran to protect its economic source of autonomy.  Iran could hinder Qatar’s access to the North Field.  Qatar self-imposed a two-year freeze in gas exploration and output in 2005, supposedly to study how the gas field was responding to exploitation.  Given the suspension was lifted 10 years late, in April 2017, when Iran caught up with Qatar’s gas production, it was clear sign of goodwill to Iran.  Further, increased exploitation will likely require collaboration with Iran.  Concerned about their loss of control in the Middle East, irritated by the growing Qatari-Iranian working relationship and Qatar’s autonomy, and emboldened by Trump’s visit and Qatar’s public rejection of Trump’s call to isolate Iran, Saudi took the opportunity to re-assert control over Qatar after previous failed attempts between 2002 and 2008.  This crisis will very likely become another failure to add to the list of Saudi foreign policy escapades.  Gas production amounts to 60% of Qatari export revenue, Qatar’s relationship with Iran is economically fundamental and ensures its sovereignty.  Unless Saudi can suggest a way to secure Qatar’s gas without Iran, Qatar won’t back down.

This setback is likely to drive Saudi’s foreign policy to greater extremes.  This could manifest in a greater presence in Syria, as Saudi’s Foreign Minister voiced in February, or bolder actions against Iran, Hezbollah, or Qatar.  Whatever it may be, a continuation of the escalation of Saudi’s Foreign Policy will be regionally and domestically destabilising.

About Author

Ben Abbs

Ben Abbs works for Bacchus Capital Advisers, a specialist investment and merchant bank focused on natural resources. Bacchus Capital has particular expertise in uranium and the nuclear sector, including the creation and listing of Yellow Cake, a unique uranium vehicle, on the London Stock Exchange in 2018. Prior to joining Bacchus Capital, Ben worked in several roles across the UK Government, including economic crisis management in COBR at the Cabinet Office, economic intervention at UK Government Investments, and investment and trade policy as Private Secretary to the Director-General for Investment at the Department of International Trade. He has also worked for the European Centre for Energy and Resource Security and written for several political media organisations.