Takeaway: The Gulf crisis with Qatar is getting worse each day. But we expect Qatar to compromise to bring a resolution.

We hosted a flash conference call Tuesday on the Qatar-Saudi standoff with Marcelle Wahba, former US Ambassador to the UAE and current President of the Arab Gulf States Institute of Washington. The following note contains some highlights and excerpts from the flash call but here is the replay to hear the full call at your convenience.

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Call Timeline

11:30 Do the Trump tweets de-escalate the situation or make matters worse?

13:55 Is Iran the main source of friction in Qatar-GCC relations?

16:15 Oman also has close ties to Iran. Will Oman also get pressured by the Saudis?

17:50 Does the US CENTCOM airbase in Qatar complicate the crisis?

20:30 What is the impact to oil markets and OPEC unity especially with the current production cut agreement?

22:25 What is the impact on Qatar LNG and will the Dolphin natural gas pipeline to UAE be used as leverage?

25:50 There are whispers of a coup or leadership change in Qatar. What is the probability of a leadership change and is there any potential for Saudi military action to bring about a change?

28:15 Is Al Jazeera a source of tension and catalyst for the current crisis?

On Monday, Saudi Arabia was joined by the UAE, Bahrain and Egypt in cutting off diplomatic and economic ties to Qatar over claims of Qatari support for terrorism activities.  The development raises the geopolitical risk in the region on the heels of the US-Arab summit in Riyadh attended by President Trump and also poses potential risks for energy markets.

President Trump weighed personally on Tuesday with a tweet on the dispute highlighting his trip and seemingly siding with Saudi Arabia. 

REPLAY & RECAP: Qatar-Saudi Standoff Flash Conference Call - Trump Qatar tweet

One of the major takeaways from the call is that Ambassador Wahba believes the actions of the Saudis and Emiratis are so severe that Qatar will have little choice but to compromise to end the crisis. She also believes that a leadership change in Qatar is not only possible but probable as a face-saving measure.

“Political differences between Qatar and its neighbors, primarily Saudi Arabia and the UAE, are longstanding and predate the Arab Spring of 2011,” Ambassador Wahba explained. “This round is different and the message is unmistakable: change your policy or else. The actions announced this week effectively restrict Qatar’s lifelines via air, land and sea.”

“Even prior to the President’s tweets, it was clear to me that the Qataris would have to blink first. The usual mediation of the past will not work this time. The Emiratis and the Saudis clearly want Qatar to stop undermining their policies on Iran and on radical Islamist movements or face the consequences. Now with the US position clearly supporting the Saudi-Emirati demands, they really have no choice,” Ambassador Wahba said.

ON TRUMP’S PRO-SAUDI TWEETS

“The President’s tweets basically reiterate the position he took in Saudi Arabia: he sees Iran and radical Islam as big issues. I think it definitely leverages the position of the Saudis and Emiratis because it is telling the Qataris very clearly that the US is not unhappy with the turn of events and that they will have to change their policies.”

ON IRAN AND QATAR TIES

“Perceived support of Iranian influence in the region by the Qataris is a big issue but the larger issue is really the one focused on the radical Islamist movements and the public platform that the Qataris provide these groups and personalities. So that piece of the conflict is more important than the Qatari relationship with Iran because the Iranians and Qataris obviously have a vested issue in a level of cooperation given that they share a gas field. What they (the Saudis and Emiratis) don’t accept from Qatar is the active undermining and support they give to groups that are supported by Iran, like Hamas, like Hezbollah, like the many well-known Islamic figures that appear and voice their positions on their (Qatari) media. Iran is an issue but I think it is the secondary issue.”

ON CRISIS IMPACT ON OPEC UNITY

“If you are sitting in Doha, your choices are so limited and the decisions you face are so difficult that the Qataris will do as little as possible to inflame the situation. So I think every decision they make will be from that perspective: how can we keep this from getting worse than it is today. The general sentiment is that Qatar with its very low production would have not have any reason or it is not in their interests to change the current OPEC agreement and that’s really not their top concern. There are definitely concerns about transport and shipping lanes. This can be for shipping companies instead of actual production: what is moving in and out of the gulf and ports of call issues. It’s not necessarily about production or OPEC or breaking production agreements or Qatari products but accessibility.”

ON DOLPHIN PIPELINE FLOW TO UAE

“It would be a very serious decision to use that as leverage against the Emiratis and would make them look bad with a number of their customers as an unreliable source. I don’t think they need that right now as the litigation and arbitration issues would be enormous. But at the same time, this is a piece of leverage that they hold and if they are backed into a corner who knows who long this would last and how extreme it would be. But my expectation would be that it will be resolved before it gets to that point.”

ON QATAR LEADERSHIP CHANGE OR SAUDI MILITARY ACTION

“It (Qatari leadership change) is the big elephant in the room. There’s no doubt in my mind that it is a possibility. I don’t think we should rule it out. It would be one way it is resolved. The Al Thani (ruling) family may come together and decide that one way to affect a change is to select another member of the family and save face by doing that and abide more closely with the Saudi-led policies in the region. I don’t think it will come to a military action. I think the actions taken by the Saudis and Emiratis are so severe that there’s really no wiggle room for Qatar here. Given where the President has added his voice to basically side with the Saudis – one way or another the Qataris are going to have to compromise. I think it’s not very likely that we have a military confrontation but a change in power (in Qatar) is possible and probable actually.”

ON AL JAZEERA AS A SOURCE OF TENSION

“Al Jazeera Arabic has a very powerful voice in the region because in addition to espousing these unpleasant and unsavory characters and giving them a lot of air time, they also have some very popular programs because they do push the envelope and they do deal with subjects and topics that are not usually dealt with on other stations. So for a lot of people in the Arab world, Al Jazeera was really a pioneer in opening up the media world.  But at the same time, it carries that very strong and ongoing message that gives a lot of strength to the radical Islamist movement whether Hamas in the Palestinian front or the Muslim Brotherhood. Al Jazeera is a very big factor and a big thorn in the sides of these countries.”