Tillerson to Tour Gulf Capitals as U.S. Seeks to End Spat

  • U.S. sees no sign of armed conflict in crisis, official says
  • Saudi-led alliance severed links with Qatar last month

CS' Iqbal Sees Qatar Resolution Long Time Coming

Secretary of State Rex Tillerson is in Kuwait, Qatar and Saudi Arabia this week to meet with Gulf leaders as the U.S. seeks to help end a standoff that pits key U.S. allies against one another.

Tillerson will shuttle between Persian Gulf capitals from Monday to Thursday, U.S. State Department spokesman R.C. Hammond said. The diplomacy is part of a bid by the top U.S. diplomat to bridge the differences between Qatar and the four-nation Saudi bloc that has isolated it, Hammond said.  

“We’ve had one round of exchanges and dialogue and didn’t advance the ball," Hammond said. “We will work with Kuwait and see if we can hash out a different strategy."

Saudi Arabia, the United Arab Emirates, Bahrain and Egypt severed diplomatic and transport links with Qatar, the world’s biggest exporter of liquefied natural gas, on June 5. The alliance accuses Qatar of destabilizing the region by supporting proxies of Shiite-dominant Iran as well as Sunni extremists, charges the sheikdom has denied.

The Gulf flare-up has put the U.S. in a difficult position. It’s allied with nations on both sides of the dispute. Qatar hosts the regional headquarters for the U.S. Central Command, which includes a state-of-the-art air base the Pentagon depends on to target Islamic State. Saudi Arabia has strong counter-terrorism ties with the U.S. and is the top buyer of American weapons.

Ahead of his visit, an American defense official said the U.S. has seen no indication that the crisis will lead to an armed conflict between the nations involved. The official asked not to be identified given the sensitivity of the subject.

Ease Tensions

State Department officials have said they are skeptical that the crisis will be resolved immediately, but are looking for ways to ease tensions between the countries. While the U.S. has deferred to Kuwait as the main mediator, Tillerson may use the relationships he forged with the Gulf oil producers when he was chief executive of Exxon Mobil Corp. to bring them closer together. He met with Kuwait’s emir and U.K. National Security Adviser Mark Sedwill on Monday.

The standoff shows no signs of ending. Qatar rejected 13 demands by the Saudi-led alliance to end the crisis, a move the allies say demonstrates its links to terrorist groups. The Saudi-led grouping said the demands were “null and void” and pledged new political, economic and legal measures against the Gulf nation.

The bloc demanded that Qatar scale back ties with Iran, the Shiite Muslim powerhouse that’s the main rival to Saudi Arabia in the region, sever relations with the Muslim Brotherhood and shut the Al Jazeera media network that’s riled governments throughout the Middle East.

“They are done, they are not worth revisiting as a package, but individually there are things in there that could work,” Hammond told reporters in Istanbul, where Tillerson traveled after visiting Ukraine and attending the G-20 summit in Hamburg last week. 

Enough Money

Qatar, with the largest per capita income in the world, has so far been able to weather the negative impact on its economy, turning to Iran and Turkey for food imports after the Gulf allies closed their borders. A wave of local stock buying has countered the selling of Qatari stocks by institutional investors from the six-nation Gulf Cooperation Council. Local money managers and institutions purchased $322 million in stocks, against $240 million of outflows from GCC institutions since the conflict dispute started on June 5.

“We have enough cash to preserve any -- any kind of shock,” Qatari central bank Governor Sheikh Abdullah bin Saoud Al Thani said in remarks published by CNBC on its website. “So we don’t believe that there is anything to worry about at this moment. What I can say is that our environment is proof to anybody that we are first of all solid, strong and resilient against any kind of shocks.”

— With assistance by Fiona MacDonald, Filipe Pacheco, and Glen Carey

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