[130617.EN.BIZ] Gulf States Step Up Saudi-led Qatar Blockade, But Oman Offers Relief

TENSIONS mount among the Gulf Cooperation Council (GCC) member states blockading Qatar from all commerce for its defiant independent attitude.

Maersk Line says it is working on bypassing the ban using alternative routes, but admits it can no longer deliver cargo using feeders via the United Arab Emirates.

But Maersk also announced that will have feeders running from Salalah port in Oman every 10 days from June 19 arriving at in Doha June 25, but it will not accept bookings for Qatar until further notice.

US Secretary of State Rex Tillerson, former CEO of oil giant Exxon Mobil, has offered to mediate between Qatar and the angry Saudi-led coalition.

But socially conservative Arabs see such an act like neighbour interfering with the punishment of a spoiled child. The Saudis have even announced fines of US$2,666 for anyone caught watching Qatar's Al Jazeera TV channel, which is as much a part of the dispute as any other factor.

Qatar, with the world's highest annual per capita income - US$74,667 a year - has a population of 2.6 million in 2016, a 62 per cent increase from 2010. What's more its citizens own more of London than the Queen, says the Daily Telegraph.

While many Americans see the reason for the fuss is Qatar's support for terrorism, others say it has more to do with the country's profound liberalism and its defiant independent air.

True, Qatar welcomes Hezbollah terrorist represenatives, and has become a place of refuge and muster for Arab Spring activists, whose revolutions backfired in North Africa. But these acts have more to do with radical chic than with any intent to foment serious revolution on Qatar's part.

After all, it is also the home of Al Jazeera, the world-beating 24/7 news channel, whose fame has eclipsed of Arabia itself, parading western styled women as TV presenters in ways deeply offence to social conservatives in Saudi Arabia, with which the Qatar peninsula shares its only land border.

Another factor to keep in mind - perhaps Mr Tillerson's big stick - is that 10,000 US troops are stationed in Qatar, according to Forbes, which contributes to the country's air of independence.

German shipping giant Hapag-Lloyd with its merger of United Arab Shipping Company (UASC) is now embroiled with Libya, Mauritius, the Maldives and Yemen piling on, but significantly, not Oman or Kuwait, where 15,000 US troops are stationed.

Hapag-Lloyd and Gulf-based UASC meant that UASC's two shareholders Qatar Holding and Saudi's Public Investment Fund (PIF) took 14.4 per cent and 10.1 per cent stakes in the combined company.

"It is currently unclear how the Hapag-Lloyd shareholders will resolve the complications arising from the diplomatic spat involving Qatar and its erstwhile Middle Eastern partners in UASC," Alphaliner said. Hapag-Lloyd declined comment.

Abu Dhabi's oil ports authority banned all vessels coming from or going to Qatar from using its facilities, a move in line with most other terminals in the United Arab Emirates.

Saudi ports are applying restrictions, with some allowing ships to sail to Qatar, and others preventing vessels from leaving for the neighbouring state, according to a shipping agent with knowledge of situation.

King Abdullah Port on the Red Sea side banned all vessels sailing to or from Qatar from berthing at its facilities, the shipping agent told Bloomberg.

In some ways, Mr Tillerson, as a former oil man with many friends in the region, is an ideal mediator, except for the hostility aroused by US President Donald Trump's recent friendly visit - far too friendly for Arab social conservatives.

Because of climate change regulations sprouting everywhere, Qatar stands to make even more money by its hold on liquified natural gas (LNG) mandated by western regulators. It is the world's second biggest producer after Russia.

"A major effect of the cut in diplomatic relationships with Qatar is likely to be felt in the shipping sector," FGE, a London-based consultant, said in a research note.

Ships going to and from Qatar will need to find a new refueling port, and LNG shippers will have to adjust schedules and routes, it said. "This will increase costs, and in the near term, could even lead to delays in LNG deliveries."

Muscat airport has seen a spike in air traffic this week as a blockade on Qatar has enabled neutral Oman to bridge the divide between Doha and other Gulf states.

Oman Air has laid on special flights to help stranded Qataris reach home as other Gulf countries continue their blockade on Qatar by land, sea and air.

Qatar Airways was forced to cancel flights to Saudi Arabia, the UAE, Bahrain and Egypt after the Riyadh-led embargo on Doha was announced this week.

It has put Oman - which has stayed out of the spat - to use its unique position in the GCC to bridge the gap between Qatar and other Gulf countries.

Oman Air has chartered flights to pick up the Qataris stranded in these countries due to the ban on Qatar Airways by Saudi Arabia, Bahrain and the UAE.

This includes three flights on Tuesday to the Saudi Arabia's eastern city Jeddah, Muscat Daily reported.

"Oman Air is upgrading its flights to Doha to bigger aircraft, with more capacity till 14 June ," a spokesperson from the sultanate's national carrier told Muscat Daily.

Oman Air has also provided three extra charter flights for Qatar Airways on the Muscat-Jeddah-Muscat sector.

The long-standing tensions between Qatar and several Gulf states erupted on June 5, after Saudi Arabia, Bahrain and the UAE cut diplomatic dies with Doha.

Qatar, right or wrong has been an irritant for its socially conservative neighbours for its liberalism representing the Arab world in ways its leaders do not wish it to be represented, then annoying the Americans by allowing Iran to explore for natural gas and welcoming Hezbollah terrorist representatives.

And now it is spending US$500 million a week to bring the 2022 World Cup, the world's biggest sporting event to the Arab world for the first time, though the bid as been mired in controversy since Qatar won it seven years ago.

Source : HKSG.