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03/17/2022

The Gulf position on the Ukrainian crisis: One of the harbingers of a multipolar world

The Gulf position on the Ukrainian crisis: One of the harbingers of a multipolar world

Contrary to what many believe, the Gulf states are probably the biggest loser of the war in Ukraine. Some observers believe that the sanctions imposed by the West on Russian oil and gases, which cause an energy crisis and a dramatic rise in hydrocarbon prices, could benefit the Gulf states.

Sanctions on Russia, the world’s second-largest oil producer and the country delivering 40% of Europe’s natural gas imports, are understood to have devastating consequences for the world economy.

In the face of this crisis, attention was drawn to the Gulf States, among others, to balance missing global supplies. There were expectations that these countries would exploit the crisis to their advantage, hoping to become the major winners in this war.

Differing positions

However, Saudi Arabia has rejected calls to increase its oil production and has maintained that it is committed to a five-year OPEC + production agreement that included Russia. US media has reacted with accusations that the country was colluding with Moscow.

The Saudi refusal this time seemed incomprehensible. In 2018, Riyadh had responded positively to the call of US President Donald Trump to increase oil production to enhance market stability and to reduce production later.

Some speculated that the Saudis might be asking for a bargain to help stabilize oil markets this time around. They may be demanding the lifting of US restrictions on some types of weapons for the kingdom, or even political concessions from Washington in some issues that are of concern for Riyadh.

On the other hand, Doha underlined the practical difficulties in balancing the shortage of Russian gas by Qatari production. Qatari Energy Minister Saad Al – Kaabi explicitly said that neither Qatar nor any other country has the capacity to replace the entire supply of Russian gas to Europe, given that Moscow is responsible for about half of what the continent needs.

According to specialists, the Qatari storage units are currently tied to long-term contracts with Asian buyers. According to Al-Kaabi, up to 15% can be transferred to Europe.

Although this will not be enough to fill the gap created by the Russian supply shortage, it will be a powerful card that Doha can use to secure Western support and influence in the region.

The reluctant Saudi position and the realistic Qatari stance are contrasted with an Iranian position eager to exploit the crisis.

Iran, which is in the final stages of fierce negotiations with the United States to return to the nuclear agreement JCPOA, wants the ability to sell its oil without hindrances and return to the level of 2.5 million barrels per day it was exporting before the Trump sanctions.

According to observers, the need for more oil in the market and a guaranteed supply line provide Tehran with great negotiating power as work is underway on the final details of a new nuclear agreement.

Challenges and gains

However, the previously described perception neglects several aspects of the crisis. Even though Gulf countries might achieve financial gains, the crisis poses challenges that are much greater than those temporary gains.

The Ukrainian war is causing a rise in oil prices, which means financial surpluses that will support these countries’ plans to overcome the repercussions of the Corona pandemic, which has been going on for more than two years. However, the rise in prices may have negative aspects for the Gulf countries.

According to observers, Saudi Arabia does not want to see prices above $100 a barrel, considering that this is the safe limit for its strategy.

According to those observers, any increase over that limit will encourage and promote alternative energy – an issue that the Gulf states do not want because it may harm their oil production and consequently their oil revenues in the long term.

On the other hand, the war is causing other problems for the Gulf countries too.

Ukraine and Russia are known to be major exporters of wheat, grains, vegetable oils, agricultural materials and fertilizers, the prices of which are expected to rise due to the transportation and shipping costs associated with oil prices, as well as the disruption of their supplies as a result of the conflict.

Since the Gulf countries depend almost entirely on imports for their foodstuffs, the increase in oil prices will cause these countries to spend more, because the costs of industrial and agricultural production will rise globally.

Although the Gulf states have enough flexibility to deal with rising food prices, they also have concerns about the stability of their allies in the region, such as Morocco, Egypt and Jordan. Observers question the extent to which the Gulf countries will be able to provide their allies with basic foodstuffs if the war continues, especially since the world is still suffering from the repercussions of the Corona pandemic.

The challenges posed by the war in Ukraine are exacerbated by Western sanctions against Russia. Over the past years, the Gulf states have developed close economic relations with Russia as part of their strategy to diversify those relations away from the West.

The Gulf countries have close relations with Moscow in many fields, especially along the economic relations that entered a phase of strength and solidity after the formation of the “OPEC +” alliance. There is a commitment among the members of the group, and when the organization stops, OPEC countries will face a difficult situation, because they have adapted to Moscow when OPEC + was established with regard to oil, which is the main source of energy in the world.

Therefore, the imposition of sanctions on Russia will reduce its political and economic relationship with the countries of the region and the “OPEC” countries, and it may have negative effects on the cohesion of “OPEC +” in an indirect way.

On the other hand, the US sanctions on Russia will deprive the Gulf countries of communication with Moscow and the completion of the economic and political partnership that began years ago and has proven to be useful, and which comes from the standpoint of diversifying the Gulf region to its alliances, which is currently suffering from security imbalances due to the lack of American commitment towards Region.

More independent decision

For these and other reasons, it is understandable that the UAE, a non-permanent Arab member of the Security Council, abstained from voting in favor of a resolution condemning the Russian war in Ukraine.

The Saudi position, which is reluctant to compensate for Russian oil, and the UAE, which refuses to keep pace with the Western position in the crisis, highlight the two countries’ more independent foreign policies while deepening their relations with Washington’s rivals Moscow and Beijing.

In light of all this, the reactions of most Gulf states to the Russian invasion can be read as muted reactions that prefer to maintain cooperation with Moscow on geopolitical and energy issues, and do not pay attention to Western accusations that refusing to condemn Russia amounts to support for the invasion.

The Ukrainian crisis reveals the extent of the Gulf’s restlessness in the form of relations with Washington, which has been a guarantor of its security for decades. At the same time, it reveals the tendency of the countries of that region to diversify their relations regionally and internationally in a throe that will inevitably result in a multipolar world, where Washington will not have the first and last word. The Gulf positions in the crisis are one of the harbingers of this prospective world.

Islam Farag
Islam Farag is an Egyptian journalist, analyst and researcher. He is an expert on Middle East affairs and has contributed dozens of press kits on regional affairs and issues. He participated in many research projects within Egyptian governmental and non-governmental institutions. He has worked in many Egyptian and Arab press institutions as a journalist and analyst. He is interested in issues of the historic relationship of the Arab world with regional and world powers. Also he is interested in power conflicts in the middle east.

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