Is Qatar the next battlefield?

Over the past two years, Qatar has conducted over $86 billion worth of transactions in yuan and signed several economic agreements with China.

Is the Saudi-led crackdown on Qatar a Washington maneuver to nix the Emirate’s attempts to sell oil and gas in Chinese yuan, via Iran, undermining the hegemony of the US dollar that has been the international standard since the Nixon Presidency?

America’s hostility to Iraq and Libya was rooted in their attempts to sell oil in currencies other than the US dollar, and led to regime change in both nations, along with the brutal deaths of Saddam Hussain and Muammar Gaddafi, respectively.

Observers have long opined that the “real” reason for the war in Iraq was Saddam Hussein’s decision, announced in October 2000, to price Iraqi oil in the new currency of the European Union, rather than in US dollars, “the currency of the enemy”. It is well known that unless the price of oil is denominated in dollars, Washington cannot run its huge balance of payments deficits, as other nations hold accounts and reserves in dollars only to pay for oil.

According to a Guardian report of 2003, Iraq made handsome profits in selling oil in euros, until the US invasion (March 2003) forced oil sales back to the dollar. Prior to that, from 2001, under the UN oil-for-food program, almost all Iraqi oil exports were paid in euro and roughly 26 billion euros (£17.4 bn) was paid for 3.3 billion barrels of oil into an escrow account in New York. It earned a higher rate of interest in euros than it would have in dollars.

According to a Guardian report 2003, Iraq made handsome profits in selling oil in euros, until the US invasion forced oil sales back to the dollar.

Wikileaks has since revealed Hillary Clinton’s emails which show that the US and French President Nicolas Sarkozy were keen to attack Libya’s Gaddafi to scuttle his plan to unite Africa under a single gold-backed currency (African gold dinar) to be used to buy and sell oil on the global markets.

France moved UN Security Council Resolution 1973 for a no-fly zone over Libya, ostensibly to protect civilians. But an April 2011 email to Hillary Clinton, titled “France’s client and Qaddafi’s gold”, exposes Nicholas Sarkozy as saying for Gaddafi’s blood to obtain Libyan oil (French company, Total), ensure France’s regional influence, boost Sarkozy’s domestic reputation (for re-election; he lost), assert French military power, and curb Gaddafi’s sway over “Francophone Africa” (French colonial Africa).

Iraq made handsome profits in selling oil in euros, until the US invasion (March 2003) forced oil sales back to the dollar.

The email deals lengthily with the enormous threat that Gaddafi’s gold and silver reserves, estimated at “143 tons of gold, and a similar amount in silver,” posed to the French franc that was a leading African currency.

The “confidential” reason behind the war was that “This gold was accumulated prior to the current rebellion and was intended to be used to establish a pan-African currency based on the Libyan golden Dinar. This plan was designed to provide the Francophone African Countries with an alternative to the French franc (CFA).”

The 2 April 2011 email to Hillary Clinton (UNCLASSIFIED US Department of State Case No. F-2014-20439 Doc No. C05779612 Date: 12/31/2015) reports a high-ranking official on the National Libyan Council as stating that factions have developed within the Council, partly due to French cultivation of clients among the rebels.

General Abdelfateh Younis is said to be the leading figure closest to the French, and Younis has told his clique on the NLC that the French has promised to provide military trainers and arms.

There is some impatience over the pace of delivery, and the men understand that France has clear economic interests at stake. Sarkozy’s occasional emissary, the intellectual Bernard Henri-Levy, is not respected by the pro-France NLC action.

The email notes that Qaddafi has immense financial resources. On April 2, 2011, sources with access to advisors to Saif al-Islam Qaddafi revealed in strictest confidence that while the freezing of Libya’s foreign bank accounts did affect Muammar Qaddafi, his ability to equip and maintain his armed forces and intelligence services was intact. These sources said that Qaddafi’s government holds 143 tons of gold and a similar amount in silver.

The recently promoted Saudi crown prince, Mohammad bin Salman, is reputed to be the prime mover behind the attempt to isolate Qatar.

In late March 2011, these stocks were moved to SABHA (southwest in the direction of the Libyan border with Niger and Chad), from the vaults of the Libyan Central Bank in Tripoli.

This gold was intended to be used to establish a pan-African currency based on the Libyan golden dinar and was to offer the Francophone African Countries with an alternative to the French franc.

Seen in this context, Qatar could be the next country to face a Syrian or Yemen-style attempt at regime change. It is pertinent that on June 5, soon after the visit of US President Donald Trump to Saudi Arabia, Riyadh led other members of the Gulf Cooperation Council (GCC) in an attempt to browbeat Qatar through a list of 13 demands that Doha must comply with, or face unspecified action. Most western capitals agree that the demands are difficult to accept.

Briefly, these include shutting down Al-Jazeera and its affiliate stations, and other news outlets funded by Qatar such as Middle East Eye; curbing diplomatic ties with Iran and expelling members of Iran’s Revolutionary Guard (who are not present in Qatar); terminating the Turkish military base in Qatar; consenting to monthly audits for a year after accepting the demands, and aligning with other Gulf and Arab countries militarily, politically, socially, and economically. As of now, Qatar has rejected the demands as unreasonable.

The recently promoted Saudi crown prince, Mohammad bin Salman, is reputed to be the prime mover behind the attempt to isolate Qatar. The aim is to curtail Qatar’s links with Iran, Riyadh’s main regional rival. But this is not practical for Qatar as it derives much of its wealth from the offshore South Pars natural gas field, which it shares with Iran. This relationship is why Iran, like Turkey, immediately sent Doha food supplies after the Saudi blockaded the only land route to the emirate.

It is pertinent that Qatar, like Turkey and Saudi Arabia, had initially wanted to build a natural gas pipeline to Europe, through Syria, against the wishes of President Assad. This prompted the Syrian Alawi/Shia government to urge Shia-majority Iran and Iraq to build a pipeline eastward, excluding the Sunni-majority Qatar, Turkey, and Saudi Arabia, which backed the anti-Assad fighters. Qatar has since reconciled to the near collapse of the anti-Assad front.

Over the past two years, Qatar has conducted over $86 billion worth of transactions in yuan and signed several economic agreements with China.

It is notable that Iran too conducts its oil-related business deals with China in yuan. Soon after the nuclear deal with Washington in 2015, Tehran moved to improve its economy by upping production on its share of the Iran-Qatari gas reserve and signed a deal with France’s Total in November 2016.

Qatar was forced to join and lifted a self-imposed ban on developing the gas field in April 2017.

The Iran-Qatar deal has the potential to derail American hegemony over world financial markets. This explains President Trump’s move to make Riyadh his first foreign visit. Trump has made his intention to secure regime change in Tehran clear. How he intends to cope with Qatar, which hosts the largest US military base in the region, with around 11,000 troops, is less clear. Shifting the base could potentially destabilize other host countries. For now, he could leave the problem to Riyadh. But as events in Syria and Yemen show, it is easier to get embroiled in a conflagration in the Middle East than it is to get out.

Note:
1. The views expressed here are those of the author and do not necessarily represent or reflect the views of PGurus.