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Qatar warns of global economic collapse as conflict with Iran intensifies

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Qatar’s Minister of State for Energy Affairs, Saad al-Kaabi, has warned that the ongoing conflict in West Asia could push global economies toward a precipice, according to comments made to the Financial Times.

Kaabi stated that while not all parties in the region have yet declared force majeure, QatarEnergy has taken that step.

Pointing out that other exporters in the Gulf might adopt similar measures should the conflict persist, Kaabi noted that he expects every exporter in the region to declare force majeure if the situation continues for several more days.

Operations suspended at Ras Laffan facilities

Following a drone strike by Iran on the Ras Laffan facility, Kaabi confirmed that operations at the hub for Qatar’s liquefied natural gas (LNG) have been disrupted. He stated that even if the conflict were to end immediately, it would take weeks or even months for Qatar to return to its normal shipment cycle.

Qatar, the world’s second-largest LNG producer, was forced to declare force majeure this week following the attack.

Kaabi, who also serves as the CEO of QatarEnergy, emphasized that the company had no choice but to take this decision.

“We received intelligence from military units regarding an imminent threat to the facilities. We halted operations safely and evacuated approximately 9,000 personnel within 24 hours,” the minister said. “We cannot put our staff at risk while they are in a military zone under attack. Consequently, we declared force majeure.”

Cessation of conflict a prerequisite for production

Kaabi stated that production can only resume once the conflict has ended entirely. He noted that they are awaiting confirmation from the military that hostilities have fully ceased and that the facilities no longer face an imminent risk of attack.

This situation will also affect Qatar’s $30 billion North Field expansion project. The project, which aims to increase production capacity from 77 million tons to 126 million tons annually by 2027 and was scheduled to begin initial production in the third quarter, is now expected to face delays.

Oil prices projected to reach $150

Warning that a rise in energy prices is inevitable if the conflict drags on, Kaabi cautioned that if passage through the Strait of Hormuz cannot be secured, oil prices could reach $150 per barrel.

Ship traffic through the strait, which handles 20% of the world’s oil and gas, has effectively ceased following operations by the US and Israel against Iran. Reports indicate that at least 10 vessels have been attacked, insurance costs have surged, and shipowners are unwilling to expose their crews to the risk.

Kaabi stated that safe passage is currently unattainable due to the 24-mile-wide strait’s proximity to the Iranian coast. “Given the current nature of the attacks, sending vessels into the strait is extremely dangerous,” he said. “Iran is targeting military vessels, and shipowners see themselves as direct targets.”

He added that the proposal by US President Donald Trump for US naval escorts and supplementary insurance is insufficient to initiate safe passage.

Warning of a chain reaction in the global economy

Stating that the interruption in energy exports will affect not only energy markets but the global economy at large, Kaabi warned, “If the conflicts persist for a few more weeks, economic growth will contract worldwide.”

“Energy prices will rise, shortages will occur in certain products, and a chain reaction will ensue because factories cannot secure supply,” he said.

Kaabi emphasized that beyond energy, trade between the Gulf and the rest of the world could grind to a halt, creating serious repercussions for both Gulf economies and nations that trade with the region. The region accounts for a significant portion of global petrochemical production and fertilizer raw materials.

Logistical challenges to persist

Kaabi stated that while there is no damage to Qatar’s offshore energy facilities, the condition of the onshore facilities is still being assessed. He indicated that it is not yet clear how long the repair process will take.

The minister noted that even if production restarts, logistical challenges will persist. Kaabi reported that of Qatar’s fleet of 128 tankers, only six or seven are currently ready, emphasizing that loading each vessel takes one to two days and that capacity remains limited.

Middle East

US waives human rights terms on $320m military aid to Egypt

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The US State Department stated that it has waived human rights conditions on more than $300 million in military aid to Egypt.

The statement emphasised that this decision was taken in consideration of Cairo’s “helpful role” since the outbreak of the war against Iran.

Egypt began receiving substantial support from the US after signing a peace treaty with Israel in 1979.

Since the late 1980s, the country has received approximately $1.3 billion annually in US military assistance.

A portion of this aid is subject to conditions related to human rights and democracy, which can be waived on national security grounds.

Withholding funds, including during the administration of former US President Joe Biden, has caused tension between Cairo and Washington in the past.

A letter dated 21 September and addressed to various congressional committees, obtained by Reuters, stated that Secretary of State Marco Rubio “decided to waive the certification requirement under the fiscal year 2025 Foreign Military Financing programme for Egypt of $320 million.”

This waiver was subsequently confirmed by the State Department.

An accompanying memorandum justifying the decision stated that this portion of military aid was “essential for counterterrorism, border security, or non-proliferation programmes, or otherwise important to the national security interests of the United States.”

The memorandum, dated 4 September and bearing Rubio’s signature, stated: “Exercising this waiver authority is critical to the US-Egypt relationship and to US national security priorities, particularly given the helpful role Egypt has played in the aftermath of Operation Epic Fury.”

“Operation Epic Fury” is the designation used by the US military for the campaign launched jointly with Israel against Iran in late February.

The State Department memorandum, whose authenticity was confirmed by two sources in Washington familiar with the letter, did not provide detailed information regarding what was termed Egypt’s “helpful role”.

The State Department’s annual decision on military aid to Egypt typically covers funds allocated for the preceding fiscal year, which ends on 30 September.

A State Department spokesperson stated that Rubio waived the certification in the interest of US national security and that the US continues to cooperate with the Egyptian government across a range of issues.

In an emailed statement, the spokesperson said: “This waiver recognizes the importance of maintaining security cooperation with Egypt at a time of significant security challenges in the region.”

The Egyptian Ministry of Foreign Affairs did not immediately comment on the matter.

The spillover effects of the Iran war have imposed a heavy toll on US security partners, including Egypt.

Owing to rising fuel prices and other disruptions, the Egyptian economy is passing through a difficult period.

Under the Biden administration, the US withheld portions of the annual military allocation on multiple occasions over Egypt’s human rights record.

In 2024, following the Hamas-led 7 October attack on Israel and the subsequent war in Gaza, the Biden administration set aside human rights conditions, disbursing the entire $1.3 billion allocation to Egypt for the first time in its tenure.

Human rights organisations have long accused Egypt, under the administration of President Abdel Fattah al-Sisi, of widespread human rights abuses, including torture and enforced disappearances.

This week, Egyptian police detained six journalists from a fact-checking and investigative media outlet, accusing them of spreading false information on behalf of the banned Muslim Brotherhood.

Egyptian authorities state that they have taken steps to address human rights issues. Sisi said stability is paramount and that the government supports human rights by working to provide for basic needs.

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Britain expands curbs on arms exports to Israel over Gaza risks

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Britain has significantly broadened its military export restrictions targeting Israel, suspending or rejecting more than 80 licences for items the IDF could use in Gaza.

This figure is nearly triple the number affected when the policy was first introduced in September 2024.

United Kingdom Minister of State for the Middle East Stephen Doughty said that as part of what he described as a “tighter system” for assessing exports to Israel, more than 50 further export applications have been refused since approximately 30 licences were initially suspended.

Under the initial decision taken in September 2024, 30 of roughly 350 licences were suspended after the British government concluded there was a “clear risk” that certain military exports could be used to commit or facilitate serious violations of international humanitarian law in Gaza.

The affected equipment included components for military aircraft, drones, naval systems, and targeting gear.

Doughty said additional measures adopted this month established what he termed a “double safeguard” mechanism within the approvals process.

Export applications must now be assessed both against existing international humanitarian law criteria and in light of Britain’s position on the legality of Israel’s presence in the Palestinian territories.

“We have so far suspended or refused more than 80 licences,” Doughty said, adding that he had personally examined each licence.

Despite the wider restrictions, British-origin parts entering the international F-35 fighter jet supply chain continue to be largely exempt.

The UK government argues that preventing British-made components from entering the global F-35 pool could undermine the programme as a whole and have serious consequences for the security of the UK and its allies.

Direct exports of F-35 parts intended specifically for Israel remain suspended.

Doughty defended maintaining the supply of components via the international programme, arguing that halting it could have severe ramifications for the broader European and allied security architecture.

Foreign Affairs Committee Chair Emily Thornberry challenged this position, arguing that the issue was political rather than purely legal.

Thornberry suggested adopting an approach similar to the Dutch model, under which components entering the international supply chain could be flagged as “not intended for aircraft bound for Israel”.

The initial suspension was implemented in September 2024 by then Foreign Secretary David Lammy.

Lammy stressed at the time that the measure did not constitute an arms embargo and applied solely to items assessed as usable in military operations in Gaza.

Since then, the policy has been tightened further under Prime Minister Andy Burnham.

The expanded export restrictions follow the Burnham government’s adoption of a more confrontational policy toward the Israeli government.

Foreign Secretary Ed Miliband drew sustained applause at the Labour Party’s annual conference in Liverpool after delivering a sharp critique of the Netanyahu government’s policies and defending the decision to ban trade with Israeli settlements in the West Bank.

Accusing Israel of committing war crimes in Gaza, Miliband stated that the British government heard public outrage over the conflict, telling delegates: “We hear you. You were right.”

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Middle East

Netanyahu holds secret UAE talks with Saudi Arabia and Arab officials

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Israeli Prime Minister Benjamin Netanyahu met with representatives of Gulf and Arab nations that lack diplomatic ties with Israel, including Saudi Arabia, during his weekend visit to the United Arab Emirates.

Sources close to the gathering told the Israeli newspaper Yedioth Ahronoth on Monday that representatives from Morocco, Libya, Jordan, and Qatar also took part in the meeting.

Netanyahu made a unannounced visit to Abu Dhabi on Sunday, where he met with the country’s leader, Mohammed bin Zayed Al Nahyan.

According to Israeli media, this marked the first time the United Arab Emirates officially confirmed a visit by Netanyahu.

The meeting was arranged by Mossad Director Roman Goffman “at the request of Saudi Arabia, which asked for Israel’s assistance against Houthi attacks in the Red Sea region,” according to Yedioth Ahronoth.

The discussions addressed Iran and the Houthi militia. The newspaper added that the Arab states heard from Israel that “Israel is prepared to assist countries in the region with air defence systems, just as it aided the UAE during the conflict with Iran.”

Conflict in Yemen intensified in September when Ansarullah militiamen launched a rapid offensive that seized Yemen’s entire Red Sea coastline, including the vital maritime corridor of the Bab el-Mandeb Strait.

The Yemeni resistance also imposed a blockade on Saudi Arabia’s energy exports and staged multiple attacks against the kingdom.

Saudi Arabia reportedly sought military assistance from the US to counter Ansarullah.

Washington declined to attack the Houthis directly, but announced that it would provide intelligence and targeting support.

Reporting on the same visit, The Jerusalem Post said Netanyahu spent six hours in the UAE and that the principal subject of his discussions with MBZ was Iran.

Citing sources familiar with the matter, the newspaper added that the trip came “after Netanyahu exerted heavy pressure on the United Arab Emirates to arrange a meeting ahead of the Israeli elections on 27 October.”

Separately, the Associated Press, citing a person with direct knowledge of the meeting, reported that Netanyahu’s visit to the UAE was arranged in part to ask MBZ to deny reports that he had warned the Israeli prime minister of an impending Hamas threat prior to 7 October 2023.

According to Israeli media, Netanyahu’s office denied the AP report, issuing the following statement:

“Fake news. The visit focused solely on strengthening ties between the two countries and on regional issues.”

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