"Forget Terrorism": The Real Reason Behind The Qatar Crisis Is Natural Gas

According to the official narrative, the reason for the latest Gulf crisis in which a coalition of Saudi-led states cut off diplomatic and economic ties with Qatar, is because - to everyone's "stunned amazement" - Qatar was funding terrorists, and after Trump's recent visit to Saudi Arabia in which he urged a crackdown on financial support of terrorism, and also following the FT's report that Qatar has directly provided $1 billion in funding to Iran and al-Qaeda spinoffs, Saudi Arabia finally had had enough of its "rogue" neighbor, which in recent years had made ideologically unacceptable overtures toward both Shia Iran and Russia.

However, as often happens, the official narrative is traditionally a convenient smokescreen from the real underlying tensions.

The real reason behind the diplomatic fallout may be far simpler, and once again has to do with a long-running and controversial topic, namely Qatar's regional natural gas dominance.

Recall that many have speculated (with evidence going back as far back as 2012) that one of the reasons for the long-running Syria proxy war was nothing more complex than competing gas pipelines, with Qatar eager to pass its own pipeline, connecting Europe to its vast natural gas deposits, however as that would put Gazprom's monopoly of European LNG supply in jeopardy, Russia had been firmly, and violently, against this strategy from the beginning and explains Putin's firm support of the Assad regime and the Kremlin's desire to prevent the replacement of the Syrian government with a puppet regime.

Note the purple line which traces the proposed Qatar-Turkey natural gas pipeline and note that all of the countries highlighted in red are part of a new coalition hastily put together after Turkey finally (in exchange for NATO’s acquiescence on Erdogan’s politically-motivated war with the PKK) agreed to allow the US to fly combat missions against ISIS targets from Incirlik. Now note which country along the purple line is not highlighted in red. That’s because Bashar al-Assad didn’t support the pipeline and now we’re seeing what happens when you’re a Mid-East strongman and you decide not to support something the US and Saudi Arabia want to get done.

Now, in a separate analysis, Bloomberg also debunks the "official narrative" behind the Gulf crisis and suggests that Saudi Arabia’s isolation of Qatar, "and the dispute’s long past and likely lingering future are best explained by natural gas."

The reasons for nat gas as the source of discord are numerous and start in 1995 "when the tiny desert peninsula was about to make its first shipment of liquid natural gas from the world’s largest reservoir. The offshore North Field, which provides virtually all of Qatar’s gas, is shared with Iran, Saudi Arabia’s hated rival."

The result to Qatar's finances was similar to the windfall that Saudi Arabia reaped from its vast crude oil wealth.

The wealth that followed turned Qatar into not just the world’s richest nation, with an annual per-capita income of $130,000, but also the world’s largest LNG exporter. The focus on gas set it apart from its oil producing neighbors in the Gulf Cooperation Council and allowed it to break from domination by Saudi Arabia, which in Monday’s statement of complaint described Qataris as an “extension of their brethren in the Kingdom” as it cut off diplomatic relations and closed the border.

In short, over the past two decades, Qatar become the single biggest natural gas powerhouse in the region, with only Russia's Gazprom able to challenge Qatar's influence in LNG exports.

To be sure, Qatar has shown a remarkable ability to shift its ideological allegiance, with the FT reporting as recently as 2013, that initially Qatar was a staunch supporter, backer and financier of the Syrian rebels, tasked to topple the Assad regime, a process which could culminate with the creation of the much maligned trans-Syrian pipeline.

The tiny gas-rich state of Qatar has spent as much as $3bn over the past two years supporting the rebellion in Syria, far exceeding any other government, but is now being nudged aside by Saudi Arabia as the prime source of arms to rebels.


The cost of Qatar’s intervention, its latest push to back an Arab revolt, amounts to a fraction of its international investment portfolio. But its financial support for the revolution that has turned into a vicious civil war dramatically overshadows western backing for the opposition.

As the years passed, Qatar grew to comprehend that Russia would not allow its pipeline to traverse Syria, and as a result it strategically pivoted in a pro-Russia direction, and as we showed yesterday, Qatar’s sovereign wealth fund agreed last year to invest $2.7 billion in Russia’s state-run Rosneft Oil, even as Qatar is host of the largest US military base in the region, US Central Command. This particular pivot may have also added to fears that Qatar was becoming a far more active supporter of a Russia-Iran-Syria axis in the region, its recent financial and ideological support of Iran notwithstanding.

As a result of the tiny nation's growing financial and political "independence", its neighbors grew increasingly frustrated and concerned: “Qatar used to be a kind of Saudi vassal state, but it used the autonomy that its gas wealth created to carve out an independent role for itself,” said Jim Krane, energy research fellow at Rice University’s Baker Institute, quoted by Bloomberg.

Furthermore, Qatar’s natural gas output has been "free from entanglement" - and political pressure - in the OPEC, the oil cartel that Saudi Arabia dominates.

“The rest of the region has been looking for an opportunity to clip Qatar’s wings.”

And, as Bloomberg adds, "that opportunity came with U.S. President Donald Trump’s recent visit to Saudi Arabia, when he called on “all nations of conscience” to isolate Iran. When Qatar disagreed publicly, in a statement the government later said was a product of hacking, the Saudi-led retribution followed."

To be sure, in a series of tweets, Trump himself doubled down on the "official narraitve", taking credit for Qatar's isolation (perhaps forgetting that a US base is housed in the small nation).

The cynics may be forgiven to assume that if Trump is tweeting that the reason for Qatar's isolation is "to end the horror of terrorism", even as the US just signed a $100+ billion arms deal with the single biggest supporter of terrorism in the world, Saudi Arabia, then indeed the Trump-endorsed "narrative" is to be dismissed outright.

Which again brings us back to nat gas, where Qatar rapidly emerged as the dominant, and lowest cost producer at a time when its neighbors started demanding the commodity on their own, giving the tiny state all the leverage. As Bloomberg adds "demand for natural gas to produce electricity and power industry has been growing in the Gulf states. They’re having to resort to higher-cost LNG imports and exploring difficult domestic gas formations that are expensive to get out of the ground, according to the research. Qatar’s gas has the lowest extraction costs in the world."

Of course, with financial wealth came the need to spread political infludence: "

Qatar gas wealth enabled it to develop foreign policies that came to irritate its neighbors. It backed the Muslim Brotherhood in Egypt, Hamas in the Gaza Strip and armed factions opposed by the UAE or Saudi Arabia in Libya and Syria. Gas also paid for a global television network, Al Jazeera, which at various times has embarrassed or angered most Middle Eastern governments.

And, above all, "gas prompted Qatar to promote a regional policy of engagement with Shiite Iran to secure the source of its wealth."

And here the source of tension emerged: because as Steven Wright, Ph.D. Associate Professor at Qatar University told Bloomberg, “you can question why Qatar has been unwilling to supply its neighboring countries, making them gas poor,” said Wright, the academic, speaking by telephone from the Qatari capital Doha. “There probably was an expectation that Qatar would sell gas to them at a discount price.”

It did not, and instead it took a step backward in 2005, when Qatar declared a moratorium on the further development of the North Field that could have provided more gas for local export, adding to the frustrations of its neighbors.

Qatar said it needed to test how the field was responding to its exploitation, denying that it was bending to sensitivities in Iran, which had been much slower to draw gas from its side of the shared field. That two-year moratorium was lifted in April, a decade late, after Iran for the first time caught up with Qatar’s extraction rates.

As Qatar refused to yield, the resentment grew.

“People here are scratching their heads as to exactly what the Saudis expect Qatar to do,” said Gerd Nonneman, professor of international relations and Gulf studies at Georgetown University’s Doha campus. “They seem to want Qatar to cave in completely, but it won’t call the Muslim Brotherhood a terrorist organization, because it isn’t. And it isn’t going to excommunicate Iran, because that would jeopardize a relationship that is just too fundamental to Qatar’s economic development.

* * *

Whether nat gas is the source of the Qatari isolation will depend on the next steps by both Saudi Arabia and Iran. Saudi Arabia, along with the United Arab Emirates and Egypt - are all highly reliant on Qatari gas via pipeline and LNG.

According to Reuters, traders startled by the development, have begun to plan for all eventualities, especially any upsets to piped gas supplies from Qatar to the UAE. The UAE consumes 1.8 billion cubic feet/day of Qatari gas via the Dolphin pipeline, and has LNG purchase agreements with its neighbor, leaving it doubly exposed to tit-for-tat measures, industry sources and traders said.

So far flows through Dolphin are unaffected but traders say even a partial shutdown would ripple through global gas markets by forcing the UAE to seek replacement LNG supply just as its domestic demand peaks.

With LNG markets in bearish mood and demand weak, the UAE could cope with Qatar suspending its two to three monthly LNG deliveries by calling on international markets, but Dolphin piped flows are too large to fully replace.


"A drop off in Dolphin deliveries would have a huge impact on LNG markets," one trader monitoring developments said.

And since it all boils down to who has the most leverage as this latest regional "balance of power" crisis unfolds, Qatar could simply take the Mutual Assured Destruction route, and halt all pipeline shipments to its neighbors crippling both theirs, and its own, economy in the process, to find just where the point of "max pain" is located.


Looney barysenter Tue, 06/06/2017 - 11:11 Permalink

  Al Jazeera has a nice timeline of the Saudi-Qatari tensions going way back, but the most important is this: “Saudi Arabia revokes approval of Qatar's regional plans 2006: Saudi Arabia withdrew its approval for Qatari plans to build a gas pipeline to Kuwait, which would have passed through Saudi territorial waters. The memorandum of understanding between Qatar and Kuwait had been signed in 2000, and according to the memorandum, Kuwait would be importing gas from Qatar. Saudi gave its agreement for the pipeline to pass through its territorial waters in 2003, and the following year, Kuwait agreed to import the gas in a liquefied state by tanker until the pipeline was built. Saudi also protested a plan to build a pipeline taking Qatari gas to the UAE in 2006, and in 2005 protested a plan to build a bridge linking Qatar to the UAE. A similar project for a bridge between Qatar and Bahrain also stalled; construction was meant to begin in 2008 but changed plans and financial obstacles have prevented the project from taking off.” Looney

In reply to by barysenter

nope-1004 HenryKissinger… Tue, 06/06/2017 - 11:35 Permalink

I've said it all along:  Terror is a cover for securing foreign resources.  The lie about "war on terror" is, in reality, a 180 degrees flip.  It is a covert war on other nations by the British alliance to secure and control resources.  The "war on terror" is the big lie, so that the populations of the world will see invading other countries and necessary and OK.  False flags are a big part of the convincing process.When other nations don't comply, "sanctions" are imposed.  Banker imposed punishment for being a terrorist nation.....  lmfao. 

In reply to by HenryKissinger…

Joe Davola mtl4 Tue, 06/06/2017 - 12:49 Permalink

Did lifting the sanctions on Iran allowed them to catch up with their gas extraction, enabling Qatar to extract more?  In anticipation of Hillary being elected and setting the stage for the Turkey pipeline?And if Putin wants to stop a pipleline, he just needs to come up with a catchy hashtag - take #NoDAPL, for instance.

In reply to by mtl4

PrayingMantis Joe Davola Tue, 06/06/2017 - 13:59 Permalink

... from that map, I could picture Qatar's pipeline crossing under the water into Iran and merging with the Islamic pipeline through Iraq onto Syria and into EU ... now, back to the "hostage ransom" for Qatari royals "hunting" in Iraq, the 1B$ "ransom" Qatar paid to Iran/AlQaeda(Iraq) would now appear as a bribe to piggy-back Qatar's oil & gas on to Iran/Iraq's pipelines ... and because Iran is Syria-friendly, Qatar gets a friendly ride through Syria ...

... House of Saud is left out in the desert heat of their previously proposed SA-Q pipeline which Assad said nyet so far with Vlad's blessings and which caused the Syrian invasion by proxy led by and with the help of US/NATO ... and with dwindling oil & gas prices, House of Saud is now punishing and undermining the House of Thani by rounding up the other sandbaggers in the area to shun and behead the Qatari economy ...

... just follow the sandbaggers' oil and gas money to see which desert hands were greased ...


In reply to by Joe Davola

jeff montanye PrayingMantis Tue, 06/06/2017 - 17:18 Permalink

as i was reading this my first thought was i remember jay leno saying the real reason behind the iraq war was oil.  in a conspiratorial voice, letting us in on something.  then i remembered all those people in the oil industry that worked at the project for the new american century, the authors of that war: William Kristol, Co-founder and Chairman[6]Robert Kagan, Co-founder[6]Bruce P. Jackson[6]Mark Gerson[6]Randy Scheunemann[6]Project staff[edit]Other director(s):Ellen Bork, Deputy Director[6]Timothy Lehmann, Assistant Director[6]Other associates:Senior fellows:Thomas Donnelly, Senior Fellow[6]Reuel Marc Gerecht, Senior Fellow[6]Gary Schmitt, Senior Fellow[6][61]Research associates:Michael Goldfarb, Research Associate[6]Former directors and staff[edit]Daniel McKivergan, Deputy Director[62]Signatories to Statement of Principles[edit]Elliott Abrams[5]Gary Bauer[5]William J. Bennett[5]John Ellis "Jeb" Bush[5]Dick Cheney[5]Eliot A. Cohen[5]Midge Decter[5]Paula Dobriansky[5]Steve Forbes[5]Aaron Friedberg[5]Francis Fukuyama[5]Frank Gaffney[5]Fred C. Ikle[5]Donald Kagan[5]Zalmay Khalilzad[5]I. Lewis "Scooter" Libby[5]Norman Podhoretz[5]J. Danforth Quayle[5]Peter W. Rodman[5]Stephen P. Rosen[5]Henry S. Rowen[5]Donald Rumsfeld[5]Vin Weber[5]George Weigel[5]Paul Wolfowitz then i decided it was neoconservatives defined by g.h.w. bush as "israel". but my next thought was: just how far is it from qatar to iran under the persian gulf?maybe 230 miles.  through some warm clear water three quarters surrounded by land.  the langeled pipeline?   750 miles through the north sea. perhaps they need some logistical help.  https://en.wikipedia.org/wiki/China_National_Petroleum_Corporation?

In reply to by PrayingMantis

PrayingMantis Arnold Tue, 06/06/2017 - 21:42 Permalink

... @arnold ...

... Qatar's North Fields is attached to Iran's South Pars on the Qatar - Iran Maritime border ... from there, assuming the scale is correct, is only about 50 Kms to Iran's mainland. I'd assume there are o & g fields on Iran's Pars which would carry their o & g across the water to mainland ... if there are no pipes yet ( and that's a big if ), that's when Iran would build the line (financed by the "bribe") paid by Thani ...

... laying pipes may or may not be easy but those desert rats had done it in the past using the power of their money employing multi-national companies from the west (read: US/UK) ... mainly because those sand ni666ers don't have the necessary expertise to lay them pipes ... they're good at camel-racing and beheadings ...


In reply to by Arnold

JRobby mtl4 Tue, 06/06/2017 - 14:08 Permalink

It is always about moneyIt is always about O&GIt is always about increasing the wealth of a select pool of the oligarchy that battle each other for MOAR!The dead innocents, children, women and men are just part of the scenery for the MSM to use to pit the masses against each other for the purpose of MORE WAR!!!

In reply to by mtl4

equity_momo BennyBoy Tue, 06/06/2017 - 16:51 Permalink

I understand the logic behind all these pipeline wars , from Chechnya in the 90s to Iraq , Ukraine , Syria yadda yadda yadda , but on the topic of this Qatari pipeline through Syria to Turkey , why not just stick it straight through southern Jordan then up to Tel Aviv?Then either build an LNG terminal and ship it all over Europe ( i know this would add cost ) or do what Russia is doing in the Black Sea and build a short Med pipeline from Tel Aviv to Turkey ?  Just avoid Syria.     All those other players are part of the ZWO so whats the problem??

In reply to by BennyBoy

Mr 9x19 Art Van_Delay Tue, 06/06/2017 - 16:27 Permalink

qatar gonna ask help  to russia, it tell you, count in weeks before shit starts, and then you will have  the request popping like magic monday. USA/europ is acting more aggressivly month after month, the couple of next years will reveal one thing, 20th century of wars will be shit compared to this one. forget you sci-fi futur, the reel one is more like greystoke.

In reply to by Art Van_Delay

Buckaroo Banzai Jim Sampson Tue, 06/06/2017 - 12:06 Permalink

Calling sand nigger politics a clownworld shitshow would be a gross disservice to clownworld shitshows. Creating the petrodollar got us in bed with these violent inbred retards, biggest mistake we ever made. That miserable Jew Kissinger probably was arrogant enough to think we could control these apes, thanks to their lunatic religion we got a lot more than we bargained for. Like handing a three-year-old a straight razor, nothing good can possibly come of it. Sure hope Trump has a plan to get us out of this region without the world blowing up. To say he has his hands full is the understatement of the century. The only consolation is, if Hillary was in office, things would already be ten times worse.

In reply to by Jim Sampson

Gorgeous Buckaroo Banzai Tue, 06/06/2017 - 15:10 Permalink

Nicely articulated.  That these camel jockeys would somehow become the epicenter of the world's most ruthless and fanatical "religion" and also sit on huge energy reserves is some piece of bad luck.  But can Trump extricate the US from this mess?  Doubt it's even possible.  Best approach would be to pick the saner side of the Russians/Iranians than stick with the Saudi head choppers and women mutilators.   Sadly, as long a MIC money flows in $100B chunks, that aint gonna happen.

In reply to by Buckaroo Banzai

my_nym Buckaroo Banzai Tue, 06/06/2017 - 15:22 Permalink

Zerohedge is usually just half the story.  Yes, it's obviously about economic power and pipeline leverage and so forth.  But then they usually leave out the most influential player, Zionist Jews along with all their plutocrats, think tanks and lobbies.  (Anthony Weiner and Huma Abedin are like a literal representation of the alignment between Saudis and Zionists, with the Clinton crime family supporting that union.)"The Qataris have for a long time ridden the fence as well. They have tried to stay on good terms with everyone, including Iran, which is unacceptable to Israel and its proxies (USA, Saudi Arabia, Egypt).When push comes to shove, all the Sunni states are taking Jewry’s side and preparing for what looks like a looming world war. They are on the brink of forming a “Sunni Arab NATO” to advance Israeli interests against Iran using the weapons they will receive from America. This is a stain on the Trump administration, as it will only proliferate the ISIS terrorism these countries specialize in exporting all over the world."   DS

In reply to by Buckaroo Banzai

WTFUD my_nym Tue, 06/06/2017 - 15:40 Permalink

Qatar sees which way the wind's blowing so you can't blame them for jumping ship, nothing personal.

Wasn't too long ago that the Kenyan Government displaced a few communities, who'd resided on their ancestral land for centuries and whom were summarily evicted to make way for a major Qatari Agricultural Project/Investment.

Russia-Iran & Qatar hold 75-80% of the Worlds Proven Gas Reserves and so Vichy DC & their Axis of Evil can go blow wind out their asses.

In reply to by my_nym

Mr 9x19 Buckaroo Banzai Tue, 06/06/2017 - 16:33 Permalink

solution is post era oil and lock border to starve them.should take 2 generations, ~~ 40 years. tip : do not count on it, they are already  running in europ just like  oil is over and  occident is pushing eco solutions to bypass this fucking unaffordable remaining  oil.tip 2 : you gonna pay your futur electrical car battery a lot  more moneytip 3 : congo will be annihilated within 3 years because of cobalt.tip 4 : in less than 15 years all non nato alligned nations with ressources containing gas / oil / rare metals for eletronics are a dead nation.  

In reply to by Buckaroo Banzai

X- x3 Jim Sampson Tue, 06/06/2017 - 12:43 Permalink

"Lucky for N. Korea, they don't have much of anything."......buzzzzz...WRONG ANSWER Jim Sampson .LEARN:"Were you aware that it was recently discovered that North Korea is sitting on the worlds largest deposit of rare earth metals? In fact their deposit is twice as large as the world’s total known reserves prior to this discovery. This is find is estimated to be worth trillions of dollars (that’s trillions with a T)...." Washington's REAL Motives in North Korea and Afghanistan ...http://stormcloudsgathering.com/n-korea-afghanistan-rare-earth-metals/ https://duckduckgo.com/?q=N.+Korea+strategic+metals+trillions&t=ffcm&ia…X-

In reply to by Jim Sampson

Not Too Important X- x3 Tue, 06/06/2017 - 14:23 Permalink

North Korea isn't going anywhere.They don't need to be able to hit the United States. All they have to do is target South Korea's and Japan's nuclear power plants, with their extensive Spent Fuel Pools. The damage would be incalculable, with all that aerosolized enriched uranium and plutonium from the nuclear fuel rods blowing West in the jetstream. The deaths across North America and Europe would start immediately.Can the Western world stop the fat kid from doing this? Not with the military we have today. OTOH, it would only accelerate what is going to happen in 9 years anyway, so think of how a group of NWO psychopaths would approach this problem, and plan accordingly.

In reply to by X- x3

Bes nope-1004 Tue, 06/06/2017 - 11:46 Permalink

TRUMP is a neo-con and in on the take.oil, foreign wars, travel ban, israel, terrorism, lybia, syria, afghanistan, iraq, and now QATARdoes anyone not see this shit spreading?stop believing the dem vs rep bullshit.it's the banksters, and the oligarchs you should worry about.   Goldman, Wall Street, the Fed, the MIC, and even Putin is among them too dumbfucks,and Trump the cuck is beholden to all of them. do you not see where this is going? but cankles!  but seth rich!shut the fuck up. orange jesus and the congress is selling us all out and fucking us all up...https://m.youtube.com/watch?v=Q-tl00owXmwwar is a racket.    #maga

In reply to by nope-1004

nope-1004 Bes Tue, 06/06/2017 - 12:08 Permalink

You have a few down votes, and I don't know why.  Reason I don't know why is because I, like you, have totally given up on any form of change or help coming from .gov.  Whoever is prez is irrelevant.I am totally convinced that the only way things will change is through war, either global or civil.  The US is so fucked up and so controlled by the banking elite that we will never have our country back unless we take to the streets.  And that is not going to happen as long as foreign nations are paying our bills through agreeing to use USD as reserve and domestically the EBT cards are working (which requires more debt, so more foreign invasions and GS offices).Humanity is screwed unless people act, not politicians.  I believe that "Drain the Swamp" was the slogan given to Trump much like Obama's idiotic "Hope and Change".  I don't think he will ever drain any swamp.  For there to be any evidence of a swamp draining to me means that we need to start seeing bankers die or improsoned.  Since Lanny Breuer and Eric Holder proved that bankers are above ALL law, the politician in office is irrelevant.It's time for the people of this fine nation to act.

In reply to by Bes