Persian Gulf Rulers In Peril As Economic Shocks Continue

Saudi Arabia is being blamed for the instability in the oil markets following its move in March to force prices down (AFP)

Middle East Monitor: 'Dangerous crossroads': Gulf rulers in peril as economic shocks continue

Drop in oil prices and hit from coronavirus are exposing unwise policies and raising fears of a plunge into violence

Nearly two months ago, before the global spread of the coronavirus, Riyadh made a bold gambit to slash oil prices.

The Saudis knew it was going to hit their bottom line – their break-even oil price to balance the budget – but they did not foresee such a dramatic slump in demand as the global economy ground to a halt.

Economists described the impact on Middle Eastern economies as a “dual shock”.

Last week, West Texas Intermediate (WTI) oil, the US benchmark for the commodity, entered negative price territory for the first time in history, economically impacting Gulf oil producers yet again, albeit in a lesser, but third shock.

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WNU Editor: All of the Gulf states are facing the same crisis, their financial revenue streams have collapsed .... Saudi Arabia blows through foreign reserves as budget woes mount (Al Jazeera). And with oil producers now producing 30 to 40 million barrels per day that the world does not need, these price and economic shocks are going to continue for a long time. My prediction. Stability in oil prices will only occur when the pandemic is over, and the global economy recovers. At best .... I see this only happening late 2021 or even 2022. Can these Gulf rulers survive until then? We shall see.

The Arab Gulf Alliance Is On The Verge Of Breaking Up And Threatening Some Of The World's Largest Oil Fields

Fractures In Arab Gulf Alliance A Greater Threat To Oil Security Than Islamic State -- Andrew Critchlow, The Telegraph

Break up of the Gulf Co-operation Council could threaten world's largest oil fields as Saudi Arabia and Qatar lock horns over alleged support for Islamists.

In 1981 six Arab monarchies, which today control about a fifth of the world’s oil supply, formed the Gulf Co-operation Council (GCC).

As the war between Iraq and Iran intensified, the Sunni Arab sheikhdoms of the Gulf peninsula - Saudi Arabia, Oman, United Arab Emirates (UAE), Kuwait, Bahrain and Qatar - originally came together in theory to form a Middle Eastern version of the European Union. Although the group has no formal political charter like the EU, it still provides the only official forum where all six leaders of these oil-rich countries can sit down together to debate and agree on mutually beneficial policies in the region.

But the rise of Islamic extremism across the Middle East, America’s growing willingness to deal with Iran and lingering leadership succession issues amongst member states are now unpicking the ties that have bound the GCC together in a tectonic shift that could have profound implications for the security of the world’s largest oil fields.

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My Comment: After living for decades under a certain political status quo .... the old despots and alliances are dying away. With groups like ISIS on the horizon and gathering strength .... one can only wonder (and worry) on what will be coming out of this mess.

White House Cancels President Obama's Summit With Gulf Cooperation Council Leaders

Heads of States of the Gulf Cooperation Council (Reuters)

U.S. Cancels Summit With Divided Group of Gulf Nations -- Wall Street Journal

Obama Plans to Meet With Saudi King in Riyadh Next Week

The White House canceled plans for summit this month between President Barack Obama and Persian Gulf monarchs in Riyadh because of splits between Washington's closest allies in the region.

WASHINGTON—The White House canceled plans for a summit this month between President Barack Obama and Persian Gulf monarchs in Riyadh because of splits between Washington’s closest allies in the region, according to diplomats briefed on the decision.

The strains that scuttled the meeting with leaders of the Gulf Cooperation Council countries—Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Oman, and Kuwait—underscored the mounting challenges Washington faces in trying to contain the Middle East’s spiraling political turmoil, these officials said.

Mr. Obama is still scheduled to meet face-to-face with Saudi Arabia’s King Abdullah in Riyadh late next week at the end of a trip largely focused on Europe and the crisis in Ukraine.

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Update #1: US nixes Persian Gulf summit amid divisions among allies -- RT
Update #2: U.S. drops bid to arrange Obama summit with divided Gulf states -- Reuters

My Comment: The U.S. has had a close alliance with Saudi Arabia and the Gulf monarchies for decades. It is quite something to see this relationship now falling apart .... especially since unity is now needed to confront Iran, the near civil war situation in Iraq, and the civil war in Syria.

Gulf Arab States To Unify Their Military Commands To Counter Growing Iranian Interference

Dignitaries from the six Gulf states gathered for a summit in Manama, Bahrain [Reuters]

GCC to Form Unified Military Command Amid Iran ‘Threats’ -- Bloomberg Businessweek

The Gulf Cooperation Council said it will form a unified military command structure at a time when Iran poses a “very serious” security threat to the Middle East.

The six-member group will coordinate air, land, and marine forces under one structure, Bahrain’s Foreign Minister Sheikh Khalid Bin Ahmed Al-Khalifa said today in a press conference after a meeting of GCC heads of state in Manama, the Bahraini capital. Iran’s nuclear program is a security threat to the region, he said.

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More News On the Gulf Cooperation Council Unifying Their Military Commands To Counter Growing Iranian Interference

Gulf Arabs decry Iran "interference" in region -- Reuters
GCC warns Iran 'stop interference' -- Gulf Daily News
GCC states slam Iran interference in region -- Al Jazeera
Stop meddling, Iran told -- Khalleej Times
Gulf council to unify members' militaries under a single command structure -- CNN
Bahrain to host GCC united military command -- Xinhuanet
GCC to set up unified military command -- The Peninsula

Gulf States Unity Plan On Hold

RIYADH: Gulf Cooperation Council (GCC) leaders and officials pose for a group picture on the sidelines of a summit meeting in the Saudi capital yesterday. Seen (from left) are Saudi Crown Prince Nayef bin Abdul Aziz, Kuwaiti Amir HH Sheikh Sabah Al-Ahmad Al-Sabah, Qatari Emir Sheikh Hamad bin Khalifa Al-Thani, Omani Deputy Prime Minister Fahd bin Mahmud Al-Said, Saudi King Abdullah bin Abdul Aziz, his Bahraini counterpart King Hamad bin Issa Al-Khalifa and Emirati Vice President and ruler of Dubai Sheikh Mohammed bin Rashid Al-Maktoum. – AFP

Saudi Arabia Seeks Union Of Monarchies In Region -- New York Times

MANAMA, Bahrain — Saudi Arabia pushed ahead Monday with efforts to forge a single federation with its five Persian Gulf neighbors as the conservative monarchy seeks to build a new bulwark against the waves of change sweeping the Middle East.

The Saudi foreign minister, Prince Saud al-Faisal, said after a meeting in Riyadh of the loosely allied, six-nation Gulf Cooperation Council that the group had distributed a draft plan for the union to its members’ foreign ministers to review so they could resolve any issues. “I am hoping that the six countries will unite in the next meeting,” he said.

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Update: Gulf unity plan on hold amid Iranian warning -- The Guardian

My Comment: It seems that some of these Arab states are getting cold feet.

Leaders Of The Gulf Cooperation Council To Explore Forming A Common Union

Gulf Leaders To Discuss EU-Style Union -- CNN

(CNN) -- The leaders of the Gulf Cooperation Council will hold a meeting Monday in Saudi Arabia to discuss transforming their six nations into a union, similar to the European Union.

The idea of the GCC nations to integrate into one entity -- and replace what exists now as simply a cooperative -- was first floated by Saudi Arabia in December. Monday's meeting in Riyadh will lay out the timetable for it.

The GCC is comprised of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.

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My Comment: Such a union will be more focused on security than economic .... more specifically .... countering the growing influence of Shiite Iran.

Why Are The Gulf States Expanding Their Combined Army

The GCC Is Expanding Its Army, But For What? -- Al JAzeera

Is the expanded force designed to defend against Iran or to prevent an Arab Spring in the oil rich Gulf?

A proposal to boost the Peninsula Shield, the Gulf Cooperation Council's combined military force, has been approved by its six member states, and could increase to include 100,000 troops before the end of the year, the director of a government linked think-tank in Kuwait has told Al Jazeera .

The Peninsula Shield currently consists of about 40,000 troops and has its permanent base in Saudi Arabia's Eastern Province. The proposed expansion would be a huge boost from the previous force's incarnation, whose numbers fluctuated between 5-10,000 troops during its existence.

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My Comment: With the decline of U.S. influence becoming more and more noticeable in the Middle East .... and Iran openly threatening its neighbors .... long standing security guarantees that have kept the peace in this part of the world are now under threat. I am just surprised that the GCC is putting a limit of 100,000 troops .... I expected more.

The Gulf Cooperation Council (GCC) Is Starting To Flex It's Military Muscle Against Iran

Standing Up to Iran: Gulf Alliance Flexes Its Muscles -- Time Magazine

Pilots winging over raging Libyan battlefields in Mirage and F-16 fighter jets. A convoy of troops and tanks rumbling to the aid of an embattled partner. Defiant words for a regional bully bent on meddling in domestic affairs.

These are just some of the hallmarks of the new-look Gulf Cooperation Council (GCC) — the bloc of six Arab nations that is shedding its image as a somnolent, oil-rich cartel and propelling itself forward in the role of hands-on military campaigner in the uprisings that are reshaping the region. It has already intervened — mainly with member Saudi Arabia's troops — in the rebellion in GCC compatriot Bahrain. This is the GCC 2.0 and the world, and most especially Iran, is watching.

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RIYADH ARRIVAL - U.S. Defense Secretary Robert M. Gates talks with Saudi Arabian Prince Khalid bin Sultan after arriving at King Khalid International Airport in Riyadh, Saudi Arabia, April 6, 2011. DOD photo by U.S. Air Force Master Sgt. Jerry Morrison

More News On Saudi Arabia/The Gulf States Military Alliance

Gulf between Arab-Iran rivals grows stormy -- AP

Gates, Saudi King Discuss Defense Relationship -- U.S. Department of Defense
US defence chief, Saudi king to discuss Mideast unrest -- Reuters
US defence secretary holds talks with Saudi king -- AFP
Gates In Saudi Arabia For Key Military Talks -- RTT News
US Defense Chief in Saudi Arabia to Discuss Mideast Unrest -- Voice of America
US Defence Secretary in Saudi Arabia for talks on uprisings -- M&C
Gates to discuss Arab upheaval with Saudi king -- MSNBC/AP
Gates in Saudi Arabia for talks with king -- UPI
Gates arrives in Saudi Arabia for delayed meeting with king -- Stars And Stripes

Effective leader of Arab world -- Gulf News (opinion)
The Gulf: The long and the short of it -- Gulf News (opinion)

The Gulf Cooperation Council (GCC) Member States