Qatari Port Sees Opportunity in Embargo

Hamad Port (file image)

By The Maritime Executive 2017-06-16 10:54:40

The Saudi-led embargo on Qatar means that container lines can no longer use deepwater terminals in the UAE for Qatari transshipment cargo, causing disruption to supply chains and forcing carriers to reroute cargo through Omani ports on the Arabian Sea. But the suspension of transshipment at the UAE’s giant Jebel Ali and Khalifa ports may also be an opportunity for Qatar's biggest seaport, Hamad Port. 

"It's a blessing in disguise," a Hamad Port official told Reuters Wednesday. "We're looking at signing agreements with shipping companies that can improve direct services instead of having to come through Jebel Ali." The port has already added four new services, two from India and two feeder routes from Oman. And the port's operations manager suggested that more deals may be in the works soon. With all of the new trade lanes, officials say that business is already back up to normal levels despite the embargo. 

Negotiations may begin soon

An official with knowledge of the diplomatic situation told Bloomberg on Thursday that Saudi and UAE leaders will relay a full list of demands to mediators over the weekend – a starting point for negotiations between the two sides. Qatar contends that Saudi Arabia's public statements, which call for the suspension of Qatari support for Hamas and Hezbollah and an end to Qatar's warming relations with Iran, are not specific enough to form a basis for discussion. Once the detailed demands are delivered, officials say, the crisis may be resolved in short order. 

"I am sure this storm will pass peacefully to the benefit of the Gulf Cooperation Council," said Kuwaiti Sheikh Salem al-Ali al-Sabah, speaking to Al-Seyassah. al-Sabah credited the Emir of Kuwait for his efforts to mediate between the parties. 

U.S. signs $12 billion arms deal with Qatar

In social media posts, U.S. President Donald Trump has expressed support for the Saudi-led sanctions, and on Friday he accused Qatar of sponsoring terrorism "at a very high level." However, despite Trump's apparent concerns, his Department of Defense finalized a landmark $12 billion arms deal with Qatar on Thursday. The agreement, signed by Secretary of Defense Jim Mattis at a meeting with Qatari officials in Washington, will allow Boeing to sell the strategically important ally a total of up to 36 F-15 fighter jets. The Pentagon suggests that the sale will increase interoperability between Qatari and American air units. 

Qatar hosts the largest and busiest American air base in the Middle East, Al Udeid, which is the main launching point for the air campaign against Islamic State. Shortly after the Saudi-led alliance denounced Qatar for supporting terrorist groups, the U.S. Department of Defense thanked Qatar for its "enduring commitment to regional security”; Secretary Mattis has refrained from taking sides, describing the situation as "very complex." 

“The mixed signals from the U.S. aren’t productive when it comes to negotiating a settlement," said Allison Wood, an analyst with Control Risks in Dubai, speaking to Bloomberg. “The different signals will allow the various parties to ally themselves with the individuals and departments that support their side within the Trump administration."

There is already evidence that the nations involved are selectively picking the American messaging that best supports their positions. In conversation with Reuters on Thursday, a Qatari diplomat suggested that the newly signed arms deal is a sign of "deep U.S. support." He asserted that the agreement "is of course proof that U.S. institutions are with us” despite any “political changes.”