Amal A. Kandeel
Ms. Kandeel, an economist, is director of Pioneers International, a Virginia-based business and development advisory, working on and in the Middle East and North Africa — geostrategic and economic analysis and business intelligence, as well as international business, with the goal of advancing sustainable development.
The protracted crisis in Syria that has persisted for nearly three years is an indication of the high stakes involved in its potential outcomes for several regional and international actors whose goals and interests often do not converge. Sectarianism is widely viewed to be the primary factor underlying the positions of regional actors towards this crisis. If this is accurate, then it would be because, under current geopolitical conditions, certain parties to this crisis perceive that some of their foreign-policy interests would be served by particular religious sects once they are in power in Syria. However, concerns over issues that are much more concrete and pragmatic than religious zeal underpin such perceptions. After all, it was not long ago that some of the countries pitted against each other today in Syria were engaged in peaceful cooperation. What was different then were not the predominant sectarian or religious affiliations of their populations. The differences were in the dispositions of certain governments towards the objectives of regional coexistence and stability.
COUNTRY CONCERNS AND INTERESTS
Members of the Gulf Cooperation Council (GCC) are at the forefront of the Eastern camp, actively supporting anti-Assad groups in Syria. Within the GCC, however, distinct lines separate regimes that have chosen to invest heavily in specific outcomes in Syria and those who have not. Qatar, followed closely by Saudi Arabia, represents the former group. Yet even for these two countries, regime perspectives, interests and goals are not entirely congruent.
All the GCC member states share concerns about the intolerable human suffering that has resulted from the conflict in Syria. They also share a concern about how developments in Syria could impinge on regional dynamics that involve Iran, in particular, and how these ramifications could affect them. At the same time, the nature and level of individual country engagement in the developments surrounding the crisis in Syria have not been uniform across the GCC. The Qatari and Saudi regimes have been the most active in the Syrian arena. The leadership of the United Arab Emirates has shown much less interest in a particular outcome along specific religious lines, and its involvement has been much less purposeful, determined and pointed in the context of the crisis. Meanwhile, the Omani and Kuwaiti regimes have been among the most publicly disengaged. Oman has a long-standing cooperative relationship with Iran, unique in the GCC, and has maintained an almost neutral approach, humanitarian issues aside. Bahrain, too, keeps a low profile, but for the opposite reason. It perceives itself as the most vulnerable in the GCC to Iranian military aggression.1
The hydrocarbon sector is central to the economic and financial prosperity of all GCC countries, regardless of their varying degrees of fossil-fuel resource wealth. This sector remains the paramount source of government revenue and hard currency and an indispensable foundation for development, job creation, and overall economic security and stability. The centrality of this role requires governments to take into account and respond to changing regional as well as global strategic and economic factors and conditions that could affect this sector. This includes engagement in appropriate interactions with countries and organizations that are at present, or are projected to become, major players in world energy markets, whether as producers and exporters, or as consumers and importers. Forerunners among these are Asia, Europe and the United States, principal markets for GCC oil and natural gas.
In the increasingly interdependent international political, commercial and financial environment that extensive globalization has produced, the sustainability of the hydrocarbon sector's pivotal role in the GCC area's economy, financial stability and security has become connected to a complex strategic security matrix. Its components include, among other things, resource and market diversification, logistical operations and their security, and technology and its applications. Now more than ever before, the Levant is considered by the GCC to occupy an essential geostrategic place in this matrix. Perceptions and considerations of this strategic role have been implicitly reflected in the nature and level of involvement of GCC countries in the Syria crisis.
THE SYRIA LINK
Sectarianism has been viewed outside the GCC, particularly in Western countries, as not merely an integral component of the struggle in and over Syria, but even its precursor and driving force. However, since the populations of the GCC countries are not demographically identical in their religious composition,2 the involvement of these states, or lack of it, in Syria cannot be narrowly interpreted through a purely sectarian lens.
Key interests perceived by the GCC regimes to be at stake in the crisis in Syria span the military, economic and financial spheres, and are inevitably interdependent. Concerns about these issues have collectively been shaping GCC attitudes towards the crisis. These concerns have also been closely connected with perceptions of multiple threats from Iran. Regardless of the extent to which individual GCC countries believe these threats could materialize, such perceptions have risen dramatically with the escalation of the conflict in Syria since 2011.
When conflicts reach a stalemate, the benefits of deal making can be perceived as greater than the gains from a deadlock. Reports from the GCC region indicate that many among the intelligentsia do not rule out that the current state of the interconnected conflicts involving Iran could lead important players in the international community to make this type of assessment. From GCC perspectives, the complexity and danger of problematic regional and international disputes in which Iran is a key protagonist — the nuclear question, Syria, and Hezbollah's activities in Lebanon — make the continued lack of a resolution increasingly costly. It is feared that this could eventually propel Iran's major opponents onto a dramatic course of action. What this translates into, in terms of GCC national-security perceptions, is that military, and certain nonmilitary, options the international community may resort to vis-à-vis Iran would likely have damaging consequences for the GCC.3
In Arab eyes, including in the GCC area, the region has become a battleground for extended as well as redefined influence of new political and geostrategic determinants, including different political orders, not just alternative governments.4 These power contests have heightened concerns in GCC states over their area's stability, not least because of Iran's role as a principal player in major regional power struggles. Syria, with its current regional and extra-regional alliances, is perceived to be integral to the dynamics of these conflicts. The radical power shift in Iraq since 2003 has heightened such threat perceptions in the GCC. Iran's loss of its Syrian ally after the historic rise of Shia-based power in Iraq would reverse a momentous geostrategic gain for Iran. Its leaders are unlikely to accede to this loss, unless they were absolutely forced to — or an extremely appealing deal were put on the table.
Consequently, despite the divergence between preferred GCC and Iranian outcomes in Syria, GCC perceptions of national-security threats from Iran also increase, the more pressure Iran comes under in the conflict in Syria. Iran resorts not only to its nuclear file to counter these pressures but, additionally, to direct threats against GCC states. The Iranian regime has, in fact, incorporated into its security equation the stability and security of the GCC area.
GCC countries therefore have real concerns about their area's military security in any scenario in which the United States or Israel mishandles Iran's nuclear file. They are concerned about Iran's possible miscalculations, too, in dealing with its opponents on this issue. Perceptions of the threat of Iranian military retaliation against the GCC exist, even in a scenario in which Israeli forces alone attack Iranian nuclear facilities, without the participation of U.S. military forces from bases in the area.5
ECONOMIC AND FINANCIAL ISSUES
The upheaval in Syria can have consequences for GCC national interests, not only because of the value of stable cooperative economic and other relations with the Levant, but also indirectly because of the potential implications of the Syrian-Iranian alliance on broader GCC national-security concerns.
Provided the political will exists, Iran's involvement in a number of interlinked conflicts that are of major international concern allows its regime considerable bargaining leverage vis-à-vis Europe and the United States. Recognition of this factor has raised concerns in GCC states that the outcome of the crisis in Syria could get entirely out of their control. Iran's potential bargaining power also validates GCC states' perceptions of the threat to fundamental GCC economic and financial interests if Iran pulls the right strings to obtain international concessions, including reducing or lifting sanctions on its hydrocarbon sector. Another piece of a potential bargain could include preserving Iran's influence in Syria, which would indirectly support Iran's energy sector. There have already been indications that this approach might well be of interest to the Iranian regime.
International oil and natural-gas prices would fall significantly if Iran's hydrocarbon sector were allowed to become fully operational. The reduced price levels would be a favorable development for importing countries — a group the GCC is obviously not a part of. A problem with this development, however, would be the dire regional and global consequences of financially shoring up an Iranian regime characterized by an extremist disposition and an intense hostility towards basic human rights.
The U.S. government's often confused approaches towards Arab revolutions since late 2010 have been disconcerting for large segments of Arab populations, not just their governments. Not a single Arab person with whom I have spoken in the last three years — academics, military officials, students, drivers, lawyers, engineers, doctors — has expressed confidence in U.S. government intentions toward Arab societies in general, or trusted that the United States has his or her country's interests in mind. The possibility that the United States would pursue policies detrimental to Arab interests is not ruled out in any Arab society.6 The involvement of certain GCC governments in the Syrian struggle has in part evolved over time into a purposeful effort to undercut Iran's ability to strike a bargain with the United States to reach a deal that would be unfavorable to GCC interests.
Iran's regime and Hezbollah have repeatedly threatened to retaliate militarily against GCC countries if the United States or Israel attacks Iran. They have warned that none of the GCC's hydrocarbon production, refining, and trade infrastructure would be off limits.7
If this threat materialized, it would deal the global economy a massive shock. Would such a threat be taken seriously? Its fallout would be sufficiently cataclysmic to deter even the Iranian government from following through with it. Yet it would still be naive to assume that all parties to a conflict necessarily make compatible calculations. The question therefore may be how a leadership should treat a risk that has possible drastic consequences — despite an ostensibly relatively low probability of occurrence — compared to a risk that has fewer severe potential implications but is highly likely. A pragmatic answer would have to take a number of factors into consideration. These include the decision makers' threshold of risk tolerance (which varies according to contexts), the estimated costs of the potential adverse consequences, the menu of mitigation options, and the type, magnitude and availability of the resources necessary to implement them. The last set of factors is ultimately decisive. The GCC is generally able to put risk-management strategies and action plans high on its agenda. And it takes the low-probability threat seriously.
Since rolling back an Iranian aggression against GCC territory would inevitably require additional military operations, any such intervention would, at least initially, compound the impact of Iranian hostilities on world energy markets. Concerns exist in the GCC that, if pushed too far, the Iranian regime could very well gamble that the international community would not go down the path of counteraggression. Even if the assumption turned out to be mistaken and "corrective military action" were carried out, global markets would still suffer severely from the consequences of Iran's military operations before any international response ensued, facilities and infrastructure were repaired, and conditions were generally brought back to normal.
Although the Iranian threat to GCC territory has been publicly linked only to a potential U.S./Israeli strike on Iran, this is not necessarily the only reason for such a potential attack. The high stakes for Iran in the crisis in Syria make the direction and outcome of the conflict there another possible trigger for such aggression. It would be an error to presume that Iran would not retaliate against GCC interests if the pressures on the Iranian regime signaled the loss of its influence in Syria. Moreover, turbulence in the Middle East region since 2011 has proven to be highly contagious.
GCC members' concerns about Iran's military threat are fueled further by perceptions that Western governments — particularly the U.S. administration — exclude them from decisions on how to deal with Iran, including assessments of the military option to which the GCC region is the most vulnerable.8
Security of the Strait of Hormuz
According to the U.S. Energy Information Administration, about one-fifth of globally traded oil supplies passed through the Strait of Hormuz in 2011. The strait accounted for an even higher share of all seaborne oil shipments. No other transit point is more crucial for the uninterrupted global flow of oil and natural gas.9 In addition to its centrality to the stability of international energy markets and, consequently, to the global economy, this waterway is of vital importance to the Arab Gulf area. Three GCC countries as well as Iraq have no access to any other maritime commercial passage, and all GCC eastbound seaborne trade must pass through this strait. Even though Saudi Arabia's reliance on it is not absolute, the strait's security is nonetheless crucial for Saudi trade bound for Asia.
As with Iran's threat to retaliate against the GCC for a U.S. or Israeli attack, its threat to close the Strait of Hormuz is also arguably not highly likely to materialize. However, direct Iranian disruption of commercial shipping through the strait is not the only risk to trade stability. Any military operations in the Arab/Persian Gulf would disrupt traffic, whether or not Iran attempted to block it.
Aside from the detrimental international implications of this scenario, it is deeply troubling for the GCC countries.Saudi Arabia and the UAE have been pursuing plans to reduce the potential impact of such a conflict scenario on their hydrocarbon sectors. They have undertaken large investments to establish alternative fossil-fuel export routes in an attempt to at least partially offset their risks if war breaks out in their neighborhood. In addition, many of the region's non-hydrocarbon economic sectors would be incapacitated to varying degrees if trade through the strait were impeded for even a short time.
The hydrocarbon exports of the GCC area are primarily eastbound. Asia is its largest continental market for oil and natural gas, with China and Japan topping the list of individual Asian buyers. In 2012, the GCC supplied Japan with over 75 percent and China with more than half of their oil needs. Overall, two-way trade between China and the GCC reached a peak in 2012, about $95 billion. More than one-half of this trade consisted of GCC fossil fuels and hydrocarbon-based products. The Asian continent, which accounts for about two-thirds of global demand for fertilizers, is the leading market for GCC exports of these products. Currently, the GCC region exports more than half its fertilizer output.10
A large percentage of Saudi Arabia's hydrocarbon exports go to Canada, the United States and Europe. Saudi Arabia's top three markets for these products are the United States, Japan and China. Europe is also an important consumer of liquefied natural gas (LNG) from Qatar.
Saudi Arabia's second-largest hydrocarbon shipping terminal is located in the westernmost section of the kingdom, on the Red Sea coast. However, it is not being used to full capacity. The kingdom's two principal eastern shipping terminals still account for more than three-quarters of its export trade.11
When scenarios of military conflict in the Arab/Persian Gulf area are assessed, the overall logistical constraints on hydrocarbon transportation from the GCC must be taken into consideration. Fortunately, based on geographical location, the six GCC countries do not share the same level of risk exposure to the potential implications of instability in the Strait of Hormuz. Kuwait and Qatar are the most vulnerable to this risk, having no alternative shipping routes. Saudi Arabia is in a better position; it has the western terminal, with a loading capacity high enough to compensate for some level of reduced shipping from the eastern ports. However, this Red Sea terminal predominantly serves exports to the western hemisphere; using it for shipping to East Asia would be significantly costlier than shipping through the Strait of Hormuz. Geographically, a southbound or southeast-bound Saudi pipeline bypassing the Strait of Hormuz would have to pass through UAE or Omani territory. These two GCC countries are the least exposed to the operational risks associated with the strait. In 2012, the UAE, which has been trying to keep ahead of potential geostrategic risk developments, completed a new oil-export terminal that clears far from the strait.12 As for Oman, in addition to its cooperative relations with Iran, insecurity and instability in the Strait of Hormuz area pose little threat. Its only export terminal is at Mina al-Fahal near Muscat, completely outside the strait's immediate zone.
The varying exposure levels of GCC members to the risks of a closure of the Strait of Hormuz shed some light on the role that Syria could play for certain GCC countries. Qatar and Saudi Arabia have had long-standing plans to construct a pipeline to the Mediterranean Sea, through Jordan and Syria, to serve national-security objectives. The conduit would provide a higher degree of logistical diversification and lower export risk. Hopes for this strategic interdependence with the Levant, however, were dashed in 2010, when the Syrian regime declined to cooperate with its Saudi and Qatari counterparts on this project. Rubbing salt into the wound, Bashar al-Assad's government sealed a deal with the Iranian and Iraqi governments for a similar project that would export Iranian natural gas to Europe.13 This was a particular blow to Qatar's aspirations, given the centrality of the European markets to its LNG exports and expansion plans. Information openly accessible is insufficient to clarify the extent to which Saudi Arabia would have benefited from the proposed conduit. It cannot be fully determined what it perceives to be at stake if this project does not eventually materialize. It remains the case, however, that Saudi Arabia does have alternative shipping outlets, while Qatar has none.
No recent regional event has been as unwelcome in GCC policymaking circles as the power shift in Iraq to its Shia majority. The shift occurred when the thawing relations between GCC states and Iran during the presidencies of Ali Akbar Hashemi Rafsanjani (1989-97) and Mohammad Khatami (1997-2005) collapsed under Mahmoud Ahmadinejad's rule. The restructuring of political power in Iraq and its regional implications have revived GCC threat perceptions that are linked to the nature of Syria's regional alliances. The uprising in Syria presented an opportunity for GCC states to influence changes perceived to be favorable to their economic and national-security interests and goals.
The geostrategic value of an alliance with a regime in Syria is well recognized in the GCC. Whereas Iraq could support the strategic positioning of Iranian military forces vis-à-vis the GCC, Syria can offer an indispensable seaport for Iranian trade, away from the problematic Arab/Persian Gulf. However, for this reason and others discussed earlier, GCC countries most dependent on the common waterway with Iran would rather secure that alternative route to the Mediterranean Sea for their own advantage.
The European Market
There is no country in the GCC more dependent than Qatar on the European market for hydrocarbon exports and revenues. In terms of import share, Europe ranks second among Qatar's LNG customers.14 Substantial real economic and business interests are involved in the desire for a back-up alternative to the Strait of Hormuz. Ensuring logistical security and stability for hydrocarbon exports is an important objective. Yet its highest value stems from the arguably remote probability of a crisis in the Arab Gulf region. How hydrocarbon exports could circumvent the strait is not a concern that dominates the normal course of the day in every Qatari home. However, increasing Qatar's share of the European market is a national objective with extremely lucrative financial prospects. The straightforward commercial and economic purposes behind the desire for a Mediterranean export terminal could surpass motivations driven by risk perceptions of a potential subregional military conflict.
A Qatari pipeline through West Asia to the Mediterranean would dramatically reduce the costs of Qatari exports and increase competitiveness over natural gas from Russia. Moscow long held the largest market share in Europe (over a quarter) until Norway took the lead for the first time in 2012.15 Qatar's interest in an expanded market share in Europe sits well with European governments' interest in diversifying their sources of supply. In fact, since neither Qatar nor Iran nor Norway are the exclusive sources available to Europe, and as new discoveries are made in neighboring Mediterranean countries, Qatar's incentive to secure a direct conduit through the Levant is expected to remain strong.
GCC countries' concerns about the stability of their welfare systems and governments are inextricably linked to their perceived economic and financial security interests. These boil down to maintaining the central place their hydrocarbon sector occupies in global energy markets and the world economy. Perceptions of sectarian-driven regional threats are never an absolute constant in their national-security matrixes; they ebb and flow based on other variable and complex geostrategic factors. The crisis in Syria erupted at a time when such perceptions had been elevated by the political outcome of the 2003 invasion of Iraq. Good relations with Syria have always been considered a cornerstone for safeguarding GCC interests, although such friendly relations have not always been achievable. Perhaps more than at any previous time, GCC countries now want to ensure that the eventual outcome in Syria would contribute favorably to the preservation of their vital national-security interests, military as well as economic. Perceptions of heightened threat from Iran since 2003 have fueled this concern. Deepening it further has been the lack of resolution to Iran's contentious regional disputes, which pull together multiple international players in complex ways that are unsettling for the GCC.
1 "The UAE Supports Non-Sectarian Change in Syria: FM," Daily Star, December 26, 2012, at http://www.dailystar.com.lb/News/Middle-East/2012/Dec-26/199854-uae-sup…; and International Crisis Group, Popular Protests in North Africa and the Middle East (III): The Bahrain Revolt, 6 April 2011, http://www.crisisgroup.org/~/media/Files/Middle%20East%20North%20Africa….
2 Minority Rights Group International, World Directory of Minorities and Indigenous Peoples, various issues.
3 A conference organized by the Bahraini Center for Strategic, International and Energy Studies, held in Manama, November 4-5, 2012, brought together Arab and non-Arab speakers and academics to examine and discuss this issue at length. See Alsaied Zuhrah, "Al-sira' wa al-tanafus fi al-khalij al-'arabi [Struggle and Competition in the Arab Gulf]," November 22, 2012, at http://www.akhbar-alkhaleej.com/12662/article/61112.html.
4 Maged Munir, "Al-khalij yakhsha yawm al-qiyamah: al-harb al-marfudhah 'ala Iran [The Gulf Fears Doomsday: The Objectionable War against Iran]," Al-Ahram Al-Raqami, February 4, 2012, at http://digital.ahram.org.eg/articles.aspx?Serial=791262&eid=1159.
5 Munir, "Al-khalij yakhsha yawm al-qiyamah."
6 University of Maryland with Zogby International, 2010 Annual Arab Public Opinion Survey, conducted June-July 2010 in Egypt, Jordan, Lebanon, Morocco, Saudi Arabia (KSA) and UAE, at http://www.brookings.edu/~/media/research/files/reports/2010/8/05%20ara…; Pew Research Center, "Arab Spring Fails to Improve U.S. Image," May 17, 2011, at http://www.pewglobal.org/2011/05/17/arab-spring-fails-to-improve-us-ima…; and Arab Center for Research and Policy Studies, "The ACRPS Announces the Results of the 2012/2013 Arab Opinion Index," June 13, 2013, at http://english.dohainstitute.org/content/af5000b3-46c7-45bb-b431-28b2de….
7 Parisa Hafezi, "Iran Threatens to Hit Any Country Used to Attack its Soil," Reuters, February 5, 2012, at http://www.reuters.com/article/2012/02/05/us-iran-strike-enemies-idUSTR…; and Ali Akbar Dareini, "Iran Threatens Attacks on U.S. Bases in Event of War, Associated Press, September 23, 2012, at http://www.heraldtribune.com/article/20120923/WIRE/120929854.
8 Alsaied Zuhrah, "Alsira' wa Altanafus fi Alkhaleej Alarabi," [Struggle and Competition in the Arab Gulf], November 22, 2012, http://www.akhbar-alkhaleej.com/12662/article/61112.html.
9 U.S. Department of Energy, U.S. Energy Information Administration (EIA), World Oil Transit Checkpoints, August 22, 2012, at http://www.eia.gov/countries/analysisbriefs/World_Oil_Transit_Chokepoin….
10 "Japan's Imports from the GCC Surges," AMEinfo, May 9, 2012, at http://www.ameinfo.com/japans-imports-gcc-surges-299817); "China to Boost GCC Oil Imports," Emirates 24/7, September 17, 2013, at http://www.emirates247.com/business/energy/china-to-boost-gcc-oil-impor…; and "Asia Remains GCC's Largest Fertilizer Market in 2012," Zawya, 19 September 2013, at http://www.zawya.com/story/Asia_remains_GCCs_largest_fertiliser_market_….
11 EIA, "Saudi Arabia," February 26, 2013, at http://www.eia.gov/countries/cab.cfm?fips=SA.
12 EIA, "Analysis Briefs: United Arab Emirates," January 3, 2013, at http://www.eia.gov/countries/analysisbriefs/UAE/uae.pdf.
13 EIA, "Analysis Briefs: Syria," August 2011, at http://www.eia.gov/cabs/Syria/pdf.pdf; and Milad Jokar, "Is It Still about Assad's Fall?" Huffington Post, December 10, 2012, at http://www.huffingtonpost.com/milad-jokar/syria-is-it-still-about-a_b_2….
14 It shares with Iran the world's largest natural-gas field (North Dome/South Pars). Qatar makes use of the field, but sanctions have left Iran unable to exploit it.
15 "Norway Overtakes Russia as EU's Biggest Gas Supplier," Euractiv, June 25, 2013, at http://www.euractiv.com/energy/norway-overtakes-russia-biggest-news-528….