What is Qatar doing?
On the 5th, the United Arab Emirates announced that it would sever diplomatic relations with Qatar, accusing the latter of undermining regional security. At present, seven countries including the United Arab Emirates, Saudi Arabia, Bahrain, Egypt, Yemen, Libya, and the Maldives have announced that they will sever diplomatic relations with Qatar.
1. Saudi Arabia: Multinational coalition ends cooperation with Qatar
Saudi National News Agency: A statement was issued in the early morning of June 5, local time. The statement stated that because Qatar has openly or covertly carried out activities to interfere in the internal affairs of Saudi Arabia and other members of the GCC over the past many years, and has supported the Muslim Brotherhood and al-Qaeda, Saudi Arabia has decided to sever diplomatic relations with terrorist groups including terrorist organizations and extremist organizations. The multinational coalition led by Saudi Arabia and whose main task is to support the Hadi government in Yemen also announced the end of all cooperation with Qatar.
2. Bahrain: Qatar interferes in its internal affairs and recalls diplomats stationed in Qatar
Bahrain’s national news agency issued a statement in the early morning of June 5, local time, announcing that Bahrain would sever diplomatic relations with Qatar, which is also a member of the GCC. The statement stated that in view of Qatar’s long-term persistence in “shaking the stability and security of Bahrain” and “interfering in Bahrain’s internal affairs”, while inciting public opinion to intensify tensions, supporting terrorist organizations, and financing Iran-related armed groups to create unrest in Bahrain, it is a serious matter. In violation of international law and the principle of good neighborliness, Bahrain decided to sever diplomatic relations with Qatar.
The Bahrain government said it would recall its diplomats in Qatar and require Qatari diplomats in Pakistan to leave the country within 48 hours.
3. Egypt’s Ministry of Foreign Affairs: Qatar supports terrorist activities and announces the severing of diplomatic relations with Qatar
According to Xinhua News Agency: According to foreign reports, the Egyptian Ministry of Foreign Affairs said on the 5th that it announced the severance of diplomatic relations with Qatar in view of Qatar’s support for terrorist activities.
4. The United Arab Emirates announced that it will sever diplomatic relations with Qatar! Accusing the latter of undermining regional security
According to the UAE National News Agency, the UAE announced on the 5th that it would sever diplomatic relations with Qatar, accusing the latter of undermining regional security.
Short-term oil price increases have expanded rapidly
As soon as the news came out, Brent crude oil rose by more than 1.5% to US$50.72 per barrel. WTI crude oil rose nearly 1.6% to US$48.40 per barrel.
Judging from the map, Qatar is a small country. Why did the price of crude oil surge when the news came out today?
Let’s look at geopolitics. Qatar’s geographical location is very critical. The short-term conflict between Saudi Arabia and Qatar really broke out, which will have a big impact on the crude oil and natural gas markets. Qatar’s diplomacy is fundamentally different from Saudi Arabia’s. It is not based on ethnicity, religion or ideology. It is all based on pragmatism and maintains good diplomatic relations with Iran and Syria.
Therefore, judging from the trend of international oil prices, there was a slight increase when the news was announced, and then the increase expanded rapidly. In the short term, oil prices may be boosted by this and have an upward trend.
Is the OPEC production reduction agreement about to collapse?
As an important oil-producing region, this incident in the Middle East has triggered investors to pay close attention to the crude oil market and the OPEC production reduction agreement.
American financial blog Zero Hedge commented that the incident further increased the outside world’s doubts about the stability of OPEC.
Although historically, turmoil in the Middle East usually increases the risk premium of crude oil, given the challenges to the unity of OPEC members, they will also face great uncertainty in the implementation of production cuts, which will theoretically put downward pressure on oil prices. .
The historical impact of the Middle East crisis on oil prices:
Crude oil output of OPEC countries:
Summary: 2017 is destined to be an extraordinary time, the second year of the economic crisis, the second year of the resolution of the Syrian crisis, the second year of the change of heads of state in European countries, and the second year of Trump’s election. We are already halfway through 2017, where will the price of crude oil go? In the end, it still depends on how to solve the oversupply problem!
In the short term, there is a high possibility that crude oil and natural gas will soar slightly. Due to concerns that conflicts will disrupt crude oil and other transportation in the Persian Gulf, causing crude oil supply problems, the polyester market may rise, driven by crude oil; However, the balance between global supply and demandIn the case of severe surplus, as the news is digested, the entire price will gradually fall back, and oil prices will return to the dominance of supply and demand.
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