For those who don't spend significant parts of their waking day with the news on, there is a situation developing in the Middle East. Something with a much greater potential to destabilize the area than Islamic state or the fighting in Syria.
Qatar is one of the smallest but richest of the gulf states, it's a tiny nation perched on a peninsula that reaches out from Saudi Arabia into the gulf. It's an oil and gas exporting nation but it's rulers decided many years ago to diversify away from oil and have invested in finance, real estate and many other global businesses so while it has significant oil and gas reserves (20 - 30 years worth) it isn't dependant on those revenues for it's economy as are some of the surrounding nations.
In this respect it was well ahead of it's neighbours who are in some cases only just beginning to try and move away from purely oil based economies.
Historically, Qatar, which had been a British protectorate since 1916 after the fall of the Ottoman empire, declared it's independence in 1971. It has long standing verbal disagreements with it's neighbours, in particular Saudi Arabia but has worked with them, for example during the two wars against Saddam. The US has a number of bases in the country and it houses the US central command which is responsible for activities in Iraq, Afghanistan and Syria. Aircraft based here provide air support to troops in those regions and some 11,000 US troops are based in the country along with a small (but apparently rapidly growing) contingent of troops from Turkey, a nation Qatar is strongly allied with.
Al Jazeera is based here and the country is notably more liberal than the surrounding states though it is not a democracy, however it is still bound by tradition though this is changing as new generations test the freedoms they now have and are no longer restricted by customs and traditions that their parents follow.
Anyway, enough of the pocket history.
Qatar is currently under blockade. Saudi Arabia, Egypt, Libya, the UAE, Bahrain and the Yemen, along with the Maldives for some reason, have declared a blockade of Qatar, this blockade extends to air, land and sea traffic from those nations into or out of Qatar. Which has cut the land route into Qatar across the Saudi border and also affects travel by cargo ships as these tend to make multiple stops at major ports as they travel around the region. Though I'm not aware of any ships being actually stopped.
Air travel is also affected unless it comes via Iraq since the main routes to the country come across Saudi Arabia.
The official reason behind the blockade is in response to the Qatari support for terrorist organisations such as Hamas and the Muslim brotherhood, which coming from the Saudi's is a serious case of the Pot calling the Kettle black. Unofficially there are reports that the ruler of Qatar has been saying nice things about Israel and Iran recently, but while the Saudi's may have a serious hate on for at least one of those nations that seems a bit unlikely as the reason behind such a massive mobilisation and disruption of the region.
While I can't see any of the blockading nations trying to stop US military flights or ships heading to bases in Qatar, those bases and many thousands of soldiers use local support and resources which are being hit by the blockade. Which makes the US lack of response odd, until you remember that we are talking about Trump here and more than that, we have just watched both the US (the primary military in the area) and Britain (the old overlord and still respected as a diplomatic power) receive some hefty bribes disguised as arms deals.
May walked off with £3 billion in her hands and Trump with a somewhat larger $110 billion in an oil barrel in the boot of his car.
Now arms deals in the region are nothing new, after all the UK is STILL selling weapons and military technology to the Saudi's who are dropping British bombs on Yemeni schools and hospitals. But the timing of these two is interesting when taken together with other events. And when you consider that not long after these generous bribes, sorry arms deals were done, the Saudi's have suddenly blockaded a small and troublesome neighbour and the big powers have been utterly silent...
Call me paranoid, people do, but it's almost as if May and Trump had their silence and support bought with those deals not so long ago.
Which would mean there is more going on here than just a regional spat.
Qatar is here in case you didn't know.
So what IS going on, get the steel helmets out ladies and gentlemen, it's conspiracy theory time. Don't use tin foil, that doesn't stop the latest mind control satellites.
OK what has happened recently and I'm looking at Saudi Arabia here since they are in the middle of this whole thing.
Well in April 2016 the Saudi's publicly announced a new idea, Vision 2030, to transform Saudi Arabia, an ambitious economic plan intended to confirm the kingdom's status as "the heart of the Arab and Islamic worlds, the investment power house, and the hub connecting three continents."
A plan to put Saudi Arabia at the heart of the middle east, or to put it another way, in control of the middle east. A plan that had about as many numbers and hard facts as the recent Tory manifesto and which has not been expanded on since then, nor have any more details been revealed.
Public statements have been made about a part sale of Aramco (the state oil producer) and a transition away from purely oil based revenues and into a far more diverse economy, investment in alternative technologies etc. The crown prince, who is behind the whole Vision 2030 idea said:
"We are not dependent solely on oil for our energy needs, we are determined to diversify the capabilities of our economy... As such, we will transform Saudi Aramco from an oil producing company into a global industrial conglomerate."
So a massive transformative plan, but how to pay for such a thing.
Hey, Saudi Arabia, they have loads of oil. Right?
How much Oil is under the ground is determined by experts, careful study of the geology, test drilling and by educated guesses. It is listed in several ways, all of which use units of billions of barrels of crude.
Proved reserves, the most conservative and prudent measure of calculating the available oil, are those which are estimated to exist, and are technically and economically recoverable, with a probability of at least 90 percent. Or to pt it another way, proven reserves are the stuff that can be recovered using current technology and cheaply enough to make a profit at expected prices.
Saudi Arabia has proven reserves of 266 billion barrels according to reports from Aramco.
But that is by no means proven in the literal term of the word.
The big oil producer in Saudi Arabia is Aramco, they are state owned and are the people responsible for producing the figures on oil reserves that are submitted to OPEC. Aramco was jointly owned by four U.S. oil companies (Exxon, Texaco, Socal and Mobil) up until the early 80s when they were bought out and the company became wholly owned by the House of Saud and the kingdom of Saudi Arabia.
In 1980 Aramco reported that the proven reserves of Saudi Arabia stood at 110 billion barrels, probable and possible reserves of 178 billion barrels and 248 billion barrels respectively.
In 1982 Aramco stopped producing detailed reports on oil reserves field by field and instead produced a single figure, the national proven reserve, of 178 billion barrels. Much higher than the last reported value from when the company was jointly owned by the four US oil companies but just within the probable estimate and as such, acceptable.
Then in 1988/9 the reported proven reserve jumped up to 265 billion barrels although no new oil fields had been found within the domain of the kingdom of Saudi Arabia.
This proven reserve is calculated based on field-by-field production profiles and reserve estimates produced by Aramco officials, these numbers are state secrets known by only a small group of insiders so there is no way of verifying them.
However Saudi Arabia has been pumping oil at the rate of 10 million barrels a day on average for almost thirty years since the revised figure popped up, 365 days a year, for almost 30 years. Roughly 90 to 100 billion barrels of oil give or take a few oil tankers worth.
And yet the proven reserve hasn't budged in all that time.
The above chart shows two lines, the blue line which is the official proven reserve figures as published by Aramco each year, and the red line based on the stated reserves when Aramco was jointly owned by the four US corporations and modified by production since then.
The chart goes to 2005 becasue I found in in a book from that time but in the twelve years since then Saudi production will have used another 40 billion barrels of oil.
Now devils advocate here, technology has improved, you only have to look at the US and it's explosive growth of fracking to see that. So it is possible that the Saudi proven reserve has been increasing to counter the oil being taken out becasue more of the oil underground is becoming recoverable cheaply.
But since Aramco and the Saudi government keeps all it's calculations and numbers secret and only releases the same unchanging proven reserve value each year, we don't have any way of working the numbers for ourselves.
Saudi oil reserves could, and I stress this is COULD, be down to less than 50 billion barrels of high probability recoverable oil. It has several hundred billion barrels in harder to get places but with oil at around $50 a barrel it would cost far more to get the low probability oil reserves than it would sell for on the world market. Plus if Saudi Arabia's production falls or stops there are plenty of other countries with low probability oil reserves that they won't access until the price goes up meaning it becomes a horse race for the expensive oil once the price gets high enough.
10 million barrels a day, 3650 million barrels a year. 50 billion barrels isn't going to last long at that rate, but if the Saudi's cut back they lose a big chunk of their income.
But this is just conjecture, becasue the exact figures are a state secret, Saudi Arabia may have gotten access to some nice new technology that would allow them to access more of that hard to get oil. But in politics much as in life, governments tend to love releasing good news and hate releasing bad news.
Which to me means if they had such technology they would be singing about it from the rooftops, but they aren't, and the basic numbers used to calculate the oil reserves are still state secrets.
Absence of proof is not proof of absence, but to a cynical old paranoid like me, the fact that the Saudi's are hiding the real figures and aren't spreading the good news about new oil reserves, well, it doesn't bode well for the future of the kingdom of Saudi Arabia.
Between 2014 and 2016 the kingdom's debts increased 619%, a result of oil prices falling in part caused by the US net exporting onto the global gas market and due to high production and falling demand. Saudi national debt is currently at 10% of GDP, hardly a huge figure by British standards but remember, the UK has a massive and widespread economic base, Saudi Arabia is entirely based on a single commodity, oil, it has traditionally been a very wealthy nation well known for it's largess, generous public sector salaries, and subsidies on a range of goods and services.
Salaries and subsidies that were cut some years ago, and then suddenly, in April this year, restored along with bonus payments for soldiers on the Yemen border for example.
The price of oil hasn't increased, Saudi national income hasn't jumped, and yet it is suddenly acting as if it had no financial worries, as if it were strong, as if it is the power in the region.
The Saudi economy is running a new and significant deficit, that $110 billion bribe to Trump is going to become national debt, so why do it, unless the debt is only short term and soon to be forgotten.
There is to be a public sale of shares in Aramco, selling off part of the company, a company valued at £2 trillion, that's Trillion with a T. That would certainly solve a few problems, or would it?
Firstly the value is based on those proven reserves figures, the ones that have been the same for decades and that no one can actually verify becasue the data is a Saudi State secret. Secondly the Financial times estimated the value of the sale to be more accurately in the region of $1 trillion give or take a bit. The Sunday Times offered a similarly incredulous headline: "$2 trillion for Saudi oil? Forget it."
So if and it's a big IF, the deal goes ahead, it's only going to be a part of the company, at present people are talking about 5 - 10%. Given the Saudi economy was haemorrhaging $75 billion a year last year without that extra $113 billion in bribes, sorry arms deals, and including the extra cost of the fighting (or bombing since the fighting is fairly one sided) in the Yemen, oh and another $350 billion in bribes to the US over the next few years, how long will that money last.
The answer is not long.
If they make the $100 billion that will keep them afloat for what, a mere two years, less if the money is used to diversify into finances and investments which will bring in a future non oil based income. But investing returns money slowly, it works in the long term. They aren't going to see the sort of returns needed to actually keep the economy afloat for a decade and more. Even if they up and sell less than a controlling interest, up to 49% of the company AND they get it at the inflated price that's still less than a Trillion dollars, that money isn't going to last long when you are funding an entire nation.
So what does this mean for Saudi Arabia, Qatar and the entire middle east.
Well, in my view (take with cup of salt), Saudi Arabia is making one last throw of the dice.
For years it has been the big dog in the middle east, home to a global religion, oil powerhouse, courted by the world powers, UK prime ministers and US presidents have visited and grovelled. It has stood on the world stage and no one told it to go and sit in the cheap seats with everyone else.
Saudi rulers have had almost unimaginable wealth, their word has in some cases literally been the word of god and they have had their way in almost everything. The west has stood with them and against their old enemy Iran who sided with Russia anyway so was obviously evil (yes sarcasm, you need to ask by now).
The surrounding nations have mostly been not just friends and allies, but have accorded the house of Saud the position of ruler over them all, something that the Saudi's have gone to war to maintain in the Yemen. Those nations that refused to bow down to the Saudi's have generally been of the hated other half of the Islamic religion and allied with Iran, the west has obligingly rolled in every so often with tanks and bombs to give said enemies a good kicking.
But things are changing.
Islamic state and the new caliphate which would have united all of the Sunni middle east under the benevolent rule of the house of Saud as custodians of the Sunni world ran off and became it's own organisation and even turned on it's old masters to a degree.
Syria was not crushed and turned into another Libya, Russia stepped in, the West's bombing didn't topple Assad. Instead the US has been making nice to Iran and Syria looks likely to survive.
The west has traditionally been Saudi Arabia's best friend, and to a degree still is, to a degree. Publicly the US and Trump are bestest buds, but behind the scenes, not so much.
The world is moving steadily away from oil, has been for years, but it's getting to the point where oil demand is going to steadily drop, and oil prices with it. More bad news to a nation completely dependant on oil. Particularity if that oil supply is down to it's last 10-15 years
It seems to me that what we are seeing is a burst of glory combined with an attempt to claim control over most of the middle east and it's wealth, oil, gas, and finances for those nations whole have already diversified. Like, say Qatar.
The Saudi's are spending their oil money like water in order to appear stronger than they are, to bring people and nations under their sway by looking big and strong, hoping to be in control by the time the truth comes out. This blockade of Qatar is part of this, an attempt to force Qatar to join the Saudi alliance, under Saudi control, to bring it's wealth to all of the middle east (read Saudi Arabia).
There is a long term plan here, a sort of vision 2030, where Saudi Arabia is strong and powerful and the rest of the middle east either bows down to them or fears them. Where the wealth and resources of the middle east flow through Saudi hands and for the benefit of those same princes of Saud.
It seems to me that Saudi Arabia has left it far too late to move away from oil, it no longer has the time to do so, it's oil reserves have been dwindling and lied about for several decades now and are close to done even as the worldwide oil demand falls as well.
This is a nation looking at economic collapse, and the fall of the ruling house. Power, wealth, influence, all gone in as little as ten or fifteen years. And yet they have this neighbour, insanely wealthy little nation, small population, isolated, taxing them should help with the loss of oil revenues and they should be easy to bully, especially if the US has been bribed to stay out of it.
Saudi Arabia has been king of the middle eastern hill for decades, but that hill is made of sand and like all sand it is shifting, I think what we are seeing is the Saudi response, their sand castle is falling so they are trying to take everyone else's.
Risking war across the middle east with a last throw of the dice, survive as king of the middle east or fall as beggars in a broken nation. Qatar happens to have a nice city, lots of money, an easy target for the Saudi's gamble for survival. Which is unfortunate for Qatar becasue as the Saudi's become more desperate they will do increasingly desperate things to survive, unless the world steps in to deal with the problem. Saudi Arabia is dying as far as I can see, they are trying to hide it but they are going down and most likely in flames.
The US under trump has been well bribed to turn a blind eye, the other nations involved are all waiting for their share of the spoils as good little supporters of the Saudi's. Who will stand with Qatar.
Only the future will tell but there are many in the region who are no friends of the Saudi's, Iraq and Iran are both near by and have access by sea, but this risks further polarising the region, cutting it in two between the Saudi Sphere and the Anti Saudi sphere, Turkey has already started to send military reinforcements which can also arrive by sea. Will Bahrain or the Saudi's try to block Turkish ships and risk attacking a NATO member. What about Putin, how many fingers does he plan to have in this little pie?
Qatar is being blockaded as part of what I see as a long term plan by Saudi Arabia, to control the wealth and resources of the middle east, to save themselves and to remain in power. They are risking engulfing the region in flames to save themselves from their own economic short sightedness.
Bad for Qatar, bad for the entire region, bad for the world if a truly middle east wide war kicks off.
Of course I'm paranoid so what do I know?