The Ukraine Crisis: Long Term Implications and Opportunities for the GCC States

GCC

U.S. – Gulf Policy

Commentary

Abdulaziz Kilani

More than three months after the invasion of Ukraine, the energy policies of the GCC states and their continued partnership with Russia has come to dominate the international agenda of the Gulf region. Indeed, the future of GCC-Russia cooperation over hydrocarbon exports will shape Moscow and Washington’s relations with these oil and gas-rich states. The recent visit of Russian Foreign Minister Sergey Lavrov and the upcoming visit of U.S. President Joe Biden to the region demonstrate the GCC’s centrality to the geopolitical struggle on display between Russia and the West.

When Russian President Vladimir Putin decided to invade Ukraine on February 24, 2022, many countries and leaders across the world condemned the “special military operation,” including the United States and European Union, who imposed several sanctions packages on Russia in retaliation. Putin’s invasion has effectively halted any attempt at negotiating a diplomatic resolution to the crisis. While neither the United States nor Russia is in favor of entering a direct clash with the other, Putin’s move increasingly pushes the two countries toward entering a second phase of the Cold War.

Meanwhile, Washington’s and Moscow’s regional partners and friends are observing developments closely. To varying degrees, the GCC states tend to enjoy good diplomatic relations with both the U.S. and Russia. Traditionally, the Arab monarchies have been more closely aligned with the United States and rely significantly on Washington’s protection. In recent years, however, Moscow has strengthened its ties with some GCC states. Additionally, Ukraine has sought investments from GCC states in recent years.

While the GCC states are willing to maintain their ties with all parties, the Ukraine crisis could render this balancing act difficult to maintain as the invasion is turning into a long-term armed conflict. Although the crisis provides some GCC states with opportunities to expand their influence, their interests generally lie in maintaining a middle ground between the two sides.

Out of Crisis Springs Opportunity

Saudi Arabia is one country that is likely to benefit from the prolonging of the war on Ukraine, which offers Riyadh a chance to improve the kingdom’s image on the international stage. This would be good news for Saudi Crown Prince Mohammed bin Salman, who received strong criticism following his country’s intervention in Yemen and the 2018 murder of journalist Jamal Khashoggi. At the same time, the high oil prices since end of February has given Riyadh an additional economic revenue as the largest crude oil exporter in the world with capability to produce 12 million barrels per day—a capacity that could be drawn upon if the conflict impacts global oil production or Europe decided to boycott Russia oil exports.

Qatar is another country that could benefit from the crisis, especially in the long term. Earlier this year, President Biden hosted Qatar’s Emir Tamim bin Hamad al-Thani at the White House. During the visit, Washington asked Doha to deliver emergency gas supplies to Europe if Russia cut gas exports to the continent. Doha made no promises, citing existing long-term contracts with other importers, but said said it would help “to the extent that it could.” After more than months of the invasion, it is clear that in the short term, it is unlikely that Qatar would be able to compensate for any systemic drop in gas supplies due to the Russia-Ukraine war. Yet, Doha could be able to replace the Russian gas as Europe is working on boycotting Russian gas exports.

Even soon before the invasion, Qatar’s energy minister, Saad al-Kaabi, signaled that his country cannot immediately replace gas exports to Europe, nor any country can. “Russia [provides]…30–40% of the supply to Europe. There is no single country that can replace that kind of volume; there is not the capacity to do that from LNG,” al-Kaabi said. He explained that “most of the LNG is tied to long-term contracts and destinations that are very clear. So, to replace that sum of volume that quickly is almost impossible.” Despite this, the Ukraine crisis may benefit Qatar’s gas expansion plans in the long term. This would strengthen Doha’s ties with Western governments, including the United States, which designated Qatar as a “Major Non-NATO Ally” on January 31, 2021.

A Foreign Policy Independent of Washington?

At the same time, the Ukraine crisis poses serious challenges to the GCC states. Militarily, it is extremely unlikely that the GCC states will get involved in the conflict. However, observers seem to agree that the Ukraine crisis complicates any neutral stance the states would like to adopt toward the hostilities. An example of that is the UAE’s decision to abstain from condemning Russia’s invasion in the United Nations Security Council. Most recently, on June 1, Lavrov met the GCC foreign ministers in Riyadh stating that the Arab monarchies will not join the Western sanctions on Russia.

The Emirati move should not be perceived as an abandonment of its partnership with the U.S., nor has it picked a side over the conflict. Instead, it suggests that the Emiratis are interested in pursuing an independent approach to foreign policy. This trend has been evident for years and can be seen in the UAE’s cooperation with China and its refusal to annul a 5G contract with Chinese telecommunications firm Huawei. It also indicates Abu Dhabi’s frustration with its partner, the United States, which it feels did little to respond to recent Houthi attacks against the Emirati capital. Similarly, the Saudis appear keen to portray an image that their foreign agenda is independent of the wishes of the United States.

It is not difficult to discern that one driving factor behind Riyadh’s and Abu Dhabi’s recent policies toward the war in Ukraine is their relationship with Washington, which has become clearly uneasy following the arrival of the current administration. Kristian Ulrichsen, a Baker Institute fellow for the Middle East, believes that Saudi and Emirati leaders “are playing hardball with the Biden administration and are trying to hold out for greater support in their policies toward the Houthis in Yemen before they agree to take any action to try and reduce oil prices, which are falling back anyway.”

While the Saudis and Emiratis have signaled that they will not always sing the same tune as Washington, this does not mean the GCC states have decided to side with Moscow over Washington. As Ulrichsen explained, “I’m not sure there is a GCC-wide tilt toward Russia, more that Gulf leaders do not want to be put in a position where they might be forced to pick sides in a conflict that does not directly involve them. That said, the sight of MBS and MBZ taking calls with Vladimir Putin while apparently refusing to do so with Joe Biden is a snub that may not be forgotten quickly in Washington.”

It is worth noting that this Saudi and Emirati behavior has emerged at a time when the United States appears determined to minimize its presence in the Middle East. Fears of abandonment and pressures to diversify their international connections would almost certainly have been reinforced by the American withdrawal from Afghanistan. By contrast, Russia has strengthened its hand with the Gulf monarchies. The convergence of Russian and Emirati interests in Libya exemplify this trend.

Looking forward, in the long term, the challenge for the GCC states revolves around maintaining the delicate balancing act toward the Russia-Ukraine war approach as casualties mount and the conflict escalates. This task will only become more difficult as the conflict drags on. The Ukraine crisis is unlikely to be resolved anytime soon and could impact U.S.-Russia relations for years after the fighting stops. Until the crisis ends, and as long as ties between Washington and Moscow remain tense, the GCC states are likely to remain under pressure to choose between the two great rivals. Of course, the GCC states do not prefer such an outcome and would prefer to maintain ties with both states. Whether they will be able to do so, however, is a different story.

Economically, the war in Ukraine will negatively impact GCC–Russia commercial cooperation. As the international sanctions regime imposed on Russia grows, GCC states may feel that they no longer have the freedom to trade flexibly with Moscow out of fear of Western retribution. There are also suggestions that it may dampen GDP growth for the GCC states. Thus, the Ukraine crisis will likely compound the difficulties brought about by the COVID-19 pandemic, which has hurt the Gulf states’ economies to varying degrees.

The Ukraine crisis presents both opportunities and challenges to the GCC states. In the short term, the Gulf states may well resist international pressure and maintain their neutrality. In the long term, however, they may feel compelled to pick a side. Continued obstinacy in the face of American demands may strain their ties with Washington, though an irreparable diplomatic rupture remains unlikely. Western powers, Russia, and other international actors will await their fateful decisions in the months to come.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.