U.S. Raising Pressure on Saudi Arabia Over Qatar and Yemen, Sources Say
U.S. President Donald Trump, speaks with Mohammed bin Salman, the Kingdom of Saudi Arabia’s deputy crown prince and minister of defense, left, in the Oval Office of the White House in Washington, D.C., U.S. (Photographer: Mark Wilson/Pool via Bloomberg)

U.S. Raising Pressure on Saudi Arabia Over Qatar and Yemen, Sources Say

(Bloomberg) -- The U.S. is raising pressure on Saudi Arabia to wind down its political and economic isolation of Qatar, according to three people familiar with the effort, as the kingdom finds itself under scrutiny over the killing of journalist Jamal Khashoggi.

President Donald Trump has said little about Saudi Arabia’s role in the death of the U.S. resident and onetime Saudi insider-turned-critic since being briefed last week by CIA Director Gina Haspel. But the administration wants to see Saudi Arabia resolve the Qatar crisis and take similar steps toward its widely criticized war in Yemen, according to one U.S. official who, like the other people cited in this story, asked not to be identified.

Officials at the Saudi embassy in Washington and the White House communications staff didn’t immediately respond to requests for comment.

The killing of Khashoggi and Saudi Arabia’s shifting explanations for what happened after he entered the kingdom’s consulate in Istanbul on Oct. 2 have focused attention on Crown Prince Mohammed bin Salman’s policies and raised questions among critics about whether he’s fit to succeed his father, King Salman. The crown prince controls all levers of power in the world’s biggest oil exporter.

Less Impact

The Gulf feud hasn’t had the economic impact on Qatar that Saudi Arabia had envisioned in June 2017 when the kingdom, together with the United Arab Emirates, Egypt and Bahrain severed their diplomatic and transport links with Qatar, the world’s biggest exporter of liquefied natural gas. With the help of its own deep pockets and alternative trade routes, Qatar has weathered the embargo, economists have said.

“If the renewed attempt at getting both countries to engage in dialogue results in a resolution, this would indeed lift some investor concern with regards to geopolitical risk and uncertainty in the region,” said Carla Slim, an economist for Standard Chartered Plc in Dubai. “Such a boost to sentiment would translate to markets.”

In what appeared to be a shift in tone on the 16-month crisis in Qatar, Prince Mohammed last week acknowledged the resilience of Qatar’s “strong economy” and forecast it would be one of the countries in the region capable of changing for the better in the next five years.

“Even Qatar, despite our differences with them, has a very strong economy and will be very different” in the next five years, the prince said at an investment summit in the Saudi capital as he explained his vision for the Middle East’s place in the world.

Even before Khashoggi’s death, the U.S. found itself in a difficult situation over the Qatar crisis and the war in Yemen. Qatar is a U.S. ally that hosts a key American military base. Former Secretary of State Rex Tillerson repeatedly tried without success to negotiate a resolution to the crisis. Trump initially endorsed the Saudi argument that Qatar is a backer of terrorists before tempering his stance.

The war in Yemen has been just as problematic for the U.S. The conflict -- which has pitted the world’s biggest oil exporter against Houthi rebels in the poorest Arab nation since March 2015 -- has degenerated into a humanitarian disaster, according to the United Nations. The U.S. has faced criticism as having a responsibility in the conflict because of its military support for Saudi Arabia, including providing intelligence, training and targeting information.

While the U.S. has condemned Khashoggi’s killing -- Trump called it “one of the worst in the history of cover-ups” -- the president and his top aides have repeatedly signaled that the broader U.S.-Saudi relationship, including billions of dollars in military sales, shouldn’t be put at risk over the journalist’s death.

Asked Monday what action the U.S. has taken almost four weeks after Khashoggi’s disappearance, White House Press Secretary Sarah Huckabee Sanders told reporters that “the administration is considering what action we’ll take moving forward” after Haspel gathered more intelligence and briefed the president.

In the meantime, Saudi Arabia and Turkey continue to feud over whether 18 suspects in Khashoggi’s death will be handed over to Ankara. Saudi Arabia’s foreign minister said on Saturday that it won’t extradite any suspects to Turkey, despite calls by Turkish President Recep Tayyip Erdogan to do so as a sign of goodwill.

“The individuals are Saudi nationals, they are detained in Saudi Arabia, the investigation is in Saudi Arabia,” Foreign Minister Adel Al-Jubeir said Saturday at the Manama Dialogue conference in Bahrain. “They will be prosecuted in Saudi Arabia.”

©2018 Bloomberg L.P.

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