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Analysis: Some Gulf rulers wary of U.S. shifts on Islamists, Iran

By Andrew Hammond and Rania El Gamal
DUBAI | Wed Sep 5, 2012 10:35am EDT

(Reuters) – The rise of the Muslim Brotherhood and its ideological affiliates in the Arab Spring uprisings has stoked fears among Gulf Arab governments that the United States may one day abandon its traditional allies as it warms up to Islamists.

While the ruling families in the Gulf are currently vital U.S. allies who buy large amounts of American military hardware and facilitate a significant U.S. military presence, some are apprehensive Washington may apply pressure on them to accommodate Islamists who could end up challenging their exclusive rule.

In a number of colorful online outbursts, Dubai’s outspoken police chief Dhahi Khalfan has warned of an “international plot” to overthrow Gulf systems of government with Western complicity. The Brotherhood, manipulated by the United States, is working to take over the Gulf by 2016, he said.

“Today the Americans are mobilizing the Muslim Brotherhood in the Arab nation, for the benefit of America, not the Arabs,” he wrote on his Twitter account on Sunday. “There is an American plan that has been drawn up for the region.”

Though Khalfan insists his tweets are his personal views, analysts and diplomats say they reflect largely unspoken concerns among the United Arab Emirates’ ruling elite about the regional popularity of the Islamists and the possibility that the West will sympathize with them as political underdogs.

They also reflect fears among the region’s Sunni Muslim rulers that, despite being Sunni itself, the Brotherhood is soft on their arch enemy Shi’ite Iran. Egypt’s Islamist President Mohammed Mursi tried to dissipate such fears at a Tehran conference last week by condemning Iran’s ally Syria and urging attendees to back rebels trying to overthrow President Bashar al-Assad.

Despite pockets of Western-style liberalism in cities like Dubai, most Gulf ruling elites seek to project an image of Islamic conservatism.

So the threat they see is not religious or social but political: the Brotherhood advocates playing by the rules of parliamentary politics as a path to government, threatening inherited rights to rule and state-backed clerical establishments.

An opposition movement that gains ground in Gulf states could perhaps find the U.S. administration newly disposed to speak out in its favor.

Such an opposition has already emerged in the UAE, where more than 50 Islamists linked to Brotherhood thinking have been arrested since late last year. So far Washington has kept mum.

“While the U.S. security umbrella protects the UAE against threats from Iran, Washington would be much more reluctant to support a widespread crackdown against a local opposition movement,” said analyst Ayham Kamel of the Eurasia Group.

“This is making the political leadership in the UAE much more nervous about domestic threats,” he said.

The Brotherhood also has potential to draw support from Gulf Arabs who may see their countries’ foreign policies as overly pro-Western and are concerned about the social influence of their large Asian and Western expatriate communities.

SEEKING U.S. REASSURANCE

Washington was initially hesitant to openly support the uprisings that toppled Tunisia’s Zine al-Abidine Ben Ali and Egypt’s Hosni Mubarak, partly because of concerns they could bring Islamists to power.

President Barack Obama’s administration has since overcome its reluctance, and has made extensive efforts to engage Egypt’s Brotherhood over the past year.

Analysts say Washington is simply pursuing realpolitik given the new power centers in the region.

“I don’t think the West is keen on having a bunch of Islamists coming to power in the Gulf anytime soon,” said Michael Stephens, researcher at the Royal United Services Institute based in Doha. “It’s more the case that Washington is working with who they can work with, because Islamists are in power and they have to be dealt with.”

U.S. officials said privately that they addressed the Gulf’s concerns last year after Mubarak fell and that subsequent conversations have not focused on the issue. They declined to go into specifics.

“Gulf governments realize both the United States and Iran will want to have relations with the new regimes,” said Ghanem Nuseibeh, senior analyst with Cornerstone Global. They just needed to be reassured that those regimes’ gain was not their loss, he said.

Diplomats said they were confident that building good ties with the Brotherhood was unlikely to strain the long-term strategic relationship between the U.S. and Gulf states.

“They (the Gulf states) need the Americans to protect them against Iran. Iran is the biggest worry for them in the whole region right now,” one Gulf-based Western diplomat said, asking not to be named due to the sensitivity of the issue.

YES, BUT …

Still, rumblings persist.

Saudi Arabia, which has long seen itself as insulated from political Islam because of its promotion of more conservative Salafi Islam, is feeling less secure these days, said Abdulaziz Alkhamis, a London-based Saudi analyst.

“After the Arab Spring they (the Islamists) are rising again. They start to use Islamist political rhetoric to gain publicity in the Gulf, especially Saudi Arabia,” he said.

Prominent clerics such as Awadh al-Garni and Salman al-Odah, viewed as sympathetic to the Brotherhood, have become more outspoken, cheering Islamist gains in social media.

Brotherhood-linked Islamists are well-established in Kuwait, where parliamentary politics is most advanced in the Gulf. And in Bahrain the government has drawn closer to the Minbar party, another group inspired by the Brotherhood, as it shores itself up against a protest movement dominated by Shi’ite Islamists.

The angst over what the United States plans for the region is at its most public and visceral in Bahrain, whose government Obama has urged to enter dialogue with leading Shi’ite opposition group Wefaq, citing the group by name.

Sunni clerics and commentators in official media regularly raise the fear that Washington, currently at odds with Tehran over its nuclear program, is plotting to create a Wefaq-led government in a regional reordering of power that would open a new page of cozy ties with Iran.

TV presenter Sawsan al-Shaer denounced a “Satanic alliance” between Tehran and Washington in an article in the al-Watan daily last month, claiming Wefaq was a “Trojan horse, used by the U.S. administration and Iranian regime to redraw the region.”

The wild card in the region is Qatar. It has actively promoted the Brotherhood and its affiliates, giving them coverage widely seen as positive on its satellite broadcaster Al Jazeera.

At an early stage in the uprisings Doha stuck its neck out much further than other Gulf states in its support for protests in Egypt and Tunisia, and then rebel movements in Libya and Syria, supporting those among them close the Brotherhood.

Earlier this year the Dubai police chief railed against Sheikh Yousef al-Qaradawi, a popular Brotherhood-linked Egyptian cleric based in Doha who criticized UAE policy towards Islamists on Al Jazeera. Khalfan threatened to arrest the cleric if he ever entered the country.

Alkhamis said opinion in Saudi Arabia was split over whether Qatar’s close links to the Islamists was a smart move to keep a close eye on a rising movement whose historical time has come, or a ruse to sow discord for its neighbor and sometime rival.

“The Qataris say that if we don’t have the Brotherhood (operating) openly then they will go underground and that it’s not against Saudi Arabia, but the Saudis are not happy with this,” Alkhamis said pointing to Qatar-backed Islamist seminars. “Some think the Qataris are not an honest friend, but have an agenda.”

(Additional reporting by Andrew Quinn in Washington and Raissa Kasolowsky in Abu Dhabi; Editing by Sami Aboudi and Sonya Hepinstall)

Reuters

Analysis: Global oil outages at 1.2 million bpd in March: survey

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By Ikuko Kurahone
LONDON | Fri Mar 23, 2012 4:16am EDT

(Reuters) – Global oil supply outages are running at more than a million barrels a day, a Reuters survey has found, helping provide justification for the United States and Britain should they release strategic reserves in a bid to cut oil prices.

Civil unrest, adverse weather and technical glitches disrupted 1.2 million barrels per day (bpd) of global oil output in March on the 90 million bpd world market, according to a Reuters calculation from information provided by companies, government agencies and traders.

While disruptions of supply to the world oil market are commonplace, it is rare and perhaps unprecedented that such a large volume of oil is offline at any one time outside a single major disruption.

The aggregate reduction now is close to the volume of exports lost from Libya during civil war last year which at its worst knocked out 1.4 million barrels a day.

The International Energy Agency opened emergency reserves for only the third time last year to cover that loss but is resisting doing so again, arguing that it does not see a significant supply disruption.

The United States and Britain were reported by Reuters last week to be planning a bilateral release. South Korea would support a release, a government source said, but has not yet had an approach to do so. Others including Germany and France are opposed to an increase. “I think it’s pretty clear from the administration’s references to Sudan’s and other outages that if it decides to use the SPR (Strategic Petroleum Reserve) it will justify it partly on various recent disruptions,” said a former White House energy advisor, Bob McNally, who heads consultancy Rapidan Group.

Leading oil exporter Saudi Arabia has raised its own output to 9.85 million bpd in February, according to a Reuters survey, but is the only producer with significant spare output capacity to counter serious shortfalls.

Some of the current outages could ease in April, when output from Canadian and Australian oilfields is expected to resume after temporary shutdowns. In addition, Libyan output is fast rising toward pre-war levels.

Supplies from politically volatile producers Syria, Yemen and South Sudan may remain disrupted for a prolonged period. Sanctions against Iran could also offset any increase in output from other countries, tightening oil supply later this year.

“Australian productions are just about to come back after the cyclone,” said Seth Kleinman, analyst at Citigroup. “But you always want to bet on more supply outages than less. The situation in Sudan and South Sudan has shown no signs of improvement and the key to watch is oil loadings from Iran,” he said.

Cyclone Luna last week forced Woodside Petroleum (WPL.AX) and Apache (APA.N) to shut several oilfields in Australia. Woodside’s Enfield has already restarted.

With Apache’s Stag likely to follow soon, about 65,700 bpd of Australian oil and about 320,000 bpd of Canadian oil, which has been unexpectedly closed off, are likely to come back to the market in April.

Still, a larger chunk of about 710,000 bpd in South Sudan, Yemen and Syria remains shut and shows no sign of an early return.

Disruptions may grow as a European Union ban on Iranian crude takes effect on July 1 and as pressure increases on Asian importers to reduce oil purchases from Iran. EU countries late last year were importing about 700,000 bpd of Iranian crude.

The IEA estimates Iran’s oil exports could be curtailed by between 800,000 and 1 million bpd from the middle of this year.

Citi’s Kleinman said Nigeria should be kept on the watch list. Although there have not been any significant outages in March, Africa’s largest producer suffers from sabotage attacks to oil production facilities, which have forced oil majors such as Royal Dutch Shell (RDSa.L) to suspend exports.

In the North Sea, the UK’s largest oilfield Buzzard has been experiencing sporadic technical glitches, which have reduced its output since last year.

Buzzard’s output fell to about 153,000 bpd earlier in March but recovered to a normal 200,000 bpd late last week.

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Following is the breakdown of global oil production outages by region and country as of mid-March.

MIDDLE EAST AND NORTH AFRICA – 490,000 bpd

Syria – Export outage totals about 150,000 bpd. Syrian oil output has been severely reduced since last year and its exports suspended since September due to international sanctions.

Before the conflict, Syria exported about 150,000 bpd of mostly heavy Souedie crude.

Yemen – About 140,000 bpd of Yemen’s oil output has been reduced by months of political unrest over the last year. Output came to a near standstill in mid-February during a week-long worker strike at its largest oilfield.

Libya – Libya’s crude output as of late March was about 1.4 million bpd, or 200,000 bpd below the full production level of 1.6 million bpd before the 2011 civil war. An official with Libya’s National Oil Corporation said its exports are likely to increase to 1.4 million bpd in April, including some deliveries from tanks following some loading delays from March due to bad weather.

AFRICA – 350,000 bpd

South Sudan – South Sudan shut its crude oil output of roughly 350,000 bpd – about three quarters of the combined total from Sudan and South Sudan – in January after Sudan took some of the crude to make up for what Khartoum said were unpaid transit fees.

AMERICAS – 320,000 bpd

Canada – Oil output has been cut by about 320,000 bpd as production of Suncor Energy Inc’s (SU.TO) and Syncrude Canada has been cut by 220,000 bpd and 100,000 bpd, respectively, for unplanned outages. Both will be back online in April.

ASIA PACIFIC – 65,700 bpd

Australia – Cyclone Luna forced Apache (APA.N) and Woodside Petroleum (WPL.AX) to shut Stag, Enfield and North West Shelf oilfields last week. Woodside said on Monday it had restarted production at Enfield. After the restart, the production shut-ins total about 65,700 bpd. The figure includes the 8,800 bpd Stag field, which Apache said is expected to restart soon.

(Reporting by Ikuko Kurahone, Bruce Nicols in Houston, Scott Haggett in Calgary, Mica Rosenberg in Caracas, Rebekah Kebede in Perth and Florence Tan in Singapore, editing by Richard Mably)

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