Gulf countries playing safe

Business strategy amid geoeconomics mandates Gulf countries to play safe with both Houthis and American led West. Obviously they cannot take sides in public because of the sensitivity of the issue. More than that, they know where their bread is buttered.

Gaza genocide has impelled Houthis to go offensive. Their plan is to prevent Israel’s international trade that sustained her to finance this calamity. When several thousand Gazans died it became a political cum religious issue in the Arab and Islamic world. Gulf countries were placed on the horn of a dilemma. If they take the side of the West their population which is already restive would rise up in arms. At the same time they need to continue trading with the globe both west and east.

Protecting geoeconomics power play became an urgent issue for the countries in Gulf Co-operation Council (GCC) namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia & United Arab Emirates because oil trade is a vital part of their revenue stream. So when “Operation Prosperity Guardian”  a US led task force to protect Red Sea Passage they quietly persuaded Bahrain which is home to the US Naval Forces Central Command and the US 5th fleet and which being not a significant player in the oil trade to join in.

Saudi Arabia thereafter started to divert oil exports from southern part of Red Sea ports to her northern part. More volume was pumped from the Muajjic terminal located close to the Yanbu Port into Sumed pipeline in the northern tip of Egyptian Sinai Peninsular to flow towards her Mediterranean Sea ports and thence to European market. In normal course less than 10 to 15% of the entire Saudi production is shipped through Red Sea ports both north and south of Saudi Arabia. At present, this volume has an uptick exclusively from northern ports.

As a part of the “Abram Accord 2020, “Dubai-Haifa Land Corridor" was established. Alternatively known as “Express Land Route" this corridor connects Jebel Ali Port in UAE to Haifa port in Israel traversing Saudi Arabia and Jordan. Earmarked especially to transport goods from India to Israel with an aim in reducing time and cost it is estimated that approximately 50 to 100 billion USD worth of goods are plying through. Today it comes handy because this route functions as an alternative to Red Sea transport.

But the crucial question remains. Both Saudis and Emiratis know for sure Houthis can bomb daylight out of this corridor. Hence they have to placate Houthis. More than that the Iranians. Well geoeconomics dictates that GCC has to fine tune business strategy in their relationship with both of them. Behind the back of America led West moves are afoot to bring them along into the financial gravy train. What is more, they are ostensibly persuading America to play tough with Israel.

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist