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Politics rocks the Gulf

Political developments have dominated the news in the MENA region this month. In Qatar, financial markets have sold off amid a diplomatic spat with regional powers. So far, though, the broader economic impact appears to have been limited. Qatar’s oil and gas shipments have not been disrupted and the Dolphin pipeline, which sends gas to the UAE, is still open. At the same time, a number of countries have pledged to boost exports to Qatar and the country is now importing goods via Oman rather than Dubai’s Jebel Ali port. Meanwhile, we think fears that the authorities will be forced to devalue the riyal are misplaced. Elsewhere, Saudi Arabia’s line of succession was reshuffled this month with King Salman’s son, Mohammed bin Salman (MbS), elevated to crown prince. The move has raised hopes of a renewed impetus to push through the Vision 2030 reform programme, although there are still plenty of hurdles to still overcome.

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