Qatar crisis reaches an impasse

The diplomatic crisis between Qatar and regional powers seems to be in deadlock. Saudi Arabia and its allies revised their demands in July to something that appeared to be more palatable for Doha, but the Qatari authorities have refused to enter into negotiations until the blockade on the country is lifted. Meanwhile, the mud-slinging has been ratcheted up after Qatari pilgrims reportedly struggled to enter Saudi Arabia ahead of the Hajj. In addition, rumours have swirled that the Saudi authorities are trying to instigate a palace coup in Qatar. And Qatar has restored full diplomatic relations with Saudi’s regional foe, Iran. Against this backdrop, a swift end to the crisis seems highly unlikely. On the economic front, the blockade appears to have dealt a significant blow to Qatar’s economy when it was first initiated in June but there are early signs that this is starting to dissipate. Imports have now been rerouted via Oman rather than Dubai, inflation dropped back in July and financial conditions have loosened in recent weeks.