Torn Between Qatar, Saudi, Russia's in a Bind in Gulf Crisis

(Bloomberg) -- The deepening crisis triggered by Saudi-led efforts to isolate Qatar is putting Russia in a bind over relations it's sought to cultivate with several countries in the region.

Russia, which urged talks to resolve the confrontation, is trying to maintain a delicate balance as it has close ties with Qatar and is cooperating with Saudi Arabia to stabilize oil markets and resolve the war in Syria, where it's also working with Iran. The Qatar Investment Authority and Glencore Plc agreed to buy a 19.5 percent stake in Russia's largest oil producer, state-owned Rosneft PJSC, for $11 billion in December.

“Any escalation in the region, which is already afflicted by various conflict situations, is a matter for concern,” Russian Foreign Minister Sergei Lavrov told reporters in Moscow on Wednesday. “We believe any differences should be resolved at the negotiating table to eliminate concerns and unite forces against the main threat in the region, terrorism.”

Demonstrating the fine line Russia's treading, President Vladimir Putin spoke Tuesday by phone with Qatari Emir Sheikh Tamim Bin Hamad Al Thani and Egyptian President Abdel Fattah el-Sisi. Egypt joined Saudi Arabia, Bahrain and the United Arab Emirates a day earlier in cutting diplomatic ties and transport links with Qatar, as they seek to punish the gas-rich emirate over its alleged support for Islamist groups and its cordial relations with Iran, their key regional rival. The measures risk causing supply shortages and disrupting Qatar's energy exports.

While Russia's unlikely to act as a mediator in the dispute, the “active work” of Putin and Lavrov shows “that we're interested in resolving the situation around Qatar by political and diplomatic means,” Kremlin foreign policy aide Yuri Ushakov told reporters in Moscow on Wednesday.

‘Preserving Peace'

Lavrov and Iranian Foreign Minister Mohammad Javad Zarif discussed the crisis by phone Wednesday and urged all sides to seek “mutually acceptable solutions in the interests of preserving peace and stability in the Gulf region,” the Russian Foreign Ministry said in a website statement.

“Russia has adopted an absolutely neutral position but there are hopes on investments from Qatar,” said Irina Zvyagelskaya, a senior fellow at the government-funded Russian Academy of Sciences' Institute of Oriental Studies.

U.S. President Donald Trump's support for the Saudi-led embargo on Qatar and hostility to Iran represents another risk for Russia should it try to use its influence to broker a compromise, said Sergei Karaganov, a former Kremlin foreign policy adviser.

“As a mediator, you can get potential benefits but the risks are very high,” Karaganov said. “The situation is so unpredictable -- the U.S. can't be a reliable partner because it isn't neutral.”

On a conference call with reporters Wednesday, Kremlin spokesman Dmitry Peskov dismissed as “fake” a CNN report that said U.S. investigators believe Russian hackers contributed to the crisis by planting a fabricated news story with Qatar's state news agency in an effort to divide the U.S. and its regional allies.

--With assistance from Jake Rudnitsky and Stepan Kravchenko

To contact the reporter on this story: Henry Meyer in Moscow at hmeyer4@bloomberg.net.

To contact the editors responsible for this story: Gregory L. White at gwhite64@bloomberg.net, Tony Halpin, Paul Abelsky