Rising oil prices have enabled Qatar to record a quarterly budget surplus for the first time since 2015 despite the regional embargo. The risk is that Qatar’s improving finances reduce the pressure to implement much-needed economic diversification.

Qatar’s economy is out of the red for the first time since oil prices collapsed, despite an embargo by its neighbors now in its second year. Latest data from the Central Bank (QCB) shows a Q1 surplus of $260mn, Qatar’s first...