$0 in Iran oil sales? Anything to stop Muslim democracy… but they won’t stop it

April 27, 2019

by Ramin Mazaheri for The Saker Blog

If 7,000 Greeks can stop the Persian empire at the narrow pass at Thermopylae, I think it’s absurd to think Iran can’t stop 20-30% of global oil traffic at the 3 kilometer-wide shipping lane in the Strait of Hormuz. That would, of course provoke a global crisis and economic disaster.

That’s the “nuclear option” for Iran. It is reportedly part of a military plan called “Ghadir”, which evokes the alpha letter of modern Iranian Islamic history – Ghadir Khumm is the location where Prophet Mohammad anointed Imam Ali his successor, but (those who came to be called) Sunnis amazingly rejected the Prophet’s wishes. Shia – which means “partisans of Ali” – did not.

The US has severely overestimated their military capability to defend this attempt to politicise oil and get Iranian oil exports to zero. Mining the strait, mini-subs, kamikaze speedboats – all of these will be hugely effective against anything the US Navy has. For all the US drones and satellites and aircraft carriers, there is no way they can protect the Straits of Hormuz long-term, not any more than they could hold any of a thousand Afghan mountain passes long-term. Should we trust history or the sales pitches of corrupt Pentagon contractors?

No military can stop endless kamikazes. But who wants to be a kamikaze? What could produce the desire to be a kamikaze?

$0 in oil sales may do it.

There is undoubtedly a part of the Iranian psyche which now wants a final showdown. The years of talking, talking, talking about the JCPOA pact on Iran’s nuclear energy program… and then its failure, thanks to US unilateralism and spineless European hypocrisy, has created a lot of existential angst for Iranians. How can Iranian diplomacy work when the opponents refuse diplomacy and honor?

That is an existential and philosophical question, but there is also a lot of undeniable frustration since the inhumanly effective 2012 Triple Sanctions (US, UN, EU). Iranian society has been forced to become perceptibly more desperate, more coarse, less warm, less Iranian – it is difficult to admit this.

Iran cannot be forced into starvation indefinitely. That is why blocking the Strait of Hormuz – if it ever happens – will certainly be accompanied with an ultimatum: the West must end Iran’s isolation and finally accept the Iranian Islamic Revolution of 1979. The world must live with us, finally, because it cannot live without us in the 21st century.

Unfortunately, due to Islamophobia, even more so than 40 years of media-led Iranophobia, nobody in the West is going to burn a draft card for Iran. The opposition to the obviously immoral war on Iraq produced just a day of street protests in the US – hardly worth the effort. Neither is Iran in the position of the USSR, meaning it has no chance to save the West from racist fascists – after all, the West supports the racist fascists (Taliban in the 1980s, ISIL today, et al).

Because nobody in the West will put any pressure on the governments to stop the oppression of Iran, perhaps Iran has to force the issue by closing the Strait of Hormuz? Is Iran backed into a corner?

I say no, because Iran is not going to sell $0 in oil in month of May.

Firstly, should Iran be worried? Answer: no. The world needs Iranian oil (and revolutionary culture)

When is the last time the US policy worked out in the Middle East? Afghanistan, Iraq, Syria, Yemen – all have had their growth retarded, but are not destroyed… just like Iran.

As Pepe Escobar pointed out, it’s much easier to retard the Colombian dream of Eurasian integration by attacking its weakest major point – Iran, as opposed to China and Russia.

The bottom line is: can the US do what it claims – reduce Iranian oil sales to $0. No, they cannot.

It certainly seems like the US is foolishly believing self-aggrandising and duplicitous claims from Gulf princes, who are overestimating their oil production abilities.

However, we must first remember that Saudi hatred for Iran is not based on religion – even though “Saudis are not Muslims – they are Wahhabis,” as the regional saying goes – it is based on politics: they hate Iran for proving that all monarchies are immoral, ineffective, undemocratic and a hindrance to the type of democracy Muslims want (Islamic socialist). Their animosity is based on Iran’s ability to make Muslims aware of their modern Islamic socialist rights, and to show how acquiring these rights does not – as the West insists – require the exclusion of their culture, history and religion. Iran, in the manner of all true revolutionaries, insists on constantly couching it in these drastic but honest terms, thus continually flouting their rebellion and their success in the face of the horrific Gulf monarchs.

But the Gulf monarchs, shockingly, are liars: They will NOT be able to give China and India enough replacement oil.

Saudi production peaked at 11 million bpd (barrels per day) last November, which was the system’s maximum stress level, but is now down below 10 million. Offsetting Iranian production – getting up to at least 12 million bpd – thus seems impossible: “A 2-million-bpd Saudi production increase would move the Kingdom’s oil production into unchartered territory and would wipe out completely the kingdom’s spare capacity,” according to Gary Ross, head of global oil analytics at S&P global, via Reuters.

Anyway, Saudi Arabia is not going to increase oil production in May despite the sanctions – they want higher prices to continue bankrupting shale oil / fracking. Because the Saudi state full of disorganised and egotistical princes, they are also full of conflicting agendas.

As far as the UAE, they produce only 3 million bpd, so they aren’t capable of tipping the output scales drastically.

Furthermore, OPEC is at its lowest production since 2015, and Venezuela and Libya show no signs of regaining former glories anytime soon. Even if slow increases from the Saudis and UAE arrive, there are other drains on oil inventories to offset even before cutting off Iran.

So why should Iran feel like we aren’t needed anymore?

Only an administration as filled with incompetents as the Trump administration is could take such lies and mixed signals seriously. But the US is about Israel first, corporations second and everyone else last, therefore any attempt to foment regional stability and higher oil prices makes their constituents happy. Of course, it also advances capitalism-imperialism.

Iran – still no retreat, no surrender… still no big deal

Even just moderately-intelligent Westerners know that “Iran sanctions aren’t a realistic path to peace”, because the sanctions are not designed for peace, but for fomenting internal civil war and to support regional US imperialism.

There is another way Iran could decisively end Western antagonism: simply accede to Western demands, as encapsulated by US Secretary of State Mike Pompeo’s totally-absurd 12 demands. All Iran has to do is – just like the North Vietnamese, North Koreans, Cubans and Chinese – is renounce their revolution entirely, like Egypt, post-Sankara Burkina Faso and now, to a lesser extent, Julian Assange-betraying Ecuador.

I examined what steps Iran would have to actually take in order to get the Cold War called off in this article, Iran detente after Trump’s JCPOA pull out? We can wait 2 more years, or 6, or…., which caps my upcoming book on Iran.

Beyond Pompeo’s fatheaded nonsense, it all comes down solely to capitalist-imperialist logic: Iran must sell off a controlling chunk of the nation into Western hands. There is no way Iran will do that – there are just too many people who are too committed to upholding the 1979 Revolution, the Constitution and Iranian sovereignty.

It’s not as if Iran’s politicians are as out-of-touch, arrogant and stupid as a Persian Gulf prince: the current budget is based on only exporting just 1.5 billion barrels per day with a price of only $54 per barrel (or $83 million per day) because we all knew back in early 2016 that a Trump presidency would hit Iran, Cuba and Palestine the hardest. The price is already around $70. If we assume that things really progress badly, we must also assume the price of oil will rise – a price of $80 means Iran needs to sell just 1 million barrels per day ($80 million per day) to stay under budget. Last month, with some countries already instituting cutbacks, Iran sold 1 million barrels.

The reality is that it is all about China and India for Iran – they sell 3 times more oil to them than even Iran’s #3 customer. Reports are conflicting, negotiations are ongoing – we can’t truly say with 100% confidence what will happen in Beijing and New Delhi.

But… India is the more compliant nation, and they are reportedly going to reduce sales to 100,000 bpd using a rupee payment system. The links are going to remain open, and that is all that matters – the numbers will certainly be fudged. Long-term, Iran is quite happy to sell oil in non-dollar denominations and be the pioneer in that move away from the petrodollar.

Regarding China: Some reports say China will actually increase imports from Iran up to 1 million bpd, totally sabotaging the US. I would hold out absolute certainty until the US and China signs their trade deal next month. However, I highly doubt China is going to sabotage the key node – and the absolutely key energy node – in their Belt and Road Project. China might sell out Iran for a couple years, perhaps during the Trump administration, but long-term? No way. China is not an island, and Iran is the only country which has proven to be revolutionary enough for Red China to trust, which is why they have such serious multi-decade plans already signed. Hard to predict the future, but there’s always both short- and long-term considerations, and long-term China and Iran are united, firmly.

Beyond the two big customers, Turkey says they will flout sanctions, but Turkey also talks a much better game than they punch.

Regardless, Iran will still sell oil “illegally”. Iran, as Foreign Minister Javad Zarif recently joked, has a “PhD in that area” of sanctions-busting. Iran was the first modern nation to barter oil for something other than US dollars, and they will be the first nation (I predict) to successfully implement a national crypto-currency.

Iran will obviously send oil to places like Turkey (and India, as Iraq is a top-3 supplier for them) through friendly Iraq. Will Iran lose some profit as a result? Yes, but it’s not like Iranian oil is going to be sold for pennies on the dollar to Iraqis – we are talking minor losses of 10-20%, I’d guess. Over decades that’s significant, but if we are talking about enduring 2 or 6 years more of Trump, then it’s certainly not enough to bankrupt Iran, which is the goal of the illegal US tactic. Crucially, it is certainly fair to assume that now-higher oil costs will offset this new surcharge for sanctions-busting via Iraq.

Regarding bankruptcy: It’s hard to say exactly how much hard currency reserves Iran has, but the IMF said $100 billion in 2017. What reduced oil sales really means – again, $0 won’t happen – is a cutback in new projects.

What does that mean? It means cutting out future infrastructure projects, as well as savings into the National Development Fund. Just as Cuba prioritises their far, far fewer pesos for health, education and food, so will Iran – neither country will starve, neither country will relent… and Iran will still make billions selling oil, unlike Cuba. The years of worsened sanctions has meant things like: Iran have to postpone record breaking projects, like Niayesh Tunnel, the 2nd-largest urban tunnel in the world, finished in 2013, or the Sadr double-decker Expressway, also finished in 2013… but only for a few years. It has meant things like: Iran will get all the global infrastructure in place and start broadcasting PTV Français, and even tap yours truly as its Paris correspondant, but a lack of money means that all the journalism is done solely in Tehran for now. But someday I’ll be reporting in French, Inshallah.

Of course, sanctions do more than retard Iranian growth – the existential angst leads to unnecessary inflation, reluctance for private domestic investment in the “real economy”, and major cutbacks in quality of life for the average Iranian. But, as I’ll point out later – Iran is not Yemen, which is what the US mistakenly thinks they can achieve.

People on the left and the right in Iran actually welcome each new tough sanction with a Persian carpet rollout – it necessarily fuels the “Resistance Economy” championed by Leader Ali Khamenei and others. There is no doubt that a sanctioned people do not just throw up their arms and quit – domestic capacities, initiatives and genius must be honed and further created. In 1995 Iran produced almost no cars – by 2010 they were 14th in the world and the undisputed Middle East leader. These are the types of things I am talking about, but which are not possible without socialist-inspired central planning and central control over industries.

Iran also has recent experience instituting a true War Economy, with rations and coupons to enforce economic egalitarianism, and that is another counterpunch to the US. It also creates countless future economic and cultural benefits.

The Iranian government are not Yemeni rebels, who have no factories, no bureaucracy, no refineries – and thus they are starving, sadly. The Iranian government is the stable status quo, and the status quo always has a million levers to pull before things get hairy… but because they are socialist-inspired, Iran’s government has three million levers. As I have repeatedly demonstrated over the years, the Iranian government controls essentially 100% of the non-Black Market and non-carpet economy. So, far beyond oil, the government actually has the power to completely mobilise the economy in favor of the People, which is something that Eurozone nations no longer have.

The end for US unipolar dominance will arrive swiftly. Iran’s reversal of isolation will also be swift, just as – all of a sudden – the US made detente with China in 1971 after decades of the same sanctions and exclusion Iran deals with. But detente certainly cannot happen during Trump’s first term, given how the US Deep State has so effectively mobilised against him to neuter his once-diplomatic foreign policy plans.

There is no long-term game plan for ending the phobia of Islamic democracy – in 2019, only Iran’s continued determination and success is the answer. Giving up in order to sell oil “legally” is not an answer, nor necessary. Iran has domestic levers to pull for years, and the experience to pull the right ones.

Maybe someday Iran will finally strike back and play their “now the talk really starts” exterior lever – closing the Straits of Hormuz? Iran is all about “neither East nor West but the Iranian Republic”, but I still don’t think that will happen until China feels secure enough to give the signal that they back Iran to the hilt, and that won’t come until the Belt and Road Initiative is further along.

As far as “more sanctions” – certainly disagreeable, but never terminal for Iran.

Ramin Mazaheri is the chief correspondent in Paris for Press TV and has lived in France since 2009. He has been a daily newspaper reporter in the US, and has reported from Iran, Cuba, Egypt, Tunisia, South Korea and elsewhere. He is the author of I’ll Ruin Everything You Are: Ending Western Propaganda on Red China. His work has appeared in various journals, magazines and websites, as well as on radio and television. He can be reached on Facebook.

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Moscow’s Strategy: To Win Everywhere, Every Time

Moscow’s Strategy: To Win Everywhere, Every Time

Moscow’s Strategy: To Win Everywhere, Every Time

Important events have occurred in the Middle East and North Africa in recent weeks that underline how the overall political reconfiguration of the region is in full swing. The Shia axis (Axis of Resistance) continues its diplomatic relations and, following Rouhani’s meeting in Baghdad, it was the turn of Adil Abdul-Mahdi to be received in Tehran by the highest government and religious authorities. Among the many statements released, two in particular reveal the high level of cooperation between the two countries, as well as demonstrating how the Shia axis (Axis of Resistance) is in full bloom, carrying significant prospects for the region. Abdul-Mahdi also reiterated that Iraq will not allow itself to be used as a platform from which to attack Iran:

“Iraqi soil will not be allowed to be used by foreign troops to launch any attacks against Iran. The plan is to export electricity and gas for other countries in the region.”

Considering that these two countries were mortal enemies during Saddam Hussein’s time, their rapprochement is quite a (geo)political miracle, owing much of its success to Russia’s involvement in the region. The 4+1 coalition (Russia, Iran, Iraq, Syria plus Hezbollah) and the anti-terrorism center in Baghdad came about as a result of Russia’s desire to coordinate all the allied parties in a single front. Russia’s military support of Syria, Iraq and Hezbollah (together with China’s economic support) has allowed Iran to begin to transform the region such that the Shia axis (Axis of Resistance) can effectively counteract the destabilizing chaos unleashed by the trio of the US, Saudi Arabia and Israel.

One of the gaps to be filled in the Shia axis (Axis of Resistance) lies in Lebanon, which has long experienced an internal conflict between the many religious and political currents in the country. The decision by Washington to recognize the Golan Heights as part of Israel pushed the Lebanese president, Michel Aoun, to make an important symbolic visit to Moscow to meet with President Putin.

Once again, the destabilizing efforts of the Saudis, Israelis and Americans are having the unintended effect of strengthening the Shia axis (Axis of Resistance). It seems that this trio fails to understood how such acts as murdering Khashoggi, using civilian planes to hide behind in order to conduct bombing runs in Syria, recognizing the occupied territories like the Golan Heights – how these produce the opposite effects to the ones desired.

The supply of S-300 systems to Syria after the downing of the Russian reconnaissance plane took place as a result of Tel Aviv failing to think ahead and anticipate how Russia may respond.

What is surprising in Moscow’s actions is the versatility of its diplomacy, from the deployment of the S-300s in Syria, or the bombers in Iran, to the prompt meetings with Netanyahu in Moscow and Mohammad bin Salman at the G20. The ability of the Russian Federation to mediate and be present in almost every conflict on the globe restores to the country the international stature that is indispensable in counterbalancing the belligerence of the United States.

The main feature of Moscow’s approach is to find areas of common interest with its interlocutor and to favor the creation of trade or knowledge exchange. Another military and economic example can be found in a third axis; not the Shia or Saudi-Israeli-US one but the Turkish-Qatari one. In Syria, Erdogan started from positions that were exactly opposite to those of Putin and Assad. But with decisive military action and skilled diplomacy, the creation of the Astana format between Iran, Turkey and Russia made Turkey and Qatar publicly take the defense of Islamist takfiris and criminals in Idlib. Qatar for its part has a two-way connection with Turkey, but it is also in open conflict with the Saudi-Israeli axis, with the prospect of abandoning OPEC within a few weeks. This situation has allowed Moscow to open a series of negotiations with Doha on the topic of LNG, with these two players controlling most of the LNG on the planet. It is evident that also the Turkish-Qatari axis is strongly conditioned by Moscow and by the potential military agreements between Turkey and Russia (sale of S-400) and economic and energy agreements between Moscow and Doha.

America’s actions in the region risks combining the Qatari-Turkish front with the Shia axis (Axis of Resistance) , again thanks to Moscow’s skilful diplomatic work. The recent sale of nuclear technology to Saudi Arabia, together with the withdrawal from the JCPOA (the Iranian nuclear agreement), has created concern and bewilderment in the region and among Washington’s allies. The act of recognizing the occupied Golan Heights as belonging to Israel has brought together the Arab world as few events have done in recent times. Added to this, Trump’s open complaints about OPEC’s high pricing of oil has forced Riyadh to start wondering out aloud whether to start selling oil in a currency other than the dollar. This rumination was quickly denied, but it had already been aired. Such a decision would have grave implications for the petrodollar and most of the financial and economic power of the United States.

If the Shia axis (Axis of Resistance), with Russian protection, is strengthened throughout the Middle East, the Saudi-Israel-American triad loses momentum and falls apart, as seen in Libya, with Haftar now one step closer in unifying the country thanks to the support of Saudi Arabia, the United Arab Emirates, France and Russia, with Fayez al-Sarraj now abandoned by the Italians and Americans awaiting his final defeat.

While the globe continues its multipolar transformation, the delicate balancing role played by Russia in the Middle East and North Africa is emphasized. The Venezuelan foreign minister’s recent visit to Syria shows how the front opposed to US imperialist bullying is not confined to the Middle East, with countries in direct or indirect conflict with Washington gathering together under the same protective Sino-Russian umbrella.

Trump’s “America First” policy, coupled with the conviction of American exceptionalism, is driving international relations towards two poles rather than multipolar ones, pushing China, Russia and all other countries opposed to the US to unite in order to collectively resist US diktats.

India Stops Buying Venezuelan Oil At US ZOG’s Request, Proving Its Status As An ‘Israeli’-American Vassal Yet Again

 

by Jonathan Azaziah

Search for “India” on Mouqawamah Music or Mask of Zion, read just a piece or two, and it won’t take you long to figure out just how much of a devil-regime Hindustan truly is. Especially with the likes of the Hindutvadi BJP and Narendra “Butcher of Gujarat” Modi at the helm. From its aggression against Pakistan to its ruthless occupation and oppression of Kashmir, its always-deepening relationship with the usurping Jewish entity to its brutal war on the Naxalites, all India does is prostitute itself in the name of Global Zionism. Considering this, that there are so many Indian leftists and “anti-imperialists” who think their nation is “resistant” or even “nonaligned”, is mind-boggling. India is an American-‘Israeli’ vassal and true-indeed, it has always been one. And its decisions vis-a-vis Venezuela over the last several weeks drive this point so far and so hard home, that any attempt to deny it in the slightest should lead to one being checked into the funny-farm.

On March 10th, Elliot Abrams, the leader of the coup in Venezuela, told Reuters in an interview that he is “arguing, cajoling, urging” India to cut off ties with the democratically elected, wholly legitimate Maduro government. He told New Delhi outright, “We say you should not be helping this regime. You should be on the side of the Venezuelan people.” As Reuters notes in its piece, “The Indian market is crucial for Venezuela’s economy because it has historically been the second-largest cash-paying customer for the OPEC country’s crude.” Second behind whom you ask? Only the American ZOG. Which means if Venezuela doesn’t have access to the Indian market, total financial collapse very well may be right around the corner.

Just about 48 hours later on March 12th, Bolton and Pompeo joined the threats-party and the Hindu supremacist regime decided to start abiding by Abrams’ orders, issuing warnings against Indian oil companies to stop importing Venezuelan crude. These firms would face “undisclosed consequences” if they didn’t listen to the Modi ZOG.

Information in the media, both in the West and South Asia, was scant over the next 10 days. But then, on March 22nd, the big news came in from Oil Price, the world’s top energy news website: India and all Venezuelan-connected Indian private energy outfits were no longer taking in Venezuelan petrol.

And for the big finish, just about a week following the revelation, Elliot Abrams was back in the news, grinning ear to ear and declaring, “We are very happy to see” the “very considerable amount of cooperation” from India and Indian companies with relation to Venezuela. The Jewish supremacist war criminal was all but in an orgasmic state.

New Delhi has sold Caracas down the river. It cannot be read any other way. And noting just how much money was at stake at this critical juncture for the Venezuelan people, government and economy–tens of billions of dollars at least, perhaps upwards of $100 billion plus–we can rightly say that India is now a party to the US-EU-Zionist war on the Bolivarian Revolution. Just as India is a party to the economic war on Iran. Indeed, India can’t and won’t buy oil from the Islamic Revolution unless it gets a go-ahead from Washington.Thus, if, or better still, WHEN the American ZOG tells Hindutva to break ties with the Iranian nation completely, Modi and the rest of his BJP-RSS-VHP gang most certainly will.

Prior to closing, it must be noted that while India was allowing itself to be commanded like a show-dog is commanded by its trainer, its representatives were laying a heaping dose of praise upon the fake Jewish “state” at the AIPAC conference and inaugurating Indian-‘Israeli’ initiatives in the fields of medicine and artificial intelligence. Obeying the American wing of the Rothschild Imperium on the one hand and increasing friendship with the ‘Israeli’ crown of the Rothschild Imperium on the other. This is India. Now Venezuela, a long-time target of the Hindutvadis’ Zionist partner-in-crime, feels the betrayal that Kashmiris, Dalits, Indian Muslims, Indian Christians, Indian Sikhs, the Naxalites, Pakistanis, Palestinians, Nepalese, Sri Lankans, Bangladeshis and others have been reeling from for decades. Shameful isn’t even the word. To be honest though… What else is to really be expected from a bunch of fanatics who drink cow urine and hold festivals centered around the throwing of cow dung? Absolutely despicable.

Why Would the US Want Venezuela’s Oil When It Already Buys 41% of Its Total Exports?

January 26, 2019

The prevailing Alt-Media narrative that Washington wants to impose a pro-US puppet regime on Venezuela in order to control all of the country’s oil doesn’t make much sense when considering that it already buys 41% of the Bolivarian Republic’s total exports, meaning that another more nuanced explanation needs to be offered in order to account for this narrative double-think.

The Alt-Media Community is full of commentary about how the US wants to impose a puppet regime on Venezuela in order to control the country’s oil, but that doesn’t make much sense because it already buys 41% of the Bolivarian Republic’s total exports as evidenced by the Energy Information Agency’s executive summary of the energy trade between the two as of 7 January, 2019. The US is Venezuela’s top customer whereas Venezuela is the US’ third-largest supplier of crude oil imports according to the report, so Washington is already getting all that it needs from Caracas as it is. Given this ironic dynamic between the two geopolitical and ideological foes, it could be expected that the US would also obtain access to the resources of the world’s largest oil reserves in the Orinoco Belt one day too, once again contradicting the simplistic narrative that Washington is only waging this Hybrid War for the oil.

Nevertheless, the truth of the matter is that control over Venezuela’s oil is indeed one of the motivations behind this conflict, though not in the way that it’s being portrayed. Alongside ensuring full geopolitical control over the Caribbean Basin and ideologically confronting socialism, the US wants to obtain predominant influence over Venezuela in order to incorporate it into a parallel OPEC-like structure for challenging the joint Russian-Saudi OPEC+ arrangement per the author’s late-2016 prediction about the formation of a “North American-South American Petroleum Exporting Countries” (NASAPEC) cartel. This entity would function as “Fortress America’s” energy component and have the potential to exert powerful long-term pressure on the international oil market at Russia and Saudi Arabia’s expense. When coupled with the US and Qatar’s joint LNG investment plans, it’s clear to see that the US is making a global power play for control over the world’s energy industry, which could very adversely affect Russia.

The multipolar Eurasian Great Power relies on its energy exports to advance its financial and geopolitical interests, though that might be more difficult to do despite its oil and gas partnerships with Saudi Arabia and Iran respectively (which are part of the country’s “balancing” strategy) in the event that the US’ Western Hemispheric-wide NASAPEC and its LNG alliance with Qatar are able to potently compete with it across this domain. The potential risk is that Russia could stand to lose out on a lot of long-term revenue if the US is able to manipulatively keep oil and gas prices low, which could combine with the increased costs associated with the New Arms Race brought about by Washington’s withdrawal from the INF Treaty to put immense pressure on Moscow to “compromise” with its chief geopolitical rival per the stratagem described by the author in his April 2018 piece about “What The US Really Wants From Russia”.

President Putin’s ultimate legacy rests on his ability to deliver on the many socio-economic promises that he made to his compatriots during his re-election campaign last year, though these were all predicated on the assumption that the future oil and LNG markets would remain stable and largely under Russia’s controlling influence, as well as the expectation that the country’s hypersonic missile advancements could deter the onset of a costly New Arms Race. The US’ aforementioned energy and military moves shattered those presumptions and could throw the Russian leader’s carefully crafted plans to improve the overall livelihood of all of his countrymen (especially the majority of the population that lives outside of its most developed cities of Moscow and St. Petersburg) into jeopardy, though right now this worst-case scenario is still far from certain pending the outcome of the Venezuelan Crisis, thus explaining why Russia is so eager to “mediate” between the government and “opposition”.

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This article was originally published on Eurasia Future.

Andrew Korybko is an American Moscow-based political analyst specializing in the relationship between the US strategy in Afro-Eurasia, China’s One Belt One Road global vision of New Silk Road connectivity, and Hybrid Warfare. He is a frequent contributor to Global Research.

The Untouchable US-Saudi Relation Is a Core Element of US Imperialism

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By Frederico Pierccini
Source

Nixon’s decision in 1971 to withdraw the United States from the gold standard greatly influenced the future direction of humanity. The US dollar rose in importance from the mid-1950s to become the world reserve currency as a result of the need for countries to use the dollar in trade. One of the most consumed commodities in the world is oil, and as is well known, the price is set by OPEC in US dollars, with this organization being strongly influenced by Saudi Arabia.

It is therefore towards Riyadh that we must look in order to understand the workings of the petrodollar. After the dollar was withdrawn from the gold standard, Washington made an arrangement with Riyadh to price oil solely in dollars. In return, the Saudis received protection and were granted a free hand in the region. This decision forced the rest of the world to hold a high amount of US dollars in their currency reserves, requiring the purchase of US treasuries. The relationship between the US dollar and oil breathed new life to this currency, placing it at the centre of the global financial and economic system. This privileged role enjoyed by the dollar allowed the United States to finance its economy through the simple process of printing its fiat currency, relying on its credibility and supported by the petrodollar that required other countries to store reserves of US treasuries in their basket of currencies.

This arrangement continued to sustain itself in spite of numerous wars (the Balkans, Iraq, Afghanistan), financial crises (the Black Monday of 1987, the Dotcom bubble of 2000, and Lehman Brothers’ subprime crisis of 2008), and the bankruptcies of sovereign states (Argentina in 1998). The explanation is to be found in the credibility of the US dollar and the US itself, with its ability to repay buyers of treasury bonds. In other words, as long as the US continues to maintain its dominance of the global financial and economic system, thanks to the dollar, its supremacy as a world superpower is hardly questioned. To maintain this influence on the currency markets and the special-drawing rights (SDR) basket, the pricing of oil in US dollars is crucial. This explains, at least partially, the impossibility of scaling down the relationship between Washington and Riyadh. Nobody should delude themselves into believing that this is the only reason why Saudi-US relations are important. Washington is swimming in the money showered by Saudi lobbies, and it is doubtful that those on the receiving end of such largesse will want to make the party stop.

The agreement made between Washington and Riyadh guaranteed that the latter would receive protection from the former and Washington would look the other way regarding Riyadh’s behavior within its kingdom and in the region – so long as Saudi Arabia sold its black gold in US dollars alone. This agreement was clearly a controversial one and has been kept away from the general public, even in the light of Khashoggi’s death and the liberal mainstream media’s piling on the Kingdom. Yet this is not the only reason why US-Saudi ties are so close. The initial agreements between the Saudis and the Americans concerned the petrodollar; but after the Islamic revolution in Iran in 1979 (Iran’s nationalist prime minister, Mohammad Mosaddegh, had been previously overthrown by the US and UK in 1953), Riyadh and Washington decided to declare war on their common enemy, with the hearty approval of Israel. The cooperation between Riyadh and Washington became even closer in the 1980s, through the common campaign against the USSR in Afghanistan through the use of jihadists recruited, trained and armed by the Pakistan, Saudi Arabia, and the US secret services. The use of jihadist terrorism as a geopolitical weapon has been a main feature of Riyadh’s statecraft.

The relationship between Saudi Arabia and the US evolved from a mere economic and protection agreement, to a full-fledged collaboration against the shared enemies of Washington, Tel Aviv and Riyadh, expanding on the existing cooperation since the 1980s of using jihadism to advance strategic objectives. The situation with Iran became of primary importance for US strategy in the region. Riyadh, with the passage of time, assumed a triple role, namely, that of being the guarantor of the petrodollar, a facilitator in the use of Islamic terrorism as a geopolitical weapon, and a regional opponent of Iran.

This relationship has been mutually beneficial. The House of Saud has been free to run its country according to the strict strictures of Wahhabism without Western interference; and Washington enjoys a capacity for unlimited military spending (especially after the 2008 crisis and the beginning of quantitative easing) simply through the printing of debt in the form of government bonds that are immediately acquired by other countries. Washington has effectively been printing waste paper and obtaining consumer goods in return, a state of affairs that has allowed the United States to squander six trillion dollars in wars in Iraq and Afghanistan without suffering significant economic consequences.

Ever since Donald Trump took over the White House, the process of de-dollarization that begun during the Obama era has only accelerated. With the unprecedented move in 2012 to remove Iran from the SWIFT international banking system, a dangerous precedent had been set that acted as a warning to the rest of the world. The United States revealed itself as willing to abuse its dominant position by wielding the dollar as a weapon against geopolitical adversaries.

The consequences of that action continue to be felt today. Many within the Western elite have come to recognize this mistake and are regretting it. Russia and China understood that they were next on the chopping block and set about creating alternative payment systems like CIPS that would serve to act as a backup system in case Washington tried to exclude Moscow and Beijing from the SWIFT system.

Trump contributed more than any of his predecessors towards further pushing the world in the direction of de-dollarization. Sanctions and tariffs have weakened confidence amongst US allies and forced the rest of the world to start looking for alternatives. The cases of Iran and Russia are instructive, with commercial exchanges being undertaken in currencies other than the dollar for a number of years now. There are dozens of other examples where the use of the dollar in commercial transactions has been abandoned. More complicated, however, is the financing of debt for private or public companies that often takes place in dollars. This exposes industries to a difficult situation in the event that their national currencies devalue against the dollar, making it more expensive to find the US dollars needed to repay creditors, leaving what are major national companies with the prospect of facing bankruptcy. As Russia learned in 2014 with the attack on its Ruble, exposure of potentially strategic sectors of the country to the economic influence of a foreign adversary should be avoided.

The push to renounce the use of the dollar in financial transactions also stems from the fear that the next financial crisis may affect global debt as expressed in dollars; not only destroying the US economy, but dragging down with it countries that are large holders of US treasuries. This is not speculation or conspiracy theory but simple deduction from observing the economic situation over the last 10 years. The global economy was saved in 2008 as a result of the confidence held by citizens following the intervention of central banks. The corrosive mechanism laid out by the Fed and its partners became evident months later. Central banks started printing unlimited amounts of money at 0% interest rates and furnishing it to banks and financial institutions to cover the debts left by the bursting of speculative bubbles like the one involving subprime mortgages.

The average citizen, seeing Bernanke and Draghi on TV talking about “unprecedented actions to save the system”, felt reassured, and therefore felt their money remained safe, in banks or in US dollars. The next financial crisis – potentially the worst ever – is likely to be caused by either the raising of interest rates by the Fed and other central banks, or from the popping of one of the numerous debt bubbles around. The central point is that the citizens’ belief in the system will be put to the test because, as Draghi said, “[this weapon of QE] can be used only once”. There is no protection for banks and speculative entities that could be in debt to the tune of many billions of dollars with no chance of survival.

With a view of to the possible collapse of the dollar-based financial system, several countries are selling their US government bonds, reducing their exposure and accumulating gold. This involves not just China and Russia, but even the European Union.

In such a situation, a crisis in relations with Saudi Arabia is unthinkable for Washington, especially when the region now seems to be guided by an axis that starts from Tehran and ends in Beirut, including Baghdad and Damascus. Riyadh is necessary for the Israeli strategy in the region, and Washington follows in tow for reasons related to the US dollar. Factoring the importance of Riyadh in supporting the petrodollar and in countering Iran in the region, it is not surprising why the Israeli lobby in Washington is doing its utmost to calm US senators down intent on punishing Riyadh for the Khashoggi affair.

If Saudi Arabia were really convinced of the innocence of MBS in the Khashoggi affair, it could use this situation to its advantage by reducing the role of Washington in its foreign policy. Turning to the east and increasing partnerships with China and Russia would have beneficial effects on the whole region, as well as reducing the importance of the United States in the world. Saudi Arabia is governed by a large family riven with divisions and feuds spanning decades. MBS has no interest in his kingdom and is occupied with his survival alone. He is aware that Netanyahu and Trump are his best bet for continuing to reign. Trump is equally aware of the importance of MBS in his communication strategy in the US, with a view to the midterm and the 2020 elections. MBS is for Trump the golden goose that finances the MAGA project, thanks apparently to Trump’s mesmerizing negotiation skills with the Saudis. Of course this is far from the truth, but what matters is the spin that Trump gives to this alliance.

Israel is the primary ally of MBS, given that the crown prince is the first Saudi monarch openly willing to establish diplomatic relations with the Jewish State and bring relations between the two countries out into the open. The upper level of the US government, the so-called deep state, tried for a few weeks to use MBS against Trump. But this strategy came to an end after the Israelis, together with some elements of the US deep state, saw the risk of downsizing the global relationship between Saudi Arabia and the US. MBS will hardly be pushed aside, and within the Kingdom his position seems firmer than many expected, as seen at the Davos in the Desert conference. Breaking up with MBS would have had unimaginable repercussions for the US’s hegemonic position, and this is something Washington can ill afford at the moment.

The use of jihadism and petrodollars as political and financial weapon against Washington’s adversaries is reason enough to quickly forget Jamal Khashoggi and go back to ignoring the various abuses committed by Saudi Arabia. In this phase of the transition from a unipolar to a multipolar world, the US cannot afford to renounce some of the most potent weapons in its arsenal to wield against its geopolitical foes.

Russia’s Poised to Reap the Rewards of the West’s Fallout with Saudi Arabia

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By Andrew Korybko
Source

Russian strategists must be rubbing their hands with glee as they watch the West sacrifice its strategic and highly profitable relationship with Saudi Arabia all because of Jamal Khashoggi, knowing full well that their country is more than capable of replacing its rivals in every single sphere of cooperation that they pull out of with Riyadh, which would resultantly reinforce Russia’s position as the supreme “balancing” force in 21st century Eurasia.

Suiciding A Slew Of Strategic Partnerships

It almost looks at this point like the West wants Russia to replace its strategic role in Saudi Arabia, at least judging by the self-inflicted damage that they’ve done to their own interests over the past couple of weeks since Jamal Khashoggi’s killing in his country’s Istanbul consulate. The circumstances surrounding it are unclear, but it’s looking ever more likely that a hostile “deep state” faction was behind his murder just like the author surmised in his earlier piece titled “Khashoggi Mystery: Rogue Killers Or Rogue Royals?”, though that still can’t be known for certain. Even so, it’s interesting to observe how many Western countries and companies decided to pull out of the Kingdom’s upcoming Future Investors Initiative, which is regarded as the so-called “Davos in the Desert”.

Even more stunning is the fact that many influential voices on both sides of the Atlantic are now calling for a suspension of their already agreed-upon weapons deals with Saudi Arabia, although Trump has thus far has been impervious to this pressure on the basis that one dead dissident isn’t worth sacrificing $110 billion worth of deals and potentially half a million jobs at home. The EU thinks differently, however, and Merkel announced that she’ll freeze arms shipments to Saudi Arabia as well as encourage her partners in the bloc to follow suit. All of this has combined to contribute to an environment of uncertainty where the Kingdom is no longer sure whether it can rely on its decades-long strategic partners, especially in respect to the military sphere.

Russia To The Rescue

Trump will probably hold firm and do whatever he can to retain his country’s strategic relationship with Saudi Arabia, but the ruling royals must realize at this point that he could always change his mind depending on domestic political considerations, to say nothing of overall international considerations. The Saudis don’t seem interested in making the first move away from America but will undoubtedly find a way to asymmetrically retaliate if the US ends up sanctioning it after the midterms. Bearing this backdrop in mind, the only responsible thing for Saudi Arabia to do is seek to strengthen its much more reliable relationship with its newfound non-traditional Russian partners, with whom it’s in the midst of a fast-moving and full-spectrum rapprochement.

Russia’s desire to become the 21st century’s supreme “balancing” force in Afro-Eurasia has seen it clinch a variety of military, energy, economic/investment, and diplomatic deals with Saudi Arabia in spite of the two previously being heated rivals during the 1980s War on Afghanistan and the early 2010s War on Syria, but both Great Powers have pragmatically matured to the point of understanding the need to turn the page on their storied relationship and start anew in the New Cold War. So close have they become in recent years that President Putin even agreed to provide Saudi Arabia with S-400 anti-aircraft missile systems, as well as Kornet-EM anti-tank missile systems, TOS-1A “Buratino” heavy flame systems, AGS-30 grenade launchers, and Kalashnikov AK-103 assault rifles during King Salman’s historic visit to Moscow in October 2017.

No Yielding Over Yemen

It doesn’t matter much to Russia that most of these munitions will probably be used in the War on Yemen since Moscow supports the Saudi position and is solidly behind the internationally recognized Yemeni government of President Hadi, which it still backs despite his unpopularity and purely because of the international legal principle of being against the Houthis’ militant overthrow of his government. Russia, unlike Western states, doesn’t place any political conditions on the purchase of its military equipment such as prohibiting their use in Yemen since Saudi Arabia’s activities there aren’t under UNSC sanctions. Moscow has expressed concern over mounting civilian casualties and is in favor of a political solution, but it has no interest imposing its desired vision on any of the warring parties.

Think what one may about that position, it’s nevertheless consistent with international law, for better or for worse. No resolutions were ever passed by the UNSC forbidding the sale of military equipment to Saudi Arabia, so while one may disagree with the ethics of doing so, there’s nothing “illegal” about it even though a convincing argument can be made that the entire War on Yemen is illegal and that the UNSC should have sanctioned Saudi Arabia and its allies because of it. Be that as it may, they didn’t, which is why Russia has no qualms about possibly expanding its weapons sales to Saudi Arabia to replace any contracts that the Kingdom might end up cancelling with its unreliable so-called “Western partners”, but it’s not all about Moscow making a quick buck.

“Military Diplomacy”, OPEC+, And Big Business Investments

Russia considers “military diplomacy” to be part and parcel of its envisioned 21st-century “balancing” act, to which end it regularly sells arms to competing pairs of countries such as Armenia & Azerbaijan, India & China, and China & Vietnam in order to maintain the strategic equilibrium between them that could hopefully prevent one side from gaining an edge over the other and aggressively commencing a war because of it. This contrasts with the US’ position of deliberately benefiting one side at the expense of another in order to spark this scenario to the benefit of its preferred regional partner. Considering the Mideast’s complicated geopolitics, it makes sense from Russia’s perspective why its strategists would like to include Saudi Arabia in its “military diplomacy” network for replicating this model between it and Iran.

Moving beyond the military realm and into the energy one, Russia and Saudi Arabia are already dominating the global oil market through their OPEC+ partnership, but this will increasingly come under threat as the US continues its rise as a formidable challenger to both of them. In regards to the economic/investment sphere, the large-scale exodus of Western participants from the forthcoming “Davos in the Desert” bodes extremely well for Russia because it allows the country’s businessmen to stand apart from the pack and draw attention to the fact that there aren’t any political strings attached to their prospective deals. This is extremely important because it could reassure Riyadh that whatever agreements it reaches with Russia would be respected no matter what happens inside of the Kingdom itself.

“Sword Dancing” For The S-400s?

The Russian President’s Special Representative for the Middle East and Africa, Deputy Foreign Minister Mikhail Bogdanovsaid as much at the beginning of this week when he remarked that

“the situation around the murder of journalist Jamal Khashoggi does not affect the planning of contacts between Moscow and Riyadh, including at the top level.”

Accordingly, it’s only natural that presidential spokesman Dmitry Peskov reaffirmed that “preparations for the visit of Russian President Vladimir Putin to Saudi Arabia are ongoing” after the Russian leader was invited to travel to the Kingdom by King Salman last year, where he last visited in 2007 when he received the prestigious Order of King Abdulaziz that was later also bestowed upon the likes of Obama and Trump.

President Putin is probably holding off on his visit until a number of big-ticket deals are officially clinched between the two Great Powers to serve as a productive reason for him to go there, such as finalizing the S-400 agreement and possibly even winning the bid to construct 16 nuclear power plants in the Kingdom. Furthermore, given the intense backchannel diplomacy between Russia and Saudi Arabia over Syria, it can’t be precluded that President Putin might be waiting for the fruits of their efforts to lead to a breakthrough in the Arab Republic that he can celebrate with King Salman, though it’s unlikely that he’d allow the media to capture him on camera performing a “sword dance” like Trump did if he was invited by his jubilant host to do so.

Concluding Thoughts

Russia is poised to reap the rewards of the West’s self-inflicted damage to its strategic and highly profitable relationship with Saudi Arabia, which has been unprecedentedly undermined by the killing of a single dissident even though they ignored the deaths of thousands of civilians in Yemen. The trans-Atlantic divide between the US and the EU couldn’t be sharper in this context because Trump is doing all that he can to resist “deep state” and grassroots pressure to cancel his country’s $110 billion arms deal with Saudi Arabia while Merkel is leading the way in trying to get all EU countries to immediately suspend their weapons contracts with the Kingdom. The unexpected political instrumentalization of these agreements has put Saudi Arabia on edge and prompted it to strengthen ties with its non-traditional partners in Russia instead.

To its pragmatic credit, Russia hasn’t once interfered with any of the many controversial events that characterize Saudi domestic politics, instead consistently remaining loyal to its policy of political non-interference in domestic affairs unless the interests of its compatriots are at stake. While this stance might have earned it heavy criticism in some corners for supposedly “turning a blind eye to Saudi crimes”, it’s nevertheless proven its strategic effectiveness by attracting Saudi Arabia’s attention as Riyadh seeks to replace many of its former “Western partners” with Russia after the sudden rift that developed between them. If the current trajectory continues, then the two Great Powers might very well be on their way to clinching a formal strategic partnership that could see President Putin travel to Riyadh as part of a victory lap for signing the most symbolic agreements.

“PUTIN IS NOW THE WORLD’S ENERGY CZAR”

“Putin is now the world’s energy czar”

“PUTIN IS NOW THE WORLD’S ENERGY CZAR”

25.11.2017

Organization of Petroleum Exporting Countries’ most powerful internal alliance, bringing together the oil producer group’s Gulf members, is disintegrating fast. As a six-month-old spat between Saudi Arabia and Qatar deepens, the organization’s Gulf ministers will have to scrap their tradition of meeting behind closed doors to agree policy before OPEC holds its twice-yearly talks, OPEC sources say.

“We used to have a WhatsApp group for all ministers and delegates from the Gulf. It used to be a very busy chat room. Now it’s dead,” said a senior source in the Organization of the Petroleum Exporting Countries.

Four other sources told Reuters that there had been no official contact on oil policy between the Gulf Arab nations, in a grouping known as the Gulf Cooperation Council (GCC).

The GCC includes OPEC members Saudi Arabia, the United Arab Emirates, Kuwait and Qatar and non-OPEC Oman and Bahrain. OPEC meets on November 30 in Vienna to decide whether to extend global output cuts beyond March. Saudi Arabia and the UAE cut ties with Doha in June, saying Qatar backed terrorism and was cozying up to rival Iran. Qatar rejected the accusation.

“The ministers can’t meet,” another OPEC source said. “They may relay the message through the Kuwaiti or the Omani oil ministers, but Saudi and the UAE cannot meet publicly with the Qataris.”

Kuwait and Oman have refrained from taking sides in the dispute, over which Kuwait’s Emir Sheikh Sabah has led regional mediation.

None of the OPEC sources suggested the Qatar crisis would derail a widely expected decision by OPEC to extend price-boosting output cuts until the end of 2018, as almost all producers agree on the need to maintain policy. But dialogue within OPEC is likely to be complicated as the stand-off strikes at the heart of OPEC’s efforts to form a united front to stabilize a fragile oil market. It may also weaken the group’s Sunni faction at a time when predominantly Shi‘ite Iran and Iraq are raising their game.

”If the GCC is dead politically, then it will certainly have implications for OPEC policies. Not that it will necessarily disrupt decision-making, but it is making it more challenging and complicated,” the senior OPEC source said. “Qatar is not talking to the Saudis or the UAE, so OPEC’s Sunni wing is weaker. On the other hand you have the rapprochement between Iran and Iraq, a Shi‘ite alliance long in the making,” the senior source added.

As OPEC president in 2016, Qatar was instrumental in bringing together oil producers — including non-OPEC Russia — to agree to the supply-reduction deal. Since engineering Russia’s pact with the OPEC to curb supplies a year ago, Putin has emerged as the group’s most influential player. As one senior OPEC official put it on condition of anonymity, the Russian leader is now “calling all the shots.”

“Putin is now the world’s energy czar,” said Helima Croft, a former Central Intelligence Agency analyst who directs global commodity strategy at RBC Capital Markets LLC in New York.

The current prices and geopolitical realities suggest the accord will be rolled over, according to Edward C. Chow, a fellow at the Center for Strategic and International Studies in Washington and a former Chevron Corp. executive.

“It’s mutually beneficial,” Chow said. “The Saudis need a large oil-producing partner to effectively influence the market and the potential for a greater geopolitical and economic role in the Middle East for Russia makes compliance with production cuts an expedient move for Moscow.”

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