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Saudi Arabia and Iran: A Balance of Power

Luis Durani

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The execution of Sheikh Nimr al Nimr by Saudi Arabia is heating up the Cold War in the Middle East. The tension between Saudi Arabia and Iran has been ratcheting up since the overthrow of Saddam Hussein. But more so, the recent Iranian nuclear deal has begun to change the geopolitics of the region forever.

The latest execution of the leading Shiite cleric in Saudi Arabia was intended to ruffle feathers in Tehran and provoke a reaction. Iran responded just like Saudi Arabia wanted. Under the leadership of King Salman, the foreign policy of Saudi Arabia reflects one of a paranoid regime that is potentially on the precipice of collapse due to falling oil prices and slowly being eclipsed by Iran.

What Has Happened So Far

Ever since the implementation of the Petrodollar pact, the security guarantor for Saudi Arabia has been the US. But with the removal of Saddam in 2003, the regional balance of power was perturbed. The new government in Iraq represented the Shiite majority and many within the government had links to Iran. A new era of Iran-Iraq relations were ushered in to the detriment of Saudi Arabia. The Iraqi wall that circumscribed Iran had crumbled and allow for the Shiite expansion into the Levant. Iran was granted unhindered access to its allies in Syria and Lebanon through Iraq, creating a “Shiite Crescent”. This northern expansion has created a perceived semi-encirclement of Saudi Arabia.

All the while this was happening; the US began to pivot away from the Middle East to East Asia under a new strategic imperative. These dramatic changes have made the royal family uneasy about the US security commitment to the regime. To exacerbate a tense situation, the Arab Spring made the Saudis began to realize that there was an internal existential threat to their hold on power.

The Saudi royal family became proactive in matters dealing with its security. It needed to rebalance power in the region in order to prevent an Iranian hegemony from establishing and subdue any internal dissent. In order to quell the internal outrage, the government increased subsidies to its citizens and imprisoned many who were Shiite. Next, the Saudi military intervened in Bahrain to quell an uprising by the Shiite majority against its Sunni rulers. The rebellion was suppressed but the Saudis suspected Iranian involvement behind the rebellion.

Soon thereafter, Yemen began to fall into disarray as different factions began an uprising against the dictatorship of Saleh. When the Houthi rebels, Shiite tribesmen backed by Iran, began to make advances towards the capital, Saudi Arabia once again got involved in hopes of crushing yet another Shiite rebellion at its doorstep. Except this time it appears Saudi Arabia has created a quagmire of its own. The costly foray has begun to take its toll on the interventionist Saudi foreign policy. While its forces are bogged down in Yemen, Saudi Arabia’s backing of Syrian rebels against Assad has fallen to the wayside as the world unites to battle ISIS. The Saudi-led initiative to remove Assad has failed.

The final ingredient for the perfect storm has been the dramatic decline of oil prices. When the price of oil began to fall in late 2014, it was due to an oversupply in the world markets and a weakening demand. But there was a way out, Saudi Arabia, the nation with the largest oil reserves, could have reduced supplies, which in turn would raise prices but they did not. The rationale behind this move was to regain market share rather than profits by eliminating all the American shale producers who had become a threat to the Saudi oil supply. The US, who was once the primary recipient of Saudi oil, is on the path to becoming a major exporter herself. In a bid to outdo the US producers, Saudi Arabia engaged in a game of chicken to push prices as low as it can go to drive all competition out. But there has been blowback, the falling prices have caused the Saudis to go into deficit spending and diminished its cash reserves. The continued low prices are causing internal pressures within the country to arise. There are rumblings of a potential Saudi collapse, which can have devastating effects for the region as well as US strategic interest. With all the short comings going on with its policies, the Saudis are looking for a way to divert attention from them.

Rally Around the Flag

The best way for the regime to distract attention is to create a wag the dog effect. The Saudis knew the execution of its Shiite cleric Sheikh Nimr would create a firestorm. The outcome was exactly what they desired; protest around the Shiite world and especially in Iran where the Saudi embassy was burned. This action set in motion a diplomatic tit for tat, which further caused a wider rift between the Saudis and Iranians. To further inflame tensions, a Saudi missile “accidently” struck the Iranian embassy in Yemen. This back and forth between the two nations is exacerbating tensions in an already anxious region of the world. But the winners in all this is the Saudi royal family who are able to shift focus to Iran from its recent foreign failures in Yemen and Syria as well as its internal economic bubble.

The Saudi regime is acting “irrationally” in order to take measures it perceives necessary to prevent its own collapse. With the fall of Iraq and the nuclear deal, the balance of power has begun to shift in Iran’s favor. The Saudi attempt to rebalance power in the region has caused it to go further to the brink of collapse by its recent short comings. As the US slowly withdraws from the region and oil prices continue to tumble, Saudi Arabia finds itself cornered. Its foreign policy is being driven with a sense of urgency based on a paranoid belief that its collapse is imminent. Thus, it can be expected that provocative actions in the form of military or economic by Saudi Arabia can be a norm in order to shift attention from its short comings until its house is back in order or the regime collapses.

Luis Durani is currently employed in the oil and gas industry. He previously worked in the nuclear energy industry. He has a M.A. in international affairs with a focus on Chinese foreign policy and the South China Sea, MBA, M.S. in nuclear engineering, B.S. in mechanical engineering and B.A. in political science. He is also author of "Afghanistan: It’s No Nebraska – How to do Deal with a Tribal State" and "China and the South China Sea: The Emergence of the Huaqing Doctrine." Follow him for other articles on Instagram: @Luis_Durani

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Middle East

US-Iran Tension: Avert any big disaster to humanity

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US-Iran tension is growing to a dangerous level. Irrespective of who is right and who is wrong, but everyone agrees that it is leading toward a big disaster. Human life and natural resources are at stake. Irrespective, who will suffer more and who will suffer less, but it is human life, which is the most precious thing in this world, is at stake.

Middle-East is an oil and gas-rich area and meets the major portion of world energy demand. Any disturbance in this region will have a severe impact on the global economy. Whether one is right or wrong, will be the victim of this crisis directly or indirectly.

This war will be not like the Iraq war or the Libya War. As at that time, there was only one superpower and the world was unipolar. There was no resistance from any corner of the world. US and allies, without any resistance, conducted the war and achieved their desired results. But a lot of resistance was witnessed in case of Syrian War. The whole scenario has been changed, the calculated results were not achieved yet. Finally, the US has decided to pull back its troops. Similarly, Afghanistan case is not ideal, after spending trillion dollars, and fighting for 17 years, not gains on the ground and finally has to pull back.

It may not be limited to only US-Iran but may engulf the whole region. As traditional rivals are waiting for an appropriate opportunity to settle their old disputes. Whether, it is Arab-Iran, or Israel-Iran, or Arab-Israel enmity, may it spread to a much wider sphere than expected. It is in control of a few countries to start or refrain the escalation, but once it has been broken, it may be beyond the control of either country.

Especially, Russia and China are not sleeping at this time. They are in a strong position to offer resistance. It should not be taken an easy task like Iraq or Libya war. It is difficult to predict the exact reaction of Russia or China, but anticipated resistance.

If we expect, US or Iran to avert this foreseeable war will be not a realistic approach. As if they were to avoid any disaster, they should not have created so hype and should not have moved to this stage. They may not accept total hegemony of the US in this part of the world. They have heavy stakes in the middle-East and cannot be spectators only.

Geopolitics has been changed, regional alliances have emerged, and nations have re-aligned themselves. Much more complex changes have been witnessed after the war on terror. Public awareness has been enhanced, maybe some of the governments in this region have a different outlook, but public opinion is much more realistic and may play a vital role in the days to come. Old time’s friends may stand on the other side of the table. Some radical changes may be visible on grounds.

UN role was ineffective in the past and a little is expected in the future. In fact, the UN has been hijacked and curtailed to a very limited role practically. While one of its major mandates was to resolve the disputes among nations and avoid wars or war-like situations.

Under this serious scenario, there is a hope that all peace-loving nations and individuals, may peruse the UN and International Community do something to avert this bid human disaster.  We all share one world, we have the responsibility to save this world. Any loss of human life in any part of the world is considered the loss to the whole of humanity. And the destruction of natural resources may be considered a loss to humanity. Any damage to Environment or ecology or biodiversity may be a net loss to humanity. We all are son and daughter of ADAM and share a common world, common environment, common resources. We need to protect humanity, environment and natural resources.

It is strongly appealed to the UN, International Community and all individuals who believe in Peace, must act, and must act now, and must act strongly, to avert any bid disaster to humanity.

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Middle East

Chinese purchases of Iranian oil raise tantalizing questions

Dr. James M. Dorsey

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A fully loaded Chinese oil tanker ploughing its way eastwards from two Iranian oil terminals raises questions of how far Beijing is willing to go in defying US sanctions amid a mounting US military build-up in the Gulf and a US-China trade war.

The sailing from Iran of the Pacific Bravo takes on added significance with US strategy likely to remain focused on economic rather than military strangulation of the Iranian leadership, despite the deployment to the Gulf of an aircraft carrier strike group as well as B-52 bombers and a Patriot surface-to-air missile system.

As President Donald J. Trump, backed by Secretary of State Mike Pompeo, appears to be signalling that he is not seeking military confrontation, his administration is reportedly considering a third round of sanctions that would focus on Iran’s petrochemical industry. The administration earlier this month sanctioned the country’s metals and minerals trade.

The sailing raises the question whether China is reversing its policy that led in the last quarter of 2018 to it dramatically reducing its trade with Iran, possibly in response to a recent breakdown in US-Chinese trade talks.

“The question is whether non-oil trade remains depressed even if some oil sales resume, which I think it will. That’s the better indicator of where Chinese risk appetite has changed. Unfortunately Iran‘s reprieve will be limited—but better than zero perhaps,” tweeted Esfandyar Batmanghelidj, head of Bourse & Bazaar, a self-described media and business diplomacy company and the founder of the Europe-Iran Forum.

A Chinese analyst interviewed by Al Jazeera argued that “China is not in a position to have Iran’s back… For China, its best to stay out” of the fray.

The stakes for China go beyond the troubled trade talks. In Canada, a senior executive of controversial Chinese telecommunications giant Huawei is fighting extradition to the United States on charges of violating US sanctions against Iran.

Reports that Western companies, including Kraft Heinz, Adidas and Gap, wittingly or unwittingly, were employing Turkic Muslims detained in re-education camps in China’s north-western province of Xinjiang, as part of opaque supply chains, could increase attention on a brutal crackdown that China is struggling to keep out of the limelight.

The Trump administration has repeatedly criticized the crackdown but has stopped short of sanctioning officials involved in the repressive measures.

Bourse & Bazaar’s disclosure of the sailing of the Pacific Bravo coincided with analysis showing that Iran was not among China’s top three investment targets in the Middle East even if Chinese investment in the region was on the rise.

The Pacific Bravo was steaming with its cargo officially toward Indonesia as Iranian foreign minister Mohammad Javad Zarif was touring his country’s major oil clients, including China, in a bid to persuade them to ignore US sanctions.

A second tanker, the Marshal Z, was reported to have unloaded 130,000 tonnes of Iranian fuel oil into storage tanks near the Chinese city of Zhoushan.

The Marshall Z was one of four ships that, according to Reuters, allegedly helped Iran circumvent sanctions by using ship-to-ship transfers in January and forged documents that masked the cargoes as originating from Iraq.

The unloading put an end to a four-month odyssey at sea sparked by buyers’ reticence to touch a cargo that would put them in the US crosshairs.

“Somebody in China decided that the steep discount this cargo most likely availed … was a bargain too good to miss,” Matt Stanley, an oil broker at StarFuels in Dubai, told Reuters.

The Pacific Bravo, the first vessel to load Iranian oil since the Trump administration recently refused to extend sanction exemptions to eight countries, including China, was recently acquired by China’s Bank of Kunlun.

The acquisition and sailing suggested that Bank of Kunlun was reversing its decision last December to restrict its business with Iran to humanitarian trade, effectively excluding all other transactions.

The bank was the vehicle China used in the past for business with Iran because it had no exposure to the United States and as a result was not vulnerable to US sanctions that were in place prior to the 2015 international agreement that curbed Iran’s nuclear program.

China’s willingness to ignore, at least to some extent, US sanctions could also constitute an effort to persuade Iran to remain fully committed to the nuclear accord which it has so far upheld despite last year’s US withdrawal.

Iran recently warned Europe that it would reduce its compliance if Europe, which has struggled to create a credible vehicle that would allow non-US companies to circumvent the sanctions, failed to throw the Islamic republic an economic lifeline.

In a letter that was also sent to Russia and China, Iran said it was no longer committed to restrictions on the storage of enriched uranium and heavy water stocks, and could stop observing limits on uranium enrichment at a later stage.

Russian president Vladimir Putin warned in response to the Iranian threat that “as soon as Iran takes its first reciprocal steps and says that it is leaving, everyone will forget by tomorrow that the US was the initiator of this collapse. Iran will be held responsible, and the global public opinion will be intentionally changed in this direction.”

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Middle East

The Iran Question

Dr. Arshad M. Khan

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Will there be war with Iran?  Will there not be war with Iran?  The questions are being asked repeatedly in the media even though a single carrier task force is steaming up there.  The expression is old for the latest carriers are nuclear powered.  Imagine the mess if it was blown up.

There are two kinds of weapons in the world … offensive and defensive.  The latter are cheaper, a fighter plane compared to a bomber.  If a country does not (or cannot afford to) have offensive intent, it makes sense to focus on defense.  It is what Iran has done.  Moreover, its missile centered defense has a modern deadly twist — the missiles are precision-guided. 

As an Iranian general remarked when questioned about the carrier task force:  some years ago it would’ve been a threat he opined; now it’s a target.  Iran also has a large standing army of 350,000 plus a 120,000 strong Revolutionary Guard and Soviet style air defenses.  In 2016 Russia started installation of the S-300 system.  It has all kinds of variants, the most advanced, the S-300 PMU-3 has a range similar to the S-400 if equipped with 40N6E missiles, which are used also in the S-400.  Their range is 400 km, so the Iranian batteries are virtually S-400s.  The wily Putin has kept trump satisfied with the S-300 moniker without short-changing his and China’s strategic ally.  The latter continuing to buy Iranian oil.

Iran has friends in Europe also.  Angela Merkel in particular has pointed out that Iran has complied fully with the nuclear provisions of the UN Security Council backed Joint Comprehensive Plan of Action i.e. the Iran nuclear deal.  She is mustering the major European powers.  Already alienated with Trump treating them as adversaries rather than friends, they find Trump’s bullying tiresome.  President Macron, his poll ratings hitting the lowest, is hardly likely to engage in Trump’s venture.  In Britain, Theresa May is barely able to hold on to her job.  In the latest thrust by senior members of her party, she has been asked to name the day she steps down.

So there we have it.  Nobody wants war with Iran.  Even Israel, so far without a post-election government does not want to be rained upon by missiles leaky as its Iron Dome was against homemade Palestinian rockets.

Topping all of this neither Trump nor Secretary of State Pompeo want war.  Trump is as usual trying to bully — now called maximum pressure — Iran into submission.  It won’t.  The wild card is National Security Adviser John Bolton.  He wants war.  A Gulf of Tonkin type false flag incident, or an Iranian misstep, or some accident can still set it off. 

In Iran itself, moderates like current President Hassan Rouhani are being weakened by Trump’s shenanigans.  The hard liners might well want to bleed America as happened in Iraq and Afghanistan.

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