Connect with us

Middle East

Iran, Syria and Saudi Arabia

Published

on

First and foremost, it is worth analyzing what the lifting of sanctions on Iran really means for Iran and the West.

The announcement made on January 16 last by the Iranian Shi’ite government and the P5 + 1 regarding the lifting of sanctions means that the IAEA has acknowledged that Iran has complied with all the terms and conditions of the JCPOA Treaty on the elimination of nuclear weapons and the control of the nuclear power for civilian uses by the Shi’ite regime (yet there would be much to add in this regard).

It is a decision resulting more from the Western economic crisis than the real Iranian willingness to stop its military-civilian nuclear activities. Nevertheless the Western geoeconomic collapse is now so fast that every global strategic choice must be sadly subjected to the needs of the economic and political survival of our social systems.

The EU, US and UN sanctions have now been basically lifted, especially with regard to the financial, transport, logistics and energy sectors, while the US embargo on Iran is still in place.

In this connection, data and statistics are more important than usual: so far the Iranian companies removed from the sanctions list are 278 in the transport sector; 114 in the energy sector; 16 in the fields of engineering, construction and manufacturing; 20 in the trading sector; 53 in the activities related to the nuclear cycle and finally 111 in the financial and insurance sectors.

Moreover, further 600 individuals and small to medium size companies have been removed from the list of sanctions on Iran.

About half of these 600 natural and legal persons operate in the transport sector, a fundamental sector for a nation like Iran whose economy is linked to oil.

In particular the Islamic Republic of Iran Shipping Lines, the National Iranian Tanker Company and their offices and affiliated companies.

In percentage terms, the lifting of sanctions has placed back on the scene 20% of Iranian energy companies, as well as 20% of its banks and insurance companies and only 9% of its companies working in the nuclear sector.

The remaining companies operate in the trading, engineering, construction, manufacturing and the import-export sectors.

Many of these companies, however, result to be still active in Iranian missile or anyway military activities. Several banks to which now sanctions are no longer applied still have ties with the covert networks of nuclear procurement, while other companies have been used as a cover for secret nuclear activities not declared to the IAEA.

It is worth recalling that, in accordance with the JCPOA agreement, Iran can still prevent the Vienna Agency’s visits and inspections to the sites having “military relevance” and, in any case, even the AIEA experts must be subjected to the Iranian government’s acceptance.

For the EU, however, the following transactions were excluded from the previous sanctions; the transfers of funds and the financial and banking exchanges and transfers between European and Iranian entities; the banking activities, with the possibility for the Iranian credit institutions to open branches in the EU region; insurance and reinsurance activities for the Iranian companies operating in Europe; the imports of oil, gas and petrochemical products from Iran; the EU investment in the Iranian mining sector; all the shipping and shipbuilding activities; the exports of gold, gems and coins, in which Iran is rich at least since the time of the Thousand and One Nights.

The United States have lifted their sanctions on Iran and on the non-US companies working with Iran, especially in the hydrocarbon sector, although a clear US government’s ban remains for US assets and individuals to still operate with the Iranian government.

However the sanctions list by sector is largely similar to the list we have already seen for the European Union.

Nevertheless the United Nations have retained the embargo on 36 natural and legal persons, while the sanctions regime remains in place for conventional weapons (lasting five years) and for the technologies regarding ballistic missiles (lasting eight years). Obviously also the restrictions on the nuclear-related technologies are maintained.

It is worth noting that, despite the P5 + 1 agreement, there are hundreds of Iranian natural and legal persons that have not been removed from the sanctions list.

They include 86 natural or legal persons for the United Nations, including the Bank Sepah; over 150 natural and legal persons for the European Union, including banks and oil trading companies, as well as over 160 for the United States.

Obviously many of these entities can be found in all the various lists.

So far we have provided the essential data to understand the issue. But what will be the geostrategic impact of the new interaction between Iran and the Western powers of the P5 + 1 agreement? As we all know, we are now faced with a situation of plummeting oil prices.

Certainly Iran plans to flood and invade the global markets with huge amounts of oil and gas but, in this case, the clash between the country of reference of the “Party of Ali” and the country of reference of Wahhabi and Sunni purism, namely Saudi Arabia, could be turned from peripheral tensions – managed by proxies, such as the Yemeni Houthi for Iran or the “moderate” jihadists in Syria – into a direct war between the two entities of Islam.

Some experts estimate that the excess of oil production in the world amounts to 9-12 million barrels per day and, as is well-known, this has been lasting for 16 months approximately.

The United States have endeavoured to reduce prices with a view to destabilizing the economy and hence the Russian power projection between Ukraine and Syria. Saudi Arabia wants the fall of crude oil price to prevent the rise of the US shale oil which, in fact, needs a minimum price of 50 US dollars per barrel to break even the extraction costs. The European Union is floundering in an economic crisis and can afford only a smaller amount of oil.

It is a perfect geopolitical storm: the greater the fall in prices, or their irrelevance compared to costs (which is the real problem), the greater the internal competition among producers.

The oil demand has been falling since mid-2014 and Europe is cutting demand substantially, while the United States extract ever more shale oil and China reduces its oil imports.

If OPEC had read only the manuals of liberal neoclassical economics, it would have reduced extraction so as to keep prices high.

Conversely, Saudi Arabia has decided to increase extraction not to keep prices high (Saudi Arabia reaches the breakeven point with a price of 100 US dollars per barrel), but only to retain its market share.

Hence the ground for the war between Iran and Saudi Arabia will be the destruction or the driving away from the market – with terrorist and jihadist actions – of their respective allies having an oil-dependent economy.

The other variable is the rapid recovery of the Chinese economy, which could make prices increase beyond such a limit as to avoid a direct or indirect war between Shi’ites and Sunnis.

Currently China’s imports have increased by approximately 8% as against last year, but China is a major customer for Iran, for obvious technical and geopolitical reasons, while Saudi Arabia still is the second largest oil exporter to China. The first is the Russian Federation.

Moreover President Xi Jinping has further improved the Sino-Saudi relations, thanks to the visit he has paid this month to the Middle East.

Obviously China does not want the destabilization of the Greater Middle East and it is distributing its cards among all players so as to be the final broker of the new regional balance.

Indeed, this is the reason why Russia is actively mediating between Iran and Saudi Arabia so as to avoid both the confrontation and the expansion of the proxy wars which, in the Russian perspective, only benefit “NATO and the West.”

If the OPEC Islamic region set fire, what would happen to the Russian oil transport lines from Central Asia?

Furthermore, in view of the lifting of international sanctions, Iran has repeatedly stated that its oil will be managed on the market in such a way as to prevent further falls in oil prices.

Hence, as Iran has already maintained, it will produce “as much as the market can absorb”. But certainly it cannot help affecting the Saudi market area.

Nevertheless, there is a variable: the demographic and religious distribution of the Saudi population.

The Shi’ites living in Saudi Arabia are approximately eight million and are concentrated in the Eastern areas, where the headquarters of Saudi Aramco are located (in Dahran), as well as the largest oil field in the world, namely Ghawar, and the largest global terminal, namely Ras Tanura, in addition to the refinery of Abuqaiq, which is the largest one of the whole OPEC system.

The Shi’ites are the overwhelming majority of workers processing crude oil in the region and will be – or probably already are – “managed” by the Iranian brothers.

It is not hard to imagine what would happen if a Shi’ite uprising in Saudi Arabia’s Eastern province destabilized the production of the first OPEC country and added the largest oil production in the world to the Shi’ite economic and decision-making system.

However, keeping prices low allows to dispose of stocks more quickly.

Hence if Saudi Arabia keeps prices low to expand its market share, which is of primary importance compared to profitability, it is likely it wants direct confrontation with Iran.

According to the analysts of many Western merchant banks, the scenario of a real war between Iran and Saudi Arabia could lead to an immediate price peak of 300 US dollars per barrel, before stabilizing at 100 US dollars, which is the profitability limit of Saudi Arabia’s production.

It is worth recalling that Iran has a profitability level higher than Saudi Arabia’s. And this is a significant factor to assess the duration – and hence the winner – of the confrontation.

In a conference held last year with the major oil extraction companies worldwide, Iran decided to change the crude oil commercial rules, by allowing the booking of reserves though maintaining the ownership of soil.

Iran will attract at least 30 billion US dollars of investment in its oil, with 25-year contracts for the foreign companies extracting in the new oil fields and some offsetting mechanisms for price fluctuations.

Despite sanctions, Iran is the second largest economy in the Middle East and the seventh in Asia as a whole. We can imagine what might happen after the lifting of sanctions.

It is a struggle for hegemony over oil, through which the world and Western economies are controlled and governed and – subject to the careful Russian mediation and China’s balanced policy between the parties – nothing prevents the worst from happening.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

Continue Reading
Comments

Middle East

Reigniting Chaos in Syria

Published

on

Syria has been the nexus of brutality and terror for almost a decade now; with more than 6 million natives who have already fled and numerous displaced over the territory itself, the region casts a ghastly shade that has only turned grimmer with time. Although the conflict seemingly raved its catastrophic footprint in early 2000, the root cause arguably always ends up to be the infamous ‘Arab Spring’ that actually tuned the Syrians against their very own regime. Something to compare and contrast that communal unity acted in Iraq’s benefit back when USA invaded the territory to avenge the 9/11 Attacks in 2003 while casted a fiasco in Syria when invaded in 2014. Large scale protests and rampaging violence gradually morphed into a series of relentless efforts to first deter Bashar Al-Asad’s efforts to first peacefully and then collaboratively resolving the raging unrest. Some would say it was inspired by the historical besiege of Libya and the subsequent execution of the Libyan prime minister Muammar al-Gaddafi as an ensue of that revolution yet Bashar Al-Asad proved a far more tensile force to overthrow. Such tumultuous turn of events, lead Syria to first economic sanctions followed by severe isolation in the global community opposing and downright rejecting Assad’s actions to curb the political tremors. Yet intermittent interventions, both implicit and explicit, by the western powers and their counter-parts have defined the region more as a battle ground of mercenary motives instead of mere efforts to safeguard human rights and ensuring regional peace.

Since 2011, three core actors have remained active in skirmishes that have more oftener than not transformed into battles of gore and toil and sometimes even full-fledged wars that have not only dismembered the expanse of over an 185,000 kmof land into mounds of dust and rubble with terror now crawling over the lanes but have even shuddered the immediate vicinity. With the downfall and perpetual dissipation of ISIS, losing much of its occupied land to active contenders, Assad’s militia and Kurdish forces remain the helming competitors along with a smattering of other oppositions like Jaish al Fateh and Nusrta Front. The conflict between the Kurdish forces backed by the US regime against ISIS and then eventual betrayal on the Turkish front had been a matter of contentions in the latter part of 2019; Kurds making it abundantly clear to harness the borders they surmise to be rightly theirs while Turkish policies, especially under Turkish President Recep Tayyip Erdoğan, have been outright fearless and needless of any other inference regarding their austere stance over the issue; claiming their bordering territories and inferring stern response in case of any dissension caused by the Kurds.

However, the outlining threat in the recent time can be perceived at a novel yet a totally realistic stage, where proxy wars no longer remain the ground reality of armed unrest in Syria. This notion has arisen since harsh words were exchanged between Moscow and Ankara; the metropolis’ of the neighbouring giants: Russia and Turkey respectively. A glimpse in the historical scaffolding of the entire Syrian conflict, Russia has always backed Assad’s regime despite its initial block over Syrian policies revolving over strategies to deal with the blooming protests in the early tremors of the Arab Spring who’s effects had started to resonate in the entire Middle East following up on Ground 0, Tunisia. The vantage point of Russia, however, shifted when the political paradigm was drastically nudged by the terror-driven escalation of ISIS after severe US blunders and baffling retreat from Syria that even threatened the sovereignty and security of the region following their besiege of the state of Raqqa, establishing ISIS as a looming concern, thereby aligning the aims of both Russian reign and Assad’s regime, ultimately inciting a continued alliance. Turkey, on the other hand, being the northern neighbour to Syria also contended as a root protagonist in economic isolation of Assad’s government, imposing stringent financial sanctions that tightened the bottlenecks and eventually led to the deterioration of their financial virility that already staggered after sanctions and embargos placed by both EU and USA.

This conflict that permeates in the north-western terrain of Syria lilts an innuendo that a spark may be brewing between the two nations. The besieged province of Idlib exudes the source of the strife; an area that has witnessed countless Turkish troops slain by Assad’s forces in cross-border disputes; close to seven Turkish soldiers were recently killed in a thorough retaliation of Syrian forces in the de-escalation zone, much to Turkey’s dismay. However, the Russian involvement in backing the Syrian government in their dissent in Idlib and heavily bombing of the territory with artillery servers as a link to presumably leading a head-on conflict between Russia and Turkey; hinted by Erdoğan that any effort made in the region will not go answered, clearly warning the Russian forces to avoid any transgression that could cause fatality to their personnel. The people of Syria, blended with the rebels, look in the eye of a dead end; bombardments to deter the tyrants have shredded their innocent bodies similar to the incursions in Eastern Ghouta and with no one on their side but with ulterior incentives, they are left with no choice but to see Turkey as a savior. To any sane mind, however, its not really a complex interface of modes and interests involved. With clash of alliances, historical narrative of both the world wars fought, coherently brings about the model of war despite a never-ending argument at whim. Without contesting any theory by any analyst, its imperative to gauge at the systematic progression of the tensions flowing yet not mitigating. Turkey being stranded from its western allies and Arab assistance in wake of the murder conspiracy and being locked in a bound-to-doom NATO relation with Russia, the outcome of this steady conflict can bring about equal amount of damage yet in lesser of a decade and more pandemic effects.

Recent Israeli airstrikes targeted the Iran-linked elements in Syria. One of the biggest attacks even in at least half a decade period of relative dormancy in the region hint at the start of something gruesome. The attacks pointed Iran-backed sites like Al-Bukamal in intensity, riddling the city that acts as a focal point to Iran’s influence over and beyond the borders of Baghdad and Damascus, as well as paving way to militants from the fore stretch of Lebanon. The attacks reportedly served as an active Israeli position against the Irani militants and revolutionary guards, casting a heavy presence in the core hit areas of the province of Dair al Zor, claiming 57 casualties. The attack assumes a step-up stance of Israel picking up from a cold targeted strike within Iran, months back, eliminating the crucial scientific figure of Iran, that earned promises of retaliation both from the military leads and the supreme leader of Iran, Ayatollah Ali Khamenei.

These attacks nurture an underlying message of Israel following on the shadow war footsteps dictated under the premiership of Mr. Donald Trump. Now, with his nefarious exit from the presidential office following the riots at US Capitol and Mr. Biden’s ascension to power just days away, Israel insinuates its true deterrence of Iran’s growing influence and hostility in the expansive areas of Southern, North-western and Eastern regions of Syria. With US intelligence cultivating the Israeli position in Syria while Iran enriching its plans of Nuclear power along with backing militias under the lead of Lebanese force of Hezbollah, a possibility of another proxy clash is re-emerging in the peripheries of Syria. Now as Israel continues to welcome Arab nations to set camp around Syria to end Tehran’s influence, US faces a tough choice in over a decade to either exit the war before it even flames or repeat their interference regretted since the Arab Spring to jump headfirst into another round of decade long destruction.

Continue Reading

Middle East

Post Trump Palestine

Published

on

Al-Walaja, a Palestinian village in the West Bank. Photo: UNRWA/Marwan Baghdadi

The unconditional United States’ political, financial and military support to Israel enabled the latter to occupy the Palestinian territories. The former became involved in Israeli-Palestinian conflict as an arbiter to resolve the issue. But the foreign policy of US has always remained tilt to Israeli interests. From recognizing Israel as sovereign state in 1947 to accepting Jerusalem as capital of Israel has clearly unearthed the biased attitude of US for Israel.

Similarly, Trump also adopted the traditional stance of Washington on Palestine, i.e. outright support for Israel. Trump’s policy regarding Israeli-Palestinian conflict was more aggressive but not in contradiction with his predecessors’. For instance, he brought into reality the law passed by US congress in 1995 that recognized Jerusalem as the capital of Israel, shifted US embassy from Tel Aviv to Jerusalem, closed office of Palestine Liberation Organization PLO in Washington DC in Sept 2018 and closed US consulate in East Jerusalem the area under Palestinian control. His bigotry against Palestinians unveiled more distinctly when he announced defunding of United Nations Relief and Works Agency for Palestinian Refugees (UNRWA), the UN agency that provides food, education and healthcare to the refugees. Moreover during his regime in November 2018 the state department of US proclaimed that the construction of Israeli settlements in West Bank does not come under the ambit of violation of international humanitarian laws. Certainly, the belligerent policies in last four years of trump era paved the way for the colonization of Palestine by Israel and helped the latter to put unlawful restrictions on Palestinians making them deprived of all civil liberties and peace.

As per world report-2020by Human Rights Watch HRW, Palestinian citizens are restrained from all basic necessities of life such that, education, basic healthcare, clean water and electricity. The movement of people and goods to and from Gaza strip is also inhibited. According to World Health Organization WHO 34 percent of applications by Palestinians, for medical appointments outside Gaza strip, were not addressed by Israeli army. Moreover, HRW report states that the Israeli government destroyed 504 homes of Palestinians in West Bank during 2019 and facilitated 5995 housing settlements for Israelis. The country is trying at utmost to eradicate indigenous Palestinians from their home land. According to United Nations’ Office of Coordination of Humanitarian Affairs UNOCHA, the demolitions of Palestinian homes displaced 642 people in 2019 and 472 in 2018.Moreover, the illicit attacks by Israeli side have killed hundreds of innocent citizens in the same years. According to UNOCHA on November 11, 2020, 71 innocent Palestinian citizens were killed by Israeli forces while 11,453 were lethally injured in a single day. Furthermore, UN secretary general exhorted that Israeli armed forces have infringed the children’s rights during the conflict as in 2018, 56 Palestinian children were killed by Israeli armed forces.

While, other international actors criticized the Israeli annexations of the region and declared it as violation of international humanitarian laws, US supported the Israeli escalations in West Bank. The former also stopped aid support through USAID for Gaza strip where eighty percent of population depends upon aid. Such partial attitude of US has put the country outside the international consensus on the issue. Apparently, US pretend its position as arbiter but her policies accredited the colonization of Palestine by Israel.

Thus, it seems futile to expect any big change in US policies regarding Israeli-Palestinian issue during forthcoming administrations. However, the president-elect Joe Bidden may alter some of the trump’s decisions such as reopening of Palestine Liberation Organization PLO in Washington, resuming funding of UNRWA and reopening of US consulate in East Jerusalem.  But his policies will not contradict the congress’ stance on the issue. As, he and his team have clearly mentioned prior to elections that they will not shift back the US embassy to Tel Aviv as it seems politically and practically insensible to them. Moreover, Blinken, the candidate for secretary of state in Joe’s upcoming regime, made it clear through his controversial statements, that the imminent president will inherit historic US position on Palestine-Israel dispute. Further, Chinese expansionism, Russian intervention in American and European affairs and Iran nuclear deal issue would remain the main concerns of foreign affairs of US during initial period of Joe Biden’s regime. He is likely to favor the status quo in Palestine and remain focused on other foreign interests. In addition to this the inclination of Arabian Gulf to develop relations with Israel will also hinder the adherence for Palestinians from the gulf countries. Subsequently, it will enable Israelis to continue seizing the Palestinian territories into Israel and leave indigenous Palestinians stateless in their own land.

Summing up, it is significant for Palestinians to continue their struggle for the homeland and seek support from other international actors to marginalize Israel’s annexation of Palestinian territories. As well as, the peace accord of 1993 signed in between both nations, to share the holy land, should also be revoked by both countries.  Both nations should try to resolve the issue on equitable grounds by negotiations so that either side could not be deprived of its interests.

Continue Reading

Middle East

An Enemy Among Us

Published

on

The upcoming talks regarding the tensions in the Eastern Mediterranean, that are due to take place on January 25, should not disillusion us from the dangers of Turkey’s unilateral aggression on all fronts. Erdogan has made no real efforts to improve ties with the EU, except for the occasional vain promise of turning over a new leaf. Since October, he has urged the Muslim world to boycott French products, continued gas exploration in the Eastern Mediterranean, blatantly ignored the arms embargo in Libya and has aided Azerbaijan in committing war crimes in Nagorno-Karabakh.

Despite the numerous warnings issued by the EU and the many failed attempts at resolving the crisis in the East Med diplomatically, the latest EU summit concluded with an anti-climactic promise to sanction certain Turkish officials regarding the East Med. This minimally symbolic promise could only be described as a mere slap on the wrist that will prove unsuccessful in deterring Turkey’s belligerent tendencies. Turkey’s increasingly hostile attitude, its callous use of the refugee crisis and its clear violation of international law in the East Med, Libya, Syria and Nagorno-Karabakh represent a danger to European values, identity and security.

We are witnessing before our eyes a dictator in the making who dreams of a return of the Ottoman empire and seeks to destroy the democratic and secular legacy of Atatürk. He is a fervent supporter of political islam – particularly the muslim brotherhood – and he relentlessly accuses the West of wanting to ‘relaunch the crusades’ against Islam. In fact, since 2014, Erdogan and the National Intelligence Organization (MIT) have continuously facilitated cross-border movement into Syria and shipped illegal arms to a number of radical jihadist groups. The Turkish government also uses SADAT Defense, an islamist paramilitary group loyal to Erdogan, to aid groups that can be considered as terrorist organizations such as Sultan Murad Division and Ahrar al-Sham in Northern Syria and use their jihadi fighters to send to Libya, Nagorno-Karabakh and, most recently, Kashmir in order to bolster Turkey’s foreign policy.

Erdogan uses a mixture of islamism and nationalism to expand Turkey’s influence around the world and to consolidate power within. The two most influential factions in Turkey are the radical islamists and secular neo-nationalists, who despise each other but share a deep disdain for the west. Courtesy of neo-nationalist and former Maoist terrorist leader Dogu Perinçek, the NATO member has also enjoyed warmer ties with Russia and China over the past 5 years. As a result of these shifts in alliances and growing anti-western sentiments, Turkey is becoming increasingly at odds with the West. 

Furthermore, the growing discontent at home pushes him to adopt more aggressive tactics, divisive policies and his behavior mirrors that of a panicked authoritarian leader. Erdogan is desperately looking for a conflict to distract the Turkish population from the fall of the lira, the spread and mishandling of COVID-19, and the overall declining economy that predates the pandemic. Turkey’s future will most likely be determined by the upcoming general election that is set to take place within the next three years. If Erdogan wins the next election, it will solidify his power and bring him one step closer in turning Turkey into a dictatorship. During his stay in power, he has already conducted a series of purges to weaken and silence dissidents. Turkey now has the most imprisoned journalists in the world. 

Yet, the loss of Istanbul and Ankara in the last municipal election of 2019 demonstrate his declining popularity, and offer a glimmer of hope for the opposition. Political figures like the new mayor of Istanbul, Ekrem İmamoğlu, or the new mayor of Ankara, Mansur Yavaş, represent a brighter future for Turkey. Erdogan currently finds himself in a position of weakness, which represents a rare window of opportunity for the EU to strike. Unfortunately, the EU remains deeply divided on how to handle a situation that continues to deteriorate. It seems that some member states, particularly Germany, are holding on to the naive belief that Erdogan can still be reasoned with. 

Our reluctance to impose the slightest sanctions against Turkey demonstrates our division and weakness, which emboldens the neo-sultan. A strong and united response from the European Union is the only way to curb Erdogan’s expansionist agenda. This should include renegotiating the migrant pact, imposing targeted sanctions against SADAT Defense and its leader Adnan Tanrıverdi, imposing an arms embargo, suspending the EU-Turkey customs union and finally suspending Turkey’s membership in NATO. 

Ultimately, Erdogan’s bellicose foreign policy and his contentious nationalist-islamist rhetoric makes it impossible to consider Erdogan’s Turkey as our ally. As the EU reaches out yet another olive branch, Erdogan has his eye on the wars to come. 

Continue Reading

Publications

Latest

Trending