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Saudi – Iranian future: 3 games – 3 scenarios

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There is no need to argue on Saudi Arabia and Iran as the two biggest regional powers in the Gulf, the rising tension between the two countries who are engaged in proxy wars in Syria, Yemen, Iraq and somehow Bahrein had installed a climate of Cold War.2.

How did we get there?

Saudi Arabia existed since 1932 as a Sunni country and the birthplace of Islam. Its history of creation is so unique, mesmerizing and fascinating.

Iran, has a glorious past, with various empires that conquered the Arab-Islamic world at certain period of time.

While the Shah was in power, Iran’s relations with the Arab Gulf States were normalized, Iran’s navy used to act as the policeman of the gulf. The situation has changed when the Iranian Islamic revolution occurred in 1979, with consequences on both countries and on their relationships. Iran’s Ayatollah wanted to export their respective model and undermine Saudi Arabia that Iranian officials see as corrupt and unworthy due to its relation with the United States and the West. The Shia country is also supporting Shia communities in the Gulf which is seen as a direct threat to Saudi Arabia.

Not only the leaders of the Iranian revolution see Saudi Arabia as a corrupt country, but they also see them as treacherous and disloyal. The reason behind is more than a Shia-Sunni rivalry; it is important to contextualize the order before the Islamic revolution; an oil embargo was occurring in the world where Iran’s leaders wanted to stop selling oil to Western powers. They called upon Saudi Arabia to do the same in retaliation toward countries who helped Israel in the « Yom Kippur War », but Saudi Arabia didn’t stop selling its oil, and decided to increase the price of the barrel to destabilize the economy of the Western countries that helped Israel, without disturbing their strategic alliance with the United States.

Today, the relationship between the two countries is delayed.

The succession of events from 2011 where Iran wants to seize the opportunity of a possible vacuum of power during the Arab Spring, by supporting the Shia protests that erupted in Bahrein and the idea of a Shia Islamic republic, has proved the ability of Saudi Arabia and the GCC to sends its troops into Bahrain. Was it a symbolic gesture, or a warning for Tehran?

Then it cames to Yemen, Iraq and Syria, where today Saudi Arabia and Iran are engaged in a proxy war. The Iranian Nuclear deal with the P5+1, the uncontrolled situation in Yemen, the Hajj crush where Iran claimed more than 400 dead citizens, The execution of 27 Sunnis by the Iranians, the execution of Nimr al Nimr (a Shia Sheikh) by the Saudis, the attack of the Saudi Embassy in Tehran, then the cuts of the diplomatic ties between the two countries, and the intensification of the rivalry.

What is for the future to expect?

3 games

3 scenarios

Accommodation game

In this scenario, Saudi Arabia and Iran will have to sit in the table of negotiation and find a com-promise. But how can two rival countries negotiate? common interest if there is any or a mutual threat?

Iran and Saudi Arabia are both rich countries, with large access to natural resources, big territories and their economic model is based on oil. If there is no common interest between the two powerful states in the region, the creation of ISIS constitute a threat to both governments. Iran doesn’t want a powerful Sunni group in Iraq and Syria and ISIS is threatening the Gulf monarchy. However, Tehran and Riyadh seems to have no intention to lower the temperature and talk again for a potential solution toward the defeat of « Daesh », and the rivalry between them is distracting attention from the war against ISIS. If a mutual threat is not enough to push for negotiations what can be the other solution?

As a consequence of the Iranian deal, the Saudis seem to be fed up with the shock therapy that the United States is exerting in the region at a point that they refused a seat in the Security Council. Saudi Arabia is today looking for new partnership with different countries, the latest highest meet-ing of the GCC has proved the lack of confidence of the Saudis regarding their alliance with the United States. With the intensification of tensions between Riyadh and Tehran, the Americans show no will to interfere and defend the interest of their historical ally, and Saudi Arabia is being exacerbated by the Washington-Tehran reconciliation.

Recently Saudi Arabia’s King Salman met the Chinese President in Riyadh where they signed a memorandum of understanding on the construction of a high-temperature gas-cooled reactor that can help the growing energy demand for electricity and water desalination in the Monarchy. This will also evolve the beginning of a nuclear program in Saudi Arabia. Actually, Since 2006, The monarchy was projecting to construct and promote a peaceful nuclear capacity program within the GCC, and in 2007 the six Gulf States studied with the IAEA (International Atomic Energy Agency) the feasibility for a regional nuclear power, with the assistance of France. Saudi Arabia started singing many international agreements for a nuclear cooperation with different countries as France, Argentina, South Korea, China.

Recently, in June 2015, Russia and Saudi Arabia signed an agreement for cooperation in the field of nuclear energy including the design, construction, operation of nuclear power, education and training and other aspects related nuclear reactors. Now, what if Saudi’s decide to weaponize the use of nuclear? It will have subsequent effects in the region and will lead to an arms escalation of WMD.

Nevertheless, if this situation is unwanted, it can bring back stability in the region, the history has proved it.

During the cold war, the Soviet Union and the United States were expending their ballistic missiles, the Cuban missile crises and the threat of a nuclear war between the two blocs that can destroy Russia and the United States and may be the world, had generated the need for negotiations to find a compromise. Khrushchev was going to dismantle the offensive weapons in Cuba and in exchange the U.S made a public declaration that it would never invade Cuba without a direct provocation, but it also said it would dismantle its missiles from Turkey and Italy. The outcome of the negotiations between the two blocs resulted in the establishment of a hotline between the Kremlin and Pentagon and the beginning of the « detente » period.

The struggle of power in the region between Saudi Arabia and Iran is already leading to an arms escalation, and it might be possible for both countries to start a weaponization of nuclear facilities, it doesn’t matter who will start first, as long as the other will follow. Pakistan never wanted a nuclear bomb until India got one. Achieving parity with a rival country would lead to sit in the table of negotiation and the achievement of a compromise. Iran can promise not to get involved in Yemen and in Bahrain while Saudi Arabia would pull-out its intervention in the Syrian conflict, and Iran would join the war against ISIS.

Destruction game

The year 1979 marked the Islamic revolution in Iran, the Iranian theoretical or « spiritual » leader was aiming at exporting the Shia-Islam brand to Shiites minorities within the Middle East, this constitute a threat for the powerful Sunni-Monarchy, as it can undermine the existing equilibrium in the region. The Iranian clerics were urging the Shiites communities of the gulf States to rebel against their rulers, and demonstrations started in Saudi Arabia, Kuwait, Bahrain and Iraq.

A year later, Iraq attacked Iran, and the two countries engaged in a war that was serving the interests of Iraq, and the Gulf countries, more precisely Saudi Arabia; despite the support by western countries, this war undermining the West’s interests in terms of oil flows disruption. Saudi Arabia with Kuwait were financing Iraq, and the United States was indirectly supporting the Iraqi government by cutting off Iran’s supplies. The Iranian revolution, followed by the war installed a climate of increasing rivalry between the powerful Shia and Sunni countries. With the recent uprising of the Arab Spring, the situation intensified.

Since the conflict in Syria and Yemen seems to offer no political solution, a climate of cold war is installed in the region between Saudi Arabia and Iran.

The 3rd round of the Geneva peace talks about Syria, included the participation of delegates from the Saudi-backed opposition, the delegates from the Syrian government, the High Negotiations Committee and other opposition figures to discuss a possible ceasefire, relate of prisoners, humanitarian aid deliveries and the threat posed by ISIS. The problem is that neither the opposition nor the actual Bashar’s government wants to negotiate with each others, and neither Saudi Arabia and Iran are willing to bury the hatchet in Syria.

With the Iranian nuclear deal, the reconciliation between Iran and the west and the failure of finding a solution in Syria and Yemen, the tensions between the two powerful nations in the regions are reaching their peak. One should not forget that the assassination of Archduke Ferdinand was sufficient to cause the first World War; and today a small incident in the region can have large consequences. Both nations are exacerbated from each others, we can imagine a small event going wrong in Syria or Yemen leading to a direct war between Iran and Saudi Arabia.

A war in the region can erupt at any moment, it is certainly the least preferable scenario, but the most likely to happen if the tensions between the two regional powers are not softened. A direct conflict between the two influent States would undermines the west interests, the oil prices, and the economy of the world and will shift a regional war to a Third Word War.

In one side, the United States with the European powers would back Saudi Arabia and the other Arab Golf States; on the other side Russia would back Iran and Syria militarily and financially. Who will be the winner? We can’t tell, but a War is very expensive for both countries and for their allies, especially for Russia that is now suffering economically from its intervention in Syria. What is certain is that a Third World War can leave the economy, culture and politics of Iran and Saudi Arabia completely destroyed, and would change the actual « World Order ».

Conversion

Since the Arab Spring, Iran started increasing its military presence in the Middle East. In Iraq, it has sent its soldiers to fight alongside the Iraqi Army, in Syria the Iranians are financially supporting the Assad’s government, Hezbollah in Lebanon and the Houthis in Yemen are backed by Iran. Can Iran’s rising power destabilize the region stability and create a conversion of power?

As my professor Anis Bajrektarevic well summarized on the Gulf and its surrounding intellectual scenery: “as it solely bridges the two key Euro-Asian energy plateaus: the Gulf and Caspian. This gives Iran an absolutely pivotal geopolitical and geo-economic posture over the larger region – an opportunity but also an exposure! …Nearly all US governments since the unexpected 1979 Shah’s fall, … have formally advocated a regime change in Teheran. On the international oil market, Iran has no room for maneuver, neither on price nor on quotas. Within OPEC, Iran is frequently silenced by a cordial Saudi-led, GCC voting”. Therefore, only now, the United Nations sanctions against Iran are formally lifted, which reconnected Iran to the global economy. The European embargo on Iranian oil is to come to an end and the Iranian banks will re-establish connections with the European banking system and private companies would be able to operate with no fear of a western sanction.

Nowadays, Iran is representing a diverse emerging market in the fields of manufacturing, retail and energy.

The public sphere was demonizing Iran for decades, but with the Rouhani government Iran is converting to a charming country. Jawed Zarif, Iran’s foreign minister, gives the image of an open country for negotiations, that is looking for long term solution and for stability in the region and in the world, but also a country that is trying to improve the economical and political situation of its young citizens.

Meanwhile, Saudi Arabia is suffering from a huge deficit in its public financing for the first time. With the crash of the crude prices, the deficit in the resource-rich Monarchy is more than 20% of the GDP that is according to Saudi Arabia’s finance minister around $120bn. To balance the budget, the kingdom needs an oil price of 100$ a barrel, its decision to keep the production high caused the plunge of the oil prices.

The decision of OPEC with the influence of Saudi Arabia to keep the production high, is going to burden the U.S shale oil and put the U.S gas industry under pressure, which can undermine the relationship between the two allies in the region.

The emergence of a prosperous Iran at the international level could serve as a pattern in the region, and shift the attention from the petrodollar monarchy to the « charming » country not far from it. While today Iran is improving its image in the public opinion, changing from the « devil » to « the sexy lady », Saudi Arabia’s model of « Wahhabism » is more and more connected to Islamic extremism and is blamed of causing terrorism.

Iran can use its new charisma plus its energy resources to attract the west, improve the situation in the country, offer a stability in Iraq and Syria and fill all the gaps where Saudi Arabia has failed.

The two regional powers are playing a poker game… Will the winner take it all?

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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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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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