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Libya and the essence of the agreement between OPEC and non-OPEC countries

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[yt_dropcap type=”square” font=”” size=”14″ color=”#000″ background=”#fff” ] L [/yt_dropcap]ibya is planning to double its crude oil production next year. Although it has been an OPEC member since 1962, as well as the African country with the largest (and best quality) oil reserves, for obvious geopolitical reasons it has not been involved in the recent agreement between OPEC and non-OPEC countries, which favours the Russian Federation, reconnects Russia to Saudi Arabia, thus avoiding too close a link between Russia and Iran, and make Russia play a primary broker’s role in the Middle East.

Also Iran has no intention to sabotage this agreement on oil prices, which will certainly favour also the Shiite republic.

Conversely Nigeria and Libya itself have increased their production, while the whole non-OPEC area, Russia, Brazil, Canada, Norway and Kazakhstan have increased stocks, especially because a decrease in oil and gas demand is expected, starting from China.

According to the statements made by the President of the National Oil Corporation (NOC), Mustafa Sanalla, currently Libya extracts 708,000 barrels/day, but production is expected to soon reach 900,000 and level off at around 1 million barrels per day in late 2017.

It is worth recalling that, pending the crazy and senseless Libyan civil war, production had fallen to 200,000 barrels per day.

Later it was NOC itself to deal with the various armed groups deployed to patrol the pipelines in exchange for considerable money payments and resorting to the effective support of General Khalifa Haftar’s forces.

In fact, Libya’s new presence on the global oil market was made possible by an agreement reached last September between NOC and General Khalifa Haftar, who holds power over most Libyan ports and, above all, on Ras Lanuf and Es Sider.

As already said, Libya was not involved in the agreement between OPEC and non-OPEC countries, along with Nigeria and Iran which, however – as stated by the Oil Minister, Zangrneh – supports the process of controlled reduction of the Vienna-based cartel’s oil production and of the even larger oil production of the non-OPEC area.

For the time being, the agreement is operating particularly between Russia, Saudi Arabia, Qatar and Venezuela.

Moreover, for the first time since 2012, few days ago Iran resumed its oil exports to Europe.

If the agreement between OPEC and non-OPEC countries works, Iran will have every interest in becoming an integral part of it.

If Saudi Arabia – albeit unwillingly – withdraws 4.5% of its daily oil production from the market, equivalent to 500,000 barrels a day, all the non-OPEC area will cooperate and contribute to this bullish operation for a total of 600,000 barrels a day, while the Russian Federation is ready to cut its daily production by 300,000 barrels.

Hence, with specific reference to Libya, a quick economic revival is expected – driven, as usual, by oil and gas – which will certainly not bring back the country to the glories of Muammar El Gaddafi’s leadership, with its 1.6 million barrels a day, but will certainly allow to somehow rebuild this poor and very unfortunate country.

Hence Libya as a sort of oil “replacement economy” for the rest of OPEC, which will allow to improve its economy but could even weaken – and virtually stultify – the OPEC and non-OPEC countries’ efforts to make the oil barrel price rise again.

Nevertheless we do not believe that NOC will shoot itself in the foot. Quite the reverse. We are certain that Libya will follow the rise on the markets with careful daily adjustments of its oil production.

Furthermore, in the second half of 2017, nothing prevents OPEC from adapting to another further decrease in oil production. If an oil barrel price of 60 US dollars were recorded – as is likely – also Iran would have an interest in participating in the process.

So far Iraq has lobbied to avoid having to enter into the agreement between OPEC and non-OPEC countries, considering that it must back a military and social effort against terrorism and the so-called Al Baghdadi’s “Caliphate”, but it eventually agreed to a daily ceiling of 4.35 million barrels a day.

Russia pressed for the agreement also with Iraq and, despite extraction restrictions, probably the increase above 60 dollars a barrel will allow high liquidity.

According to the independent analysts of this particular market, currently compliance with the agreement accounts for 90% approximately. This will enable Saudi Arabia, which has agreed to make the largest cuts, to stabilize the Middle East region. It will also enable Russia to become the great player and mediator in the Middle East and even the United States to make the oil shale extraction very profitable.

According to the most reliable economic intelligence analyses, however, the break-even point of the US shale oil is well under 30 US dollars per barrel – and this is the real Saudi Arabia’s problem.

Saudi Arabia did everything – even cutting the oil barrel price down, as until recently – to eliminate the North American competition since the very beginning, although the shale oil production cost in the United States varies greatly from one region to the other.

Saudi Arabia dreams of reducing the number of companies operating in the US shale oil sector to fewer than ten, so as to later try to achieve a vertical consolidation of that market with some large international players.

On the other hand, the Saudi oil production cost is very low and the country can afford a trade war with the US shale oil as long as it wants.

With specific reference to natural gas, which has a structurally different market compared to the oil one, a trade war is foreseen in the near future between some US operators and the EU traditional Russian gas suppliers, while Gazprom will take remedial measures by flooding European countries with low-cost natural gas.

Hence another trade war looming over the energy systems, not to mention the fact that if very low oil prices had continued to dominate the markets for another two years, Saudi Arabia would have gone into default in mid-2018 – and the 30 US dollars a barrel prolong Saudi Arabia’s life by approximately six months.

The other “poor” OPEC countries are in the same situation as the rich Saudi Arabia.

Saudi Arabia, however, has favoured the too low oil prices with a view to destroying the US and, above all, the Russian production.

Now, with the new agreement, the OPEC area becomes a point of reference for Russian geopolitics, and even Libya will increasingly operate in close connection with Russia, considering that it was exactly the Russian pressure that led to the “finalization” of the Algiers agreement and, later, to the Doha agreement.

Nevertheless Saudi Arabia, which has monetary reserves to the tune of 655 billion US dollars, cannot accept – for a long period of time – even a barrel price above 60 US dollars, unless it cuts its public spending and starts its external indebtedness.

Furthermore also Russia has the problem of the impoverishment of its oil fields in Western Siberia. Hence the production reduction, which for Moscow is not high, is a blessing for prices and for extending the lifecycle of oil wells – not to mention the fact that the sanctions, imposed as a result of the Ukrainian issue, blocked the arrival of modern extraction technologies in Russia, with the related increase in production costs.

Therefore if – thanks to this agreement with OPEC – Vladimir Putin succeeds in reaching the level of 100 US dollars per barrel within a time frame acceptable to international investors, the new “big game” in Central Asia and the Greater Middle East will begin.

Saudi Arabia began to extract large and unexpected oil quantities in the mid-1980s, on the basis of a political and financial agreement with the United States, which further destroyed the Soviet economy – but now the mechanism is working exactly in the opposite way.

Currently the Russian oil barrel production cost is equal to 5.4 US dollars. Saudi Arabia’s cost is only 3 US dollars, while obviously the next start of offshore extraction activities will only increase production costs.

In Libya, the production cost – net of the country’s political disaster – is similar to the Saudi one, but data shows that, without an increase – as expected – in production and prices, the Libyan State, or what remains of it, would have no more funds by the end of this year.

To some extents this is also the Russian problem.

Russia’s federal deficit amounts to 1.5 trillion rubles (23.2 billion US dollars) and, according to the relevant Ministers, the Russian Reserve Fund could dry up just at the end of 2017.

Hence, without the oil price recovery, the whole Russian strategic architecture would go to ruin, thus causing an even more severe geopolitical disaster than the one which led to the USSR collapse – as Putin put it.

However, as we have seen, if the agreement between OPEC and non-OPEC countries works – and is even strengthened during the year – the stabilization (and diversification) of the Russian economy and, consequently, the stabilization of the entire Middle East crisis arc, will be a reality.

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. “

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Iranians move into front line of the Middle East’s quest for religious change

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A recent online survey by scholars at two Dutch universities of Iranian attitudes towards religion has revealed a stunning rejection of state-imposed adherence to conservative religious mores as well as the role of religion in public life.

Although compatible with a trend across the Middle East, the survey’s results based on 50,000 respondents, who overwhelmingly said they resided in the Islamic republic, suggested that Iranians were in the frontlines of the region’s quest for religious change.

The trend puts a dent in the efforts of Iran as well as its rivals, Saudi Arabia, Turkey, and the United Arab Emirates, that are competing for religious soft power and leadership of the Muslim world.

Among the rivals, the UAE, populated in majority by non-nationals, is the only one to start acknowledging changing attitudes and demographic realities. Authorities in November lifted the ban on consumption of alcohol and cohabitation among unmarried couples.

Nonetheless, the change in attitudes threatens to undercut the efforts of Iran as well as its Middle Eastern competitors to cement their individual interpretations of Islam as the Muslim world’s dominant narrative by rejecting religious dogma and formalistic and ritualistic religious practice propagated and/or imposed by governments and religious authorities.

“It becomes an existential question. The state wants you to be something that you don’t want to be,” said Pooyan Tamimi Arab, one of the organizers of the Iran survey, speaking in an interview. “Political disappointment steadily turned into religious disappointment… Iranians have turned away from institutional religion on an unprecedented scale.”

In a similar vein, Turkish art historian Nese Yildiran recently warned that a fatwa issued by President Recep Tayyip Erdogan’s Directorate of Religious Affairs or Diyanet declaring popular talismans to ward off “the evil eye” as forbidden by Islam fueled criticism of one of the best-funded branches of government.

The fatwa followed the issuance of similar religious opinions banning the dying of men’s moustaches and beards, feeding dogs at home, tattoos, and playing the national lottery as well as statements that were perceived to condone or belittle child abuse and violence against women.

Funded by a Washington-based Iranian human rights groups, the Iranian survey, coupled with other research and opinion polls across the Middle East and North Africa, suggests that not only Muslim youth, but also other age groups, who are increasingly sceptical towards religious and worldly authority, aspire to more individual, more spiritual experiences of religion.

Their quest runs the gamut from changes in personal religious behaviour to conversions in secret to other religions because apostasy is banned and, in some cases, punishable by death to an abandonment of religion in favour of agnosticism or atheism.

Responding to the Iranian survey, 80 per cent of the participants said they believed in God but only 32.2 per cent identified themselves as Shiite Muslims, a far lower percentage than asserted in official figures of predominantly Shiite Iran.

More than a third of the respondents said that they either did not belong to a religion or were atheists or agnostics. Between 43 and 53 per cent, depending on age group, suggested that their religious views had changed over time with six per cent of those saying that they had converted to another religious orientation.

Sixty-eight per cent said they opposed the inclusion of religious precepts in national legislation. Seventy per cent rejected public funding of religious institutions while 56 per cent opposed mandatory religious education in schools. Almost 60 per cent admitted that they do not pray, and 72 per cent disagreed with women being obliged to wear a hijab in public.

An unpublished slide of the survey shows the change in religiosity reflected in the fact that an increasing number of Iranians no longer name their children after religious figures.

A five-minute YouTube clip allegedly related to Iran’s Revolutionary Guards attacked the survey despite having distributed the questionnaire once the pollsters disclosed in their report that the poll had been supported by an exile human rights group.

“Tehran may well be the least religious capital in the Middle East. Clerics dominate the news headlines and play the communal elders in soap operas, but I never saw them on the street, except on billboards. Unlike most Muslim countries, the call to prayer is almost inaudible… Alcohol is banned but home delivery is faster for wine than for pizza… Religion felt frustratingly hard to locate and the truly religious seemed sidelined, like a minority,” wrote journalist Nicholas Pelham based on a visit in 2019 during which he was detained for several weeks.

The survey’s results as well as observations by analysts and journalists like Mr. Pelham stroke with responses to various polls of Arab public opinion in recent years that showed that, despite 40 per cent of those polled defining religion as the most important constituent element of their identity, 66 per cent saw a need for religious institutions to be reformed.

The polls suggested further that public opinion would support the reconceptualization of Muslim jurisprudence to remove obsolete and discriminatory concepts like that of the kafir or infidel.

Responses by governments in Iran, Saudi Arabia and elsewhere in the Middle East to changing attitudes towards religion and religiosity demonstrate the degree to which they perceive the change as a threat, often expressed in existential terms.

In one of the latest responses, Mohammad Mehdi Mirbaqeri, a prominent Shiite cleric and member of Iran’s powerful Assembly of Experts that appoints the country’s supreme leader, last month described Covid-19 as a “secular virus” and a declaration of war on “religious civilization” and “religious institutions.”

Saudi Arabia went further by defining the “calling for atheist thought in any form” with terrorism in its anti-terrorism law. Saudi dissident and activist Rafi Badawi was sentenced on charges of apostasy to ten years in prison and 1,000 lashes for questioning why Saudis should be obliged to adhere to Islam and asserting that the faith did not have answers to all questions.

Analysts, writers, journalists, and pollsters have traced changes in attitudes in the Middle East and North Africa for much of the past decade.

Kuwaiti writer Sajed al-Abdali noted in 2012 that “it is essential that we acknowledge today that atheism exists and is increasing in our society, especially among our youth, and evidence of this is in no short supply.”

Mr. Arab argues nine years later that his latest survey “shows that there is a social basis” for concern among authoritarian and autocratic governments that employ religion to further their geopolitical goals and seek to maintain their grip on potentially restive populations.

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Sign of a Volcano Erupting in Iran

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Since its inception in 1979, the Iranian regime has relied on two pillars to sustain its hold on power: relentless repression at home, and terrorism and warmongering abroad. Since the regime is out of step with the modernity of the 21st century, it needs to resort to belligerent policies in order to impose itself upon the existing international order.

Regime leaders know that it is exactly their foreign transgressions that have now become a source of serious alarm for European and American interlocutors. Even if a new round of negotiations were to take place, both the Supreme Leader, Ali Khamenei, and the President, Hassan Rouhani, understand that the nuclear issue will not be the only topic of conversation.

In a speech on January 8, Khamenei insisted on the regime’s regional adventurism and missiles program, saying that “the Islamic Republic has a duty to act in a way that strengthens its friends and supporters in the region.” Tehran has always made renouncing regional influence and its missiles program a red line. 

However, speaking on behalf of the European Union, German Foreign Minister Haiku Moss has said that a reinvigorated Iran deal must include new nuclear restrictions as well as an end to the testing of ballistic missiles. At the same time, he called for “limitation of Iran’s regional power” in the form of a “new agreement.”

Therefore, one of the pillars of the regime’s survival (foreign adventurism) has clearly been targeted by foreign powers. The other (domestic repression) is being challenged by the Iranian people.

A Social Volcano about to Erupt

In recent months, hundreds of centers controlled by the Islamic Revolutionary Guard Corps (IRGC), the paramilitary Bassij, and the Ministry of Intelligence and Security (MOIS) have been targeted by young activists seeking to overthrow the regime. Simultaneously, posters and banners of regime leaders like Khamenei and eliminated Qods Force commander Qassem Soleimani have been torched across the country.

The regime often blames these acts of dissent on “Resistance Units,” which are organized teams of young dissidents calling for the theocracy’s overthrowand reported to be affiliated with the Mujahedin-e Khalq (MEK).A few short months before the massive November 2019 uprisings in Iran, the Minister of Intelligence Mahmoud Alavi claimed 116 of these “teams have been dealt with” in a matter of months. That is an indication that Tehran is witnessing a significant rise in such activities.

Time will tell if the trajectory of Iranian politics would experience a radical departure in the form of the regime’s ultimate collapse. All indicators are that the pace and depth of resistance appear to be increasing. Therefore, officials in Tehran may not be as optimistic as the rest of us about what lies ahead in 2021.

Warnings of Mass Uprisings

Practically every media outlet or official in Iran has been warning of a pending social explosion due to prevalent poverty and rampant unemployment. For example, one state-run daily refers to the worrying conditions and the lack of a “barrier against the volcano of the hungry” (Arman, December 26, 2020).

Another warns that “in an instant and with a simple spark of provocation, the Army of the Hungry may revolt.” (Hamdeli, December 20, 2020).The Iranian economy is collapsing andmore than 70% of society now lives below the poverty line.

Despite the supreme leader’s empty rhetoric and desperate show of power, he is well aware that he must negotiate and so that the sanctions on the sale of oil are eased, albeit in small quantities, in order to avoid more uprisings.

Khamenei is Weak and Vulnerable

Despite the danger of a social explosion, however, Khamenei and his regime are now at their weakest point since 1979. They cannot enter negotiations with US President Biden and Europe at this time. Khamenei can ill afford to look weak by backing down and engaging in such talks, especially prior to the presidential elections in June. So, he has decided to close ranks instead of opening up.

Khamenei is looking to limit rival factions’ power, including those supporting Rouhani. During the recent parliamentary elections, he pretty much purged so-called “reformist” candidates. Recent laws defining new conditions for presidential candidates have paved the way for Khamenei’s allies – like parliamentary speaker Mohammad Baqer Qalibaf – to replace Rouhani. Khamenei calculates that once he has closed ranks and his faction controls all the levers of power, including the presidency, parliament, and judiciary, he would be able to entertain negotiations.

At the same time, he is trying to gain as much leverage in the nuclear arena in order to avoid giving concessions in other areas. Khamenei wants to boost the morale of his forces. Doling out regional or missile concessions would spell disaster for that strategy, leading to more defections in the ranks of the IRGC.Still, due to the sanctions, he is between a rock and a hard place. His regime is at its weakest point in history and extremely vulnerable.

One of the extremely unpopular moves he recently made was that he personally banned the import of coronavirus vaccines from France, Britain, and the US. Average Iranians, who have lost tens of thousands of loved ones to the virus and are reeling under the severe economic ramifications, are furious.

The Iranian society is growing more enraged at the regime by the day. Calls for overthrow, as indicated in the November 2019 uprising, are growing. Meanwhile, the regime has little leverage to demand the lifting of sanctions as both Europe and Washington target its regional interference and missiles program. With options severely narrowing, the regime may finally be at the end of its rope.

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100th Anniversary of the Turkish Constitution

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Teşkilatı-Esasiye Law, the law provides for the establishment of the State of Turkey on January 20, 1921. This law also carries its status as Turkey’s first constitution.

The Ottoman State displayed a submissive understanding in the face of the occupations experienced in its last period. The people displayed an important struggle for independence by showing the necessary reaction and effort during the 1st World War against these invasions. After the war, Mustafa Kemal Ataturk, exhibited a legitimate ground to fit this into the struggle for independence and contemporary, landed in Samsun on May 19, 1919 to establish a modern Turkey. This date was also the first step in the War of Independence launched against the occupations across the country.

After Samsun, Mustafa Kemal, who held various meetings and congresses in Amasya and Erzurum, respectively, went to Sivas from here and held the Sivas Congress with the representatives determined by the people from every province. September 4, 1919 at the congress held in Sivas with the participation of delegates from all over Turkey, Istanbul until the establishment of the new Chamber of Deputies of the general elections made the government decide to cut all formal ties. A Council of Representatives was established in order to establish a new administrative and political organization throughout the country.

As a result of the election held in 1920, the last Parliamentary Assembly of the Ottoman Empire was established, but on March 16, 1920, Istanbul was occupied by the British and the pro-National Struggle MPs were arrested. The parliament that convened on March 18 announced that it dissolved itself. With the dissolution of the last Ottoman Parliament, Mustafa Kemal announced in the statement he published on behalf of the Representation Committee that he wanted the MPs who could escape the occupation in Istanbul to come to Ankara.

The Grand National Assembly was Established

MPs who managed to escape secretly from Istanbul deputies from all over Turkey, Mustafa Kemal’s leadership in Ankara on 23 April 1920, which was collected and laid the foundations of the Republic of Turkey Grand National Assembly was opened. The next day, on April 24, 1920, Mustafa Kemal Pasha was elected president of the Grand National Assembly. The Assembly, which adopted the principle of unity of forces, thus started its work to ensure the independence of the nation and the liberation of the state.

Mustafa Kemal Pasha, as the Speaker of the Assembly, presented a draft on September 13, 1920 with the title “Populism Program” consisting of 31 articles. For the draft, Mustafa Kemal said, “The nature of our existence, the essentiality of the nation, has proved the general trend of the nation, it is populism and the people’s government. It means that governments fall into the hands of the people ”and stated that this is an obligation. On September 18, 1920, the Populism Program prepared by the government was read in the Parliament. Malatya Deputy Lütfi Bey “This statement contains many principles”. First of all, I recommend him to go to the Principles of Law ”. Trabzon Deputy Ali Şükrü Bey stated that this draft was not a draft law and did not want it to be sent to the committee. In his speech, Minister of Finance Ferit Bey underlined that the draft law is a draft law and said, “This program is the political program of the government.”

At the end of the discussions, it was decided to send the program to a special committee consisting of three people from each branch. The members of the special commission named Encümen-i Mahsus were determined on September 25 and started their work. The Council completed its first work on October 21, 1920, and the program was put on the parliament’s agenda on October 27. The Council made some changes in the Fundamental and Administration sections of the Government Program and arranged this as a draft Law of Organization. He presented the justification of the arrangement he made to the Parliament. The draft law prepared by the Encümen-i Mahsus, which was submitted to the Parliament as the Fundamental Law of the Organization, consisted of 23 articles and two sections as Mevaddı Fundamental and Administrative. Some of the articles in the Populism Program were not included in the Draft Law on the Organization-ı Esasiye, which was arranged by the Encümen-i Mahsus and submitted to the Assembly. Article 5, which includes the subject of caliphate and sultanate, Article 10, which includes the number of people in the Grand National Assembly, and Article 16 regarding the army, were not included in the Draft Law on the Principles of Organization. While 11 items were accepted as they are, changes were made on 12 items. An Article-i Individual was added by the Encümen-i Mahsus. It was requested that the articles and provisions of the Basis of the Law, which were not contradicted to the law at the time the draft Law on the Principles of the Organization was discussed in the Assembly. However, as the Speaker of the Assembly Mustafa Kemal opposed this request, such a provision was not included in the Constitutional Law of the Organization. Therefore, with the Law of Fundamentals of the Organization, his relationship with the Ottoman Empire’s Basis of Law was officially terminated.

These discussions lasted about five months. The Fundamental Organization Law was accepted in the Parliament on January 20, 1921. A special method and quorum was not sought in the adoption of the law. Mustafa Kemal sent the Law of Constitution to the Grand Vizier Tevfik Pasha by telegram. No. 85 “Organization Fundamental Law” Article 23, and also carries the distinction of being Turkey’s first constitution, which consists of discrete items. One of the most important features of this Constitution is that even though the Ottoman Empire did not come to an end, it was declared that it would be administered by the Grand National Assembly and that sovereignty belonged to the nation, and the system, which was actually implemented with the principle of unity of powers, was placed on a constitutional basis.

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