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A Saudi Arabian Pivot to Asia?

M Waqas Jan

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As Saudi Arabia’s Crown Prince, Mohammad bin Salman (MbS) wraps up his week-long tour of Pakistan, India and China, many have been left contemplating the implications of his travels in light of the region’s evolving geo-politics. For Western observers, MbS’s attempts at shoring up Saudi Arabia’s alliances with these states are being seen as an attempt at shifting Riyadh’s focus eastwards as an alternative to his ties to the West. This ‘pivot to Asia’ has been further characterized as the result of MbS being snubbed and sidelined by Western powers as part of the condemnation and fallout resulting from the death of dissident journalist Jamal Khashoggi. As evident from his interactions (or lack thereof) with world leaders at the G20 Summit held in Buenos Aires last November, the more immediate objective of this visit appears as an attempt to disassociate the crown prince from the personal ignominy he faced at the summit.

However, looking beyond the timing and contextual background of MbS’s current standing in the West, there exist a broad range of long-term objectives which Riyadh appears to be working towards within the ambit of the crown prince’s ‘Vision 2030.’ While Western media outlets have termed this tour as MbS’s attempts at bolstering and re-affirming his relevance as the Middle East’s premier strongman, the Crown Prince’s statements otherwise suggest a clear acknowledgment of the shifting strategic and economic dynamics of Asia vis-à-vis the rest of the world.

His focus has thus not only been on consolidating and re-affirming past relationships such as with Pakistan, but also on laying the foundations of key trade and economic partnerships with India and China. In the case of the latter two, these partnerships are understandably based on the growing energy needs of two of the world’s fastest growing economies. This in turn bears both economic and strategic implications, especially considering how both China and India are also two of the largest importers of oil from the Kingdom’s arch-rival, Iran.

Hence, out of the key agreements signed during the Crown Prince’s tour, the most salient investments that stand out are the ones aimed at developing long-standing partnerships around the three countries’ expanding energy sectors. In China, this entails the $10 billion refinery and petrochemical complex to be developed jointly by Saudi Aramco and Norinco in the Chinese city of Panjin. In India, there is the $44 billion refinery being built in Ratnagiri, Maharashtra in which Saudi Aramco holds a joint 50% stake with the Abu Dhabi National Oil Company. And in Pakistan there is the $10 billion oil refinery planned for Gwadar, a key component of the China Pakistan Economic Corridor (CPEC) and China’s Belt and Road Initiative (BRI).

All of these investments represent Saudi Arabia’s attempts at building more long-term economic ties in line with the growing energy needs of these countries. The scale of these investments, along with the crown prince’s own statements given during this tour mark the stark reality that it is Asia rather than the West that is to serve as an increasingly important market for the Middle East’s energy supplies in the years to come. Even in the case of Pakistan, whose economic capacity for large investments pales in comparison to the economies of China and India, the Saudi Crown Prince was unequivocal in stating that Saudi investments in Pakistan were representative of his firm belief that Pakistan is to play an increasingly important role in the region’s future.

This role is likely to emanate directly from the key geo-economic and geo-strategic position Pakistan holds as part of China’s Belt and Road Initiative. Hence, out of all the investments in energy outlined above, the recently announced Saudi investment in Gwadar holds immense significance within the region’s broader strategic and economic dynamics. It is in effect a clear indication of Saudi Arabia’s willingness to play a more prominent role within the BRI framework set by President Xi Jinping,

This however does come with its own set of implications for China. On the one hand, China is actively looking for external investors and sources of funding to help shoulder the risks and liabilities being incurred by BRI projects. On the other hand, China’s ties with Iran both within and outside the BRI framework, would require it to carefully balance its relationship between both countries. China’s willingness to engage with Saudi Arabia under the ambit of the BRI is also likely to be determined by the extent to which Riyadh is willing to do business beyond its attempts at isolating Iran. This would in turn also be determined by the extent to which Saudi Arabia’s long and historic ties with the US play into its equation with respect to both China and Iran.

At present, both Saudi Arabia and the US are equally aligned on the issue of Iran. As US sponsored sanctions against the import of Iranian oil begin to gradually take effect, for Saudi Arabia there in lie the benefits of economically isolating Iran while filling the resulting supply gap with Saudi crude. Based on these dynamics however, even though India may be more amenable to US pressures on curbing its imports of Iranian oil, China remains a completely different story.

Research Associate and Program Coordinator for the China Study & Information Centre (CS & IC) at the Strategic Vision Institute, a non-partisan think tank based out of Islamabad. He can be reached at waqas[at]thesvi.org

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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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