The Rest of the World 15 March, 2022

With oil prices continuing to surge, the Biden administration has been trying to gain the support of oil-rich nations to roll back oil prices and apply more pressure on Russia in response to its invasion of Ukraine. The US is meeting significant resistance on both fronts from some of its allies in the Middle East. There’s mistrust in places like Riyadh and Abu Dhabi right now regarding the Biden administration’s priorities and intent. To put it in simple terms, there are many people of influence in the Saudi and UAE governments who consider the Biden Administration a fair-weather friend. It goes back to the war in Yemen, which was supported by the Obama and Trump administrations. But as the war became a humanitarian cataclysm, US opinion turned and one of the first acts of the Biden administration was a vow to end the war in Yemen and stop supplying Saudi Arabia with weapons.

Now in March, 2022, the United States wants something from its Middle Eastern allies and some are not very enthusiastic to help out. When President Biden attempted to arrange telephone calls with Saudi Crown Prince Mohammed bin Salman and the UAE’s Sheikh Mohammed bin Zayed Al Nahyan, he was reportedly rebuffed. Naturally, US officials deny this and have tried to put a different spin on the matter. But the fact remains that Washington’s relationship with some of America’s Gulf allies is in need of repair at a critical time. Iran’s missile attack against a US embassy and airbase in Iraq over the weekend certainly showcases the Islamic Republic’s intent to be play the role of agitator in the region. Especially in light of the pause that JCPOA talks have taken due to the war in Ukraine.

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China has reinstituted lockdowns in parts of the country amid a widespread surge in COVID-19 cases. Shenzen, China’s own silicon valley, is one city now under lockdown. Businesses have been ordered to suspend production operations and have non-essential employees work from home for a week. Shanghai and Hong Kong are two other major cities in China now dealing with major outbreaks. Case numbers are rising, but remain small compared to outbreaks in other nations back in late 2021 and early 2022 when the Omicron variant swept across the globe. A growing number of the cases in China appear to be of this variant.

The big concern now is additional instability for the global economy on top of what’s transpired from Ukraine. China’s COVID situation now adds more fuel to a fire which threatens to become dangerously bigger in coming weeks. The global economy will not stabilize by summer as some people had hoped.

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With international attention focused on Ukraine and Russia, North Korea has taken advantage of the lack of scrutiny to conduct a series of ballistic missile tests so far this year. On 27 February and 5 March, a pair of intercontinental ballistic missile tests were conducted, raising concerns these tests represent a crash effort by the North to resume its nuclear program. Adding to the concern are recent satellite images that show a resumption of activity at North Korea’s nuclear testing site at Punggye-ri. A North Korean nuclear test could be in the cards sometime soon.

In response to the increased missile tests and activity, the US is conducting naval and air exercises in the area. The USS Abraham Lincoln and her battlegroup are in the Yellow Sea running very visible air exercises with land-based USAF aircraft from South Korea. Patriot missile batteries in South Korea are also running increased exercises and preparations in light of the activity up North.

Sunday 16 August, 2020 Iran Update: Israel-UAE Deal The Latest Headache For Iran This Month

Thursday’s agreement between Israel and the United Arab Emirates to normalize relations is attracting its fair share of backlash in the Middle East. Predictably, Iran is not too thrilled with the deal. On Saturday, Iranian President Hassan Rouhani delivered a speech in which he called the move an act of betrayal by the UAE. “They [the UAE] better be mindful. They have committed a huge mistake, a treacherous act,” he said. The remarks caused the UAE government to summon the Iran’s charge d’affaires in Abu Dhabi. The UAE foreign ministry called Rouhani’s speech “unacceptable and inflammatory and had serious implications for security and stability in the Gulf region”. Iran was also reminded of its obligation to protect the UAE diplomatic mission in Tehran. Considering Iran’s history of encouraging protests in front of the embassies and missions of its neighbors in Tehran when their policies go against Iranian interests, the move was smart.

Iran has had a difficult August. The Israel-UAE deal is only the latest heartburn for the regime. Tehran was already dealing with an uncertain future for Hezbollah in Lebanon following the Beirut explosion, a still unsolved string of fires and explosions at energy  and nuclear sites inside of Iran, the worsening COVID-19 situation in the country, and the prospect of deeper economic sanctions looming in the future. After a US resolution to extend the arms embargo on Iran was defeated at the UN on Friday President Trump has vowed there will be snapback sanctions. The exact mechanism for bringing the snapback into play is being contested. The European Union claims since the US unilaterally removed itself from the JCPOA it does not have the power to bring about snapback sanctions. Washington claims otherwise. Either way, the Trump administration does have the power to levy even stricter sanctions on Iran, and pressure friendly nations to do the same.

Iran will be on the radar for the next couple of weeks at least so I suggest keeping an eye on news coming out of the Persian Gulf region.

UN General Assembly 2019: The Last Chance for Diplomacy?

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This week in New York, the chief diplomats of the United States, and Iran are entering the UN General Assembly with two specific mission goals, and guidelines regarding how to best achieve them. What transpires in Manhattan this week will almost assuredly affect the national interests of Iran, and the US. In the case of the former, the same holds true with regards to its economic wellbeing, and overall security.

Iranian Foreign Minister Mohammad Javad Zarif’s mission is to convince world leaders to pressure the United States into loosening the economic sanction noose it has fastened around Iran’s neck. Zarif has been dangling the possibility of talks between Iranian President Hassan Rouhani and US President Donald Trump taking place on the sidelines of the General Assembly this week in exchange for a loosening of the sanctions. Washington has shown no interest in this approach, and its not likely that Zarif will find too many sympathetic world leaders who possess the clout, or willingness to persuade the US to go easier on Iran.

US Secretary of State Mike Pompeo comes into the General Assembly looking to lay the foundation for a diplomatic outcome to the crisis. Contrary to the opinions expressed by countless left-leaning journalists, politicians and talking heads, the United States does not want to begin a war with Iran. SecState, and the rest of the Trump administration’s national security team have left no stone unturned while searching for a diplomatic solution to the crisis. Regrettably, none have been found. Despite its claims otherwise, Tehran has demonstrated no sincere desire to resolve the current issues through diplomatic means. The Iranian government only wants to return the US-Iran relationship to what it was previous to President Trump’s inauguration and that is not going to happen.

So, as the week begins and the drama starts to unfold in Manhattan, it will be useful to keep in mind that if there is no diplomatic breakthrough by Friday, the Trump administration will begrudgingly admit that diplomacy has failed. From that point on, the US focus will shift towards non-diplomatic means to contain Iran. And by non-diplomatic means, I’m referring to the application of military power, of course. 😊

Iran Promises ‘All Out War’ If Attacked

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Less than twenty-four hours after US Secretary of State Mike Pompeo labeled the Iranian attack against Saudi oil facilities to be an act of war, his Iranian counterpart warned the world that any US or Saudi military action against Iran will lead to an ‘all out war.’ Foreign Minister Mohammad Javad Zarif went on to explain that while Iran does not wish for war, it is prepared to defend itself should war come. His comments today have escalated the war of words presently underway between the Iranian regime and the Trump administration.

Zarif’s verbal barrage comes on the heels of not only Pompeo’s words, but also Saudi Arabia’s announcement that it believes Iran ‘unquestionably sponsored’ the attacks. Riyadh stopped short of openly blaming Iran, however. In yesterday’s statements, the Saudi government did explain its intention to gather more information on the attack. Specifically, determining the launch points of the cruise missiles. As I hinted at in a post the other day, this explanation could be little more than a screen to hide what is taking place behind the scenes. The US has incontrovertible proof that Iran is entirely responsible for the attack and the intelligence has been shared with the Saudi leadership and its military.

The other Gulf States appear to be aligning themselves with the United States as the crisis escalates. Today the United Arab Emirates announced it would be joining the US-led maritime coalition now being put together. Bahrain has previously said it too would be a part of the effort. Kuwait has raised the alert level of its military and security services as a precautionary measure. The Kuwaitis are also investigating the detection of unidentified UAVs over its territory earlier in the week, in an attempt to determine if there is a link to Iranian actions and future intentions.

 

Crude Politics

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Saudi Arabia and the United Arab Emirates are spearheading an OPEC effort to extend oil cooperation with Russia for at least three years and perhaps longer. OPEC and Russia have been cooperating closely over the past two years. Initially, the ad hoc partnership was intended to support oil prices which were experiencing a dramatic plunge at the time. This transformed into a market-control push to curb the influence of the United States as top crude producer in the world. As the US position has risen, its ability to affect international markets, and oil prices has grown.

Russia has rejected earlier efforts by OPEC to make it a permanent member of the cartel. Russian officials have pointed to increased bureaucracy as the reason for remaining outside of OPEC. There may be some truth to this, but the main reason for Moscow’s reluctance is probably the fact that Russia is not as dependent on oil revenue as many of OPEC’s other members. Therefore, it can survive economically even with oil prices remaining low. Geopolitics is probably another factor in Russia’s decision. Iran is a close ally of Russia, as well as the archenemy of Saudi Arabia. Tehran would not want to see a situation develop where Saudi Arabia and Russia as economic allies.

Other OPEC members may not be as open to Russia joining the cartel either. Russia and Saudi Arabia are the world’s #2 and #3 oil producers respectively. Those two nations would effectively hold the decision-making power for the entire cartel, marginalizing the smaller nations, their contributions, and positions. The Saudis also need to carefully consider the ramifications it could potentially face in the future if its efforts to woo Russia are successful. It could strain relations with the United States at a point in time when the House of Saud is enjoying a close, fruitful relationship with the Trump administration. In the aftermath of the Khashoggi affair the Saudis need to be a little more thankful to the US for its support. Bringing Russia into OPEC would not be seen as the act of a grateful ally.