http://www.atimes.com/atimes/Middle_East/IA23Ak01.html
The Kuwait-based Arab Times has reported on a recent meeting among US administration officials to decide on a plan of action against Iran. [1] It quotes "reliable sources" dating the attack to April, a month before British Prime Minister Tony Blair leaves office. Whether or not the suggested date is right, or even if the attack does not come, there is something afoot.
Oil prices have fallen 17% over the past few months, now heading toward US$50 a barrel. Surprisingly, the Saudis are not interested in stemming the price drop. Ibrahim al-Naimi, the Saudi oil minister, during a recent trip to India said oil prices were headed in the "right direction". A close US ally, Nigeria, has Organization of Petroleum Exporting Countries chairmanship, and even though Venezuela and Iran have requested an early OPEC meeting, the Arab states of the Persian Gulf have all refused to schedule one to discuss oil prices.
This is in line with the Saudi plan laid out by Nawaf Obaid - a former special adviser to the Saudi ambassador in Washington - in the Washington Post a few months back in which Obaid outlined Saudi Arabia's course of action in the face of the growing conflict in Iraq and the probable US withdrawal from that country. The Saudis, Obaid stated, would act to lower global oil prices to weaken Iran and intervene in Iraq by supporting Sunni tribes.
The idea is to weaken Iran financially, because 85% of Iran's export income comes from oil and 40% of gasoline used in Iran is imported (even though it is the fourth-largest producer of crude oil) because of a lack of local refining capacity.
Financial-futures analyst Gary Dorsch reports that, contrary to analysis in the press that holds warm weather as the cause of falling oil prices, the real reason is that an excess of 700,000 barrels of oil is being produced by OPEC countries. [2] Only Saudi Arabia has the spare capacity to bring market prices down.
Add to that the growing hue and cry about the rising "Iran threat" that one hears in the Gulf Arab states. The Saudi government, elites and Muslim scholars are issuing increasingly dire predictions about the growth of Iranian power; they are manufacturing hysteria about an "Iran threat". Even Yusuf Qaradawi, the famous Egyptian preacher with a slot on Al-Jazeera, is criticizing Iran for allegedly spreading sectarian strife in Iraq. [3]
During the final stop in US Secretary of State Condoleezza Rice's recent trip to the Middle East, in Kuwait City, where Robert Gates, the defense secretary, joined her, Arab foreign ministers from Egypt, Jordan and the six members of the Gulf Cooperation Council stood together to produce a united front against Iran.
Within the past two weeks, stories of the kind that were planted to shape public opinion in support of the invasion of Iraq have begun appearing. On January 7, the London-based Independent led with an editorial warning: "The cycle of leak followed by denial should fool no one." [4] The editorial was in response to a claimed scoop in The Sunday Times on January 7 that two Israeli Air Force squadrons were practicing bombing runs on Iranian targets using low-yield nuclear "bunker-busters". [5]
The same reading of the situation comes out in US Senator Jay Rockefeller's recent complaint that the pre-Iraq script is now being played on Iran. [6] But since Rockefeller, chairman of the Senate Intelligence Committee, wants to challenge the shaped intelligence of the kind used during the invasion of Iraq, it is unlikely that the US will attack Iraq straightforwardly.
The attack could very well be made by Israel. But the Israelis have a problem: Iranian targets - as opposed to the Iraqi reactor, Osirak, which they bombed in 1981 - are spread all over Iran. This means that the limited-range F-15s and F-16s will need to refuel. The Israelis have airborne tankers for refueling, but they will need to be based somewhere near the attack site. Furthermore, access to Iranian airspace is also tricky because any country allowing Israelis such access would be considered a party to the attack.
Since the US will want and pretend to keep a distance initially between itself and an Israeli attack, the attack will not come via Iraqi airspace (which is controlled by the US-UK combine, regardless of the so-called sovereign government in Baghdad).
The attack might come via the Gulf countries. Does this explain the recent secret talks between the Israelis and the Saudis? The Iranians realize that it might be the Gulf countries that will allow passage of attack planes through their airspace, and therefore the Iranians are getting assurances from the "brotherly" countries in the area that they will not allow the use of their airspace for an attack.
Last week, while Sheikh Mohammed bin Zayed al-Nahyan, the United Arab Emirates' crown prince and deputy defense minister, was in Iran, the Iranians asked for assurances from him that the Emirates would not let their facilities be used by any outside force to attack Iran. In the end, it will be the Saudis who lend their facilities for an attack. If Israel is to attack Iran, the US will plead innocence and will only "react" after the attack once the Iranians block the Strait of Hormuz or bomb oil terminals along the Gulf.
Even if there is no open attack, a financial war on Iran has already begun. The idea is to cause a social revolution within the country. The Sunday edition of French newspaper Le Monde has written of a secret report prepared by the Foreign Affairs and Defense Commission of the Iranian Parliament analyzing the social, economic and political consequences of extended sanctions on Iran. [7]
The 100-page report argues that full sanctions will cause increased social and political unrest in Iran, jeopardizing internal stability. It says that if there is a full embargo, Iran will be able to make do for only a year. In face of this eventuality, the Iranian government has announced the rationing of gasoline.
The fear, however, is not unwarranted because, as Newsweek's Michael Hirsch puts it, US Treasury Under Secretary Stuart Levey is leading a "financial crusade" against Iran. [8] The main targets of pressure are Iranian banks. Recently, the Treasury sanctioned Bank Sepah, the fifth-biggest Iranian bank, by declaring it off-limits because of its "suspicious transactions" linked to the Iranian government. In addition to going after Iranian banks, the strategy involves pressuring banks in Europe, the source of 40% of Iranian imports, and Asia.
Commerzbank AG, the second-largest German bank, has announced that it will stop handling dollar-currency transactions for Iranian banks at its New York branch. Within the past four months, major European banks have rolled back their exposure to dealings with Iran. The impact is already being felt: a US$5 billion Japanese investment in Iran's oil-and-gas sector is in limbo because Japanese banks are nervous about doing business with the Iranians. Last month, Iranian Oil Minister Kazem Vaziri-Hamaneh acknowledged having difficulties in financing oil
projects. [9] Inflation in Iran has risen to 17%, the highest figure since the 1970s. [10]
The political repercussions of the financial squeeze are already visible: it is unnerving politicians, with rising criticism of President Mahmud Ahmadinejad from different factions within the government as well as the opposition. As Ahmadinejad presents the annual budget, he will be forced to cut back in an environment where government subsidies are very much central to the role of the state. This is potentially dangerous because he was elected with the support of the poor, to whom he had promised subsidized loans for housing. With inflation shooting up, real-estate prices rising and the Iranian rial fast losing value, Ahmadinejad's government will not be able to fulfill its promises, leading to increased anger and frustration among the populace.
Iran can expect to suffer terribly in the next few years, because the prize of the game is the Persian Gulf. The first chapter of this struggle in the new century began with the attack on Iraq in March 2003. The next stop will be Iran. As global oil reserves fall, the Gulf - with more oil and gas than anywhere else - becomes more central to the global economy and the global political order. As oil runs out slowly and competition for resources shifts to natural gas, Iran and Qatar, with the No 2 and 3 biggest reserves in the world, will become central. Any possible move toward increased nuclear-energy use will still leave transportation, where most oil is used in the US, dependent on oil.
The power that controls the Gulf will control global energy supplies, including supplies to the Chinese, Japanese, South Korean and Indian economies. At this point, those who disagree with this analysis will make this criticism: geopolitical analysis is not important because there is a global market in oil, so it does not matter from where the oil comes to the market as long as it does.
Yes, there is a global market in oil, and one barrel of oil available, regardless from where it comes, is just a barrel of oil. But geopolitical thinking in statecraft does not work on the way things are in the present. It works by both looking back and looking forward in the long term. Fear is central to the construction of political and economy strategy.
It is not only about what is rational; it is also about emotions - of what one fears - and the worst-case scenarios are always central. Thus if the globalized system in which we now live fails, we are back to geography - then a barrel of oil is not just a barrel of oil; it becomes a barrel of oil from a specific place.
That is why the Persian Gulf as a specific place is important and is becoming more important. An obstruction in energy supplies in the Gulf area would be enough to send Asian economies into a tailspin. At present, India gets 70% of its energy from imports; Japan 57%; China 40%; and South Korea 97%. [11] These imports are predominantly from Gulf countries. It is estimated that there will be a 53% increase in global energy demand by 2030, of which 70% will come from India and China. [12] As other places on the planet run out of oil, the Gulf will become more central.
This is not lost on the big Asian economies, and the past decade has seen their increasing engagement in the Middle East. Former Chinese president Jiang Zemin visited Saudi Arabia in 1999; current President Hu Jintao visited Saudi Arabia in 2006; India and Pakistan are in talks with Iran to lay an oil pipeline into South Asia; and Chinese and Indian national oil companies are increasingly active in the region. Iran as a state that shows independence in its policy stands in the way of outside control of the Persian Gulf via brute force, and therefore the "empire" will destroy it. Iran is the next, bloody stop in the fight for and against the Asian century.
Notes
1. Ahmed al-Jarallah, "US military strike on Iran seen by April '07: Sea-launched attack to hit oil, N-sites", Arab Times, January 14.
2. Gary Drosch, "What's behind the crash in crude oil?", Turkish Weekly, January 13.
3. Barbara Bibbo, "Al Qaradawi blames Iran for sectarian strife", Gulf News, January 21.
4. "Israel should give diplomacy more time to work", The Independent, January 8.
5. Uzi Mahniami and Sarah Baxter, "Revealed: Israel plans nuclear strike on Iran", The Sunday Times, January 7.
6. Mark Mazzetti, "Leading senator assails Bush over Iran stance", New York Times, January 20.
7. Laurent Zecchini, "L'Embargo qui fait peur? Tehran", Le Monde, January 20.
8. Michael Hirsch, "Emptying Iran's pockets", Newsweek, January 11.
9. Daniel Dombey and Gareth Smyth, "Europe, US squeeze Iran on nuclear plans", The Financial Times, January 8.
10. Amir Taheri, "Iran: The looming economic crisis", Arab News, January 20.
11. "World Energy Outlook 2006", Paris: Organization of Economic Cooperation and Development/International Energy Agency, 2006.
12. Ibid.
Amandeep Sandhu writes on South Asian and Middle Eastern affairs and is a chancellor fellow at the University of California, Santa Barbara. He can be reached at [email protected]
The Kuwait-based Arab Times has reported on a recent meeting among US administration officials to decide on a plan of action against Iran. [1] It quotes "reliable sources" dating the attack to April, a month before British Prime Minister Tony Blair leaves office. Whether or not the suggested date is right, or even if the attack does not come, there is something afoot.
Oil prices have fallen 17% over the past few months, now heading toward US$50 a barrel. Surprisingly, the Saudis are not interested in stemming the price drop. Ibrahim al-Naimi, the Saudi oil minister, during a recent trip to India said oil prices were headed in the "right direction". A close US ally, Nigeria, has Organization of Petroleum Exporting Countries chairmanship, and even though Venezuela and Iran have requested an early OPEC meeting, the Arab states of the Persian Gulf have all refused to schedule one to discuss oil prices.
This is in line with the Saudi plan laid out by Nawaf Obaid - a former special adviser to the Saudi ambassador in Washington - in the Washington Post a few months back in which Obaid outlined Saudi Arabia's course of action in the face of the growing conflict in Iraq and the probable US withdrawal from that country. The Saudis, Obaid stated, would act to lower global oil prices to weaken Iran and intervene in Iraq by supporting Sunni tribes.
The idea is to weaken Iran financially, because 85% of Iran's export income comes from oil and 40% of gasoline used in Iran is imported (even though it is the fourth-largest producer of crude oil) because of a lack of local refining capacity.
Financial-futures analyst Gary Dorsch reports that, contrary to analysis in the press that holds warm weather as the cause of falling oil prices, the real reason is that an excess of 700,000 barrels of oil is being produced by OPEC countries. [2] Only Saudi Arabia has the spare capacity to bring market prices down.
Add to that the growing hue and cry about the rising "Iran threat" that one hears in the Gulf Arab states. The Saudi government, elites and Muslim scholars are issuing increasingly dire predictions about the growth of Iranian power; they are manufacturing hysteria about an "Iran threat". Even Yusuf Qaradawi, the famous Egyptian preacher with a slot on Al-Jazeera, is criticizing Iran for allegedly spreading sectarian strife in Iraq. [3]
During the final stop in US Secretary of State Condoleezza Rice's recent trip to the Middle East, in Kuwait City, where Robert Gates, the defense secretary, joined her, Arab foreign ministers from Egypt, Jordan and the six members of the Gulf Cooperation Council stood together to produce a united front against Iran.
Within the past two weeks, stories of the kind that were planted to shape public opinion in support of the invasion of Iraq have begun appearing. On January 7, the London-based Independent led with an editorial warning: "The cycle of leak followed by denial should fool no one." [4] The editorial was in response to a claimed scoop in The Sunday Times on January 7 that two Israeli Air Force squadrons were practicing bombing runs on Iranian targets using low-yield nuclear "bunker-busters". [5]
The same reading of the situation comes out in US Senator Jay Rockefeller's recent complaint that the pre-Iraq script is now being played on Iran. [6] But since Rockefeller, chairman of the Senate Intelligence Committee, wants to challenge the shaped intelligence of the kind used during the invasion of Iraq, it is unlikely that the US will attack Iraq straightforwardly.
The attack could very well be made by Israel. But the Israelis have a problem: Iranian targets - as opposed to the Iraqi reactor, Osirak, which they bombed in 1981 - are spread all over Iran. This means that the limited-range F-15s and F-16s will need to refuel. The Israelis have airborne tankers for refueling, but they will need to be based somewhere near the attack site. Furthermore, access to Iranian airspace is also tricky because any country allowing Israelis such access would be considered a party to the attack.
Since the US will want and pretend to keep a distance initially between itself and an Israeli attack, the attack will not come via Iraqi airspace (which is controlled by the US-UK combine, regardless of the so-called sovereign government in Baghdad).
The attack might come via the Gulf countries. Does this explain the recent secret talks between the Israelis and the Saudis? The Iranians realize that it might be the Gulf countries that will allow passage of attack planes through their airspace, and therefore the Iranians are getting assurances from the "brotherly" countries in the area that they will not allow the use of their airspace for an attack.
Last week, while Sheikh Mohammed bin Zayed al-Nahyan, the United Arab Emirates' crown prince and deputy defense minister, was in Iran, the Iranians asked for assurances from him that the Emirates would not let their facilities be used by any outside force to attack Iran. In the end, it will be the Saudis who lend their facilities for an attack. If Israel is to attack Iran, the US will plead innocence and will only "react" after the attack once the Iranians block the Strait of Hormuz or bomb oil terminals along the Gulf.
Even if there is no open attack, a financial war on Iran has already begun. The idea is to cause a social revolution within the country. The Sunday edition of French newspaper Le Monde has written of a secret report prepared by the Foreign Affairs and Defense Commission of the Iranian Parliament analyzing the social, economic and political consequences of extended sanctions on Iran. [7]
The 100-page report argues that full sanctions will cause increased social and political unrest in Iran, jeopardizing internal stability. It says that if there is a full embargo, Iran will be able to make do for only a year. In face of this eventuality, the Iranian government has announced the rationing of gasoline.
The fear, however, is not unwarranted because, as Newsweek's Michael Hirsch puts it, US Treasury Under Secretary Stuart Levey is leading a "financial crusade" against Iran. [8] The main targets of pressure are Iranian banks. Recently, the Treasury sanctioned Bank Sepah, the fifth-biggest Iranian bank, by declaring it off-limits because of its "suspicious transactions" linked to the Iranian government. In addition to going after Iranian banks, the strategy involves pressuring banks in Europe, the source of 40% of Iranian imports, and Asia.
Commerzbank AG, the second-largest German bank, has announced that it will stop handling dollar-currency transactions for Iranian banks at its New York branch. Within the past four months, major European banks have rolled back their exposure to dealings with Iran. The impact is already being felt: a US$5 billion Japanese investment in Iran's oil-and-gas sector is in limbo because Japanese banks are nervous about doing business with the Iranians. Last month, Iranian Oil Minister Kazem Vaziri-Hamaneh acknowledged having difficulties in financing oil
projects. [9] Inflation in Iran has risen to 17%, the highest figure since the 1970s. [10]
The political repercussions of the financial squeeze are already visible: it is unnerving politicians, with rising criticism of President Mahmud Ahmadinejad from different factions within the government as well as the opposition. As Ahmadinejad presents the annual budget, he will be forced to cut back in an environment where government subsidies are very much central to the role of the state. This is potentially dangerous because he was elected with the support of the poor, to whom he had promised subsidized loans for housing. With inflation shooting up, real-estate prices rising and the Iranian rial fast losing value, Ahmadinejad's government will not be able to fulfill its promises, leading to increased anger and frustration among the populace.
Iran can expect to suffer terribly in the next few years, because the prize of the game is the Persian Gulf. The first chapter of this struggle in the new century began with the attack on Iraq in March 2003. The next stop will be Iran. As global oil reserves fall, the Gulf - with more oil and gas than anywhere else - becomes more central to the global economy and the global political order. As oil runs out slowly and competition for resources shifts to natural gas, Iran and Qatar, with the No 2 and 3 biggest reserves in the world, will become central. Any possible move toward increased nuclear-energy use will still leave transportation, where most oil is used in the US, dependent on oil.
The power that controls the Gulf will control global energy supplies, including supplies to the Chinese, Japanese, South Korean and Indian economies. At this point, those who disagree with this analysis will make this criticism: geopolitical analysis is not important because there is a global market in oil, so it does not matter from where the oil comes to the market as long as it does.
Yes, there is a global market in oil, and one barrel of oil available, regardless from where it comes, is just a barrel of oil. But geopolitical thinking in statecraft does not work on the way things are in the present. It works by both looking back and looking forward in the long term. Fear is central to the construction of political and economy strategy.
It is not only about what is rational; it is also about emotions - of what one fears - and the worst-case scenarios are always central. Thus if the globalized system in which we now live fails, we are back to geography - then a barrel of oil is not just a barrel of oil; it becomes a barrel of oil from a specific place.
That is why the Persian Gulf as a specific place is important and is becoming more important. An obstruction in energy supplies in the Gulf area would be enough to send Asian economies into a tailspin. At present, India gets 70% of its energy from imports; Japan 57%; China 40%; and South Korea 97%. [11] These imports are predominantly from Gulf countries. It is estimated that there will be a 53% increase in global energy demand by 2030, of which 70% will come from India and China. [12] As other places on the planet run out of oil, the Gulf will become more central.
This is not lost on the big Asian economies, and the past decade has seen their increasing engagement in the Middle East. Former Chinese president Jiang Zemin visited Saudi Arabia in 1999; current President Hu Jintao visited Saudi Arabia in 2006; India and Pakistan are in talks with Iran to lay an oil pipeline into South Asia; and Chinese and Indian national oil companies are increasingly active in the region. Iran as a state that shows independence in its policy stands in the way of outside control of the Persian Gulf via brute force, and therefore the "empire" will destroy it. Iran is the next, bloody stop in the fight for and against the Asian century.
Notes
1. Ahmed al-Jarallah, "US military strike on Iran seen by April '07: Sea-launched attack to hit oil, N-sites", Arab Times, January 14.
2. Gary Drosch, "What's behind the crash in crude oil?", Turkish Weekly, January 13.
3. Barbara Bibbo, "Al Qaradawi blames Iran for sectarian strife", Gulf News, January 21.
4. "Israel should give diplomacy more time to work", The Independent, January 8.
5. Uzi Mahniami and Sarah Baxter, "Revealed: Israel plans nuclear strike on Iran", The Sunday Times, January 7.
6. Mark Mazzetti, "Leading senator assails Bush over Iran stance", New York Times, January 20.
7. Laurent Zecchini, "L'Embargo qui fait peur? Tehran", Le Monde, January 20.
8. Michael Hirsch, "Emptying Iran's pockets", Newsweek, January 11.
9. Daniel Dombey and Gareth Smyth, "Europe, US squeeze Iran on nuclear plans", The Financial Times, January 8.
10. Amir Taheri, "Iran: The looming economic crisis", Arab News, January 20.
11. "World Energy Outlook 2006", Paris: Organization of Economic Cooperation and Development/International Energy Agency, 2006.
12. Ibid.
Amandeep Sandhu writes on South Asian and Middle Eastern affairs and is a chancellor fellow at the University of California, Santa Barbara. He can be reached at [email protected]
