Russia is the one state with the necessary clout, tools, sweeteners and relationships to nudge the Persian Gulf into a new security paradigm. Russia is teeing up a re-launch of its Collective Security Concept for the Persian Gulf Region.
By Pepe Escobar, posted with permission and cross-posted with The Cradle.
It’s impossible to understand the resumption of the JCPOA nuclear talks in Vienna without considering the serious inner turbulence of the Biden administration.
Everyone and his neighbor are aware of Tehran’s straightforward expectations: all sanctions – no exceptions – must be removed in a verifiable manner. Only then will the Islamic Republic reverse what it terms ‘remedial measures,’ that is, ramping up its nuclear program to match each new American ‘punishment.’
The reason Washington isn’t tabling a similarly transparent position is because its economic circumstances are, bizarrely, far more convoluted than Iran’s under sanctions. Joe Biden is now facing a hard domestic reality: if his financial team raises interest rates, the stock market will crash and the US will be plunged into deep economic distress.
Panicked Democrats are even considering the possibility of allowing Biden’s own impeachment by a Republican majority in the next Congress over the Hunter Biden scandal.
According to a top, non-partisan US national security source, there are three things the Democrats think they can do to delay the final reckoning:
First, sell some of the stock in the Strategic Oil Reserve in coordination with its allies to drive oil prices down and lower inflation.
Second, ‘encourage’ Beijing to devalue the yuan, thus making Chinese imports cheaper in the US, “even if that materially increases the US trade deficit. They are offering trading the Trump tariff in exchange.” Assuming this would happen, and that’s a major if, it would in practice have a double effect, lowering prices by 25 percent on Chinese imports in tandem with the currency depreciation.
Third, “they plan to make a deal with Iran no matter what, to allow their oil to re-enter the market, driving down the oil price.” This would imply the current negotiations in Vienna reaching a swift conclusion, because “they need a deal quickly. They are desperate.”
There is no evidence whatsoever that the team actually running the Biden administration will be able to pull off points two and three; not when the realities of Cold War 2.0 against China and bipartisan Iranophobia are considered.
Still, the only issue that really worries the Democratic leadership, according to the intel source, is to have the three strategies get them through the mid-term elections. Afterwards, they may be able to raise interest rates and allow themselves time for some stabilization before the 2024 presidential ballot.
So how are US allies reacting to it? Quite intriguing movements are in the cards.
When in doubt, go multilateral
Less than two weeks ago in Riyadh, the Gulf Cooperation Council (GCC), in a joint meeting with France, Germany and the UK, plus Egypt and Jordan, told the US Iran envoy Robert Malley that for all practical purposes, they want the new JCPOA round to succeed.
A joint statement, shared by Europeans and Arabs, noted “a return to mutual compliance with the [nuclear deal] would benefit the entire Middle East, allow for more regional partnerships and economic exchange, with long-lasting implications for growth and the well-being of all people there, including in Iran.”
This is far from implying a better understanding of Iran’s position. It reveals, in fact, the predominant GCC mindset ruled by fear: something must be done to tame Iran, accused of nefarious “recent activities” such as hijacking oil tankers and attacking US soldiers in Iraq.
So this is what the GCC is volunteering to the Americans. Now compare it with what the Russians are proposing to several protagonists across West Asia.
Essentially, Moscow is reviving the Collective Security Concept for the Persian Gulf Region, an idea that has been simmering since the 1990s. Here is what the concept is all about.
So if the US administration’s reasoning is predictably short-term – we need Iranian oil back in the market – the Russian vision points to systemic change.
The Collective Security Concept calls for true multilateralism – not exactly Washington’s cup of tea – and “the adherence of all states to international law, the fundamental provisions of the UN Charter and the resolutions of the UN Security Council.”
All that is in direct contrast with the imperial “rules-based international order.”
It’s too far-fetched to assume that Russian diplomacy per se is about to accomplish a miracle: an entente cordiale between Tehran and Riyadh.
Yet there’s already tangible progress, for instance, between Iran and the UAE. Iranian Deputy Foreign Minister Ali Bagheri held a “cordial meeting” in Dubai with Anwar Gargash, senior adviser to UAE President Khalifa bin Zayed Al Nahyan. According to Bagheri, they “agreed to open a new page in Iran-UAE relations.”
Geopolitically, Russia holds the definitive ace: it maintains good relationships with all actors in the Persian Gulf and beyond, talks to all of them frequently, and is widely respected as a mediator by Iran, Saudi Arabia, Syria, Iraq, Turkey, Lebanon, and other GCC members.
Russia also offers the world’s most competitive and cutting edge military hardware to underpin the security needs of all the parties.
And then there’s the overarching, new geopolitical reality. Russia and Iran are forging a strengthened strategic partnership, not only geopolitical but also geoeconomic, fully aligned to the Russian-conceptualized Greater Eurasian Partnership – and also demonstrated by Moscow’s support for Iran’s recent ascension to the Shanghai Cooperation Organization (SCO), the only West Asian state to be admitted thus far.
Furthermore, three years ago Iran launched its own regional security framework proposal for the region called HOPE (the Hormuz Peace Endeavor) with the intent to convene all eight littoral states of the Persian Gulf (including Iraq) to address and resolve the vital issues of cooperation, security, and freedom of navigation.
The Iranian plan didn’t get far off the ground. While Iran suffers from adversarial relations with some of its intended audience, Russia carries none of that baggage.
The $5.4 trillion game
And that brings us to the essential Pipelineistan angle, which in the Russia–Iran case revolves around the new, multi-trillion dollar Chalous gas field in the Caspian Sea.
A recent sensationalist take painted Chalous as enabling Russia to “secure control over the European energy market.”
That’s hardly the story. Chalous, in fact, will enable Iran – with Russian input – to become a major gas exporter to Europe, something that Brussels evidently relishes. The head of Iran’s KEPCO, Ali Osouli, expects a “new gas hub to be formed in the north to let the country supply 20 percent of Europe’s gas needs.”
According to Russia’s Transneft, Chalous alone could supply as much as 52 percent of natural gas needs of the whole EU for the next 20 years.
Chalous is quite something: a twin-field site, separated by roughly nine kilometers, the second-largest natural gas block in the Caspian Sea, just behind Alborz. It may hold gas reserves equivalent to one-fourth of the immense South Pars gas field, placing it as the 10th largest gas reserves in the world.
Chalous happens to be a graphic case of Russia-Iran-China (RIC) geoeconomic cooperation. Proverbial western speculative spin rushed to proclaim the 20-year gas deal as a setback for Iran. The final breakdown, not fully confirmed, is 40 percent for Gazprom and Transneft, 28 percent for China’s CNPC and CNOOC, and 25 percent for Iran’s KEPCO.
Moscow sources confirm Gazprom will manage the whole project. Transneft will be in charge of transportation, CNPC is involved in financing and banking facilities, and CNOOC will be in charge of infrastructure and engineering.
The whole Chalous site has been estimated to be worth a staggering $5.4 trillion.
Iran could not possibly have the funds to tackle such a massive enterprise by itself. What is definitely established is that Gazprom offered KEPCO all the necessary technology in exploration and development of Chalous, coupled with additional financing, in return for a generous deal.
Crucially, Moscow also reiterated its full support for Tehran’s position during the current JCPOA round in Vienna, as well as in other Iran-related issues reaching the UN Security Council.
The fine print on all key Chalous aspects may be revealed in time. It’s a de facto geopolitical/geoeconomic win-win-win for the Russia, Iran, China strategic partnership. And it reaches way beyond the famous “20-year agreement” on petrochemicals and weapons sales clinched by Moscow and Tehran way back in 2001, in a Kremlin ceremony when President Putin hosted then Iranian President Mohammad Khatami.
There’s no two ways about it. If there is one country with the necessary clout, tools, sweeteners and relationships in place to nudge the Persian Gulf into a new security paradigm, it is Russia – with China not far behind.
Something to note – new language that takes us away from the infernal ‘middle-east’.
Note this paragraph: “And then there’s the overarching, new geopolitical reality. Russia and Iran are forging a strengthened strategic partnership, not only geopolitical but also geoeconomic, fully aligned to the Russian-conceptualized Greater Eurasian Partnership – and also demonstrated by Moscow’s support for Iran’s recent ascension to the Shanghai Cooperation Organization (SCO), the only West Asian state to be admitted thus far.
You falling empire want to talk Indo Pacific and in this way try to reformat. We the resistance will talk West Asia, to put you in your place.
Amarynth: The “spirit” you display in your writing is infectious and much appreciated. Pepe’s description of Biden’s convoluted crisis of impossibles is also a delight to read. I love the bit about the Republicans toying with the idea of impeaching Biden for doing the same shit that they do all the time. It reminds me of what a woman opined recently out here in the Pacific Northwest recently; “even the collapse will be beautiful.”
Please keep up with you sharp comments. I love them.
Brave, honerable Amerynt!
For Europeans to talk about the “Middle East” is an absurd conceddion to the North Americans that they are the Middle Kingdom of this Earth. “West Asia” is much better for all — and maybe good psyko-therapy for the mad US of North America and its deluted folk with its diluted understanding.
Also, all talk of “The West” is sort of stange and bisarre to those of us who believe the Earth is round.
I can think of many other alternatives for the describing “The West”. The problem is, they all start with F.
Iran is West Asia, but within the context of the Islamic-Arab world, Iran is the center/ Or, if you prefer, very close to the geographic middle of this World.
Why they hate China? The people spend millions on pharmaceutical companies when you can take a hike up a mountain to a wise Chinese man experienced in herbal medicines to cure you. China helps the working class all over the world with cheap goods so they can have a family at some point, and be able to sustain it. They hate Iran because instead of taking a trip to a psychiatrist for internal problem one just has to turn to the Mullah, or open the Quran and find comfort and sanity. Why they hate Russia? Because Russia helps the victim confront the school yard bully. This all metaphoric language but I hope it brings to light what the west hates these countries they’re wise, spiritual, and resistant, and efficient and ”selfless” in the manner they try help those in need.
LoL! If only life were so simple. Maybe in Kung Fu movies. The ‘good’ countries vs the ‘bad’ countries. The US and the West have many sins to be sure. But so does everyone else, not least China. As a wise prophet is once purported to have said ‘Let he who is without sin cast the first stone’. Remember, before you embrace mass slaughter of many innocents, there are VASTLY more good people in the West than bad. Hence the complexity. How to get rid of the evil without destroying all the good and everything else. As a Christian (one who follows the teachings of Jesus Christ), I’ll bet that keeps VVP up at night. Joe Biden?.. not so much.
vastly more good people in the west? that statement alone deserves a soul searching look indeed.
People in the West generally believe that because they pay their taxes and recycle and abide by the law, that they are good people.
Can’t fault their logic. But I would say instead that most people in the West are good citizens.
Being a good person comes from living an impeccable life, not from adhering to social norms that change from age to age and country to country.
Far from me to judge, but if I were called to do so, I would say that there are very few good people left in the world today, in the West or anywhere else.
John 8: 6-7
No Christian would describe Jesus Christ as “a prophet”. That is a Muslim designation
“As a wise prophet is once purported to have said ‘Let he who is without sin cast the first stone’. Remember, before you embrace mass slaughter of many innocents, there are VASTLY more good people in the West than bad.”
Speaking of the mass slaughter of many innocents, it’s the self-appointed Leader of the Free World (sic), Land of the Free, and Beacon of Liberty that leads the planet in bombing other countries back to the Stone Age and murdering millions of people as a result.
Meanwhile, the vast majority of the supposed good people in this war criminal nation still live in their Hollywood-style unreality and delude themselves that they are a Shining City on a Hill chosen by their so-called God as a “light unto nations”–even as they dutifully spout their daily Two Minutes of Hate against Russia, China, Iran, or other hated enemy nations.
U.S. Military and CIA Interventions Since World War II
If the US administration is really extremely desperate about inflation why did they approve a 2 trillions investment package which means more debt and low interest rates and thus more inflation?
Plus I would mention the meeting of democracies organized by the US. Biden invited guaido. Which means they do not recognize Maduro no matter what. Venezuela is also full of oil and if what the US wants to do is to bring down the oil prices at all costs they could lift all sanctions preventing Venezuela from selling its oil. It would be much easier than with Iran because with Venezuela Israel is not involved.
Furthermore the US is threatening to put sanctions on Russia in case of escalation in ukraine. The US is pushing for escalation like a mad man talking about a Russian attack 24/7. Those sanctions will target Russia s oil and gas sectors. It’s hard to say that those sanctions would help the US to bring down the price of fossil energy.
Finally I don’t know why would China get involved in a gas project in Iran to sell that gas to Europe. China needs gas and oil. It would make more sense to imagine China investing money to develop the gas market in Iran to then buy that gas. Plus China is interested in buying fossil energy in yuan. There are not many countries accepting other currencies than the dollar to sell their oil and gas. Currently only Russia and Iran agree to do that. China could buy iranian gas in yuan and Iran could sell its gas without any threats from the US because the dollar would not be involved.
Simple, Russia sends more NG to China. Europe will have to step up its NG consumption (“green energy” aside- nuclear being dismantled, which in the long-run really has to happen); there will be plenty of “market” for both Russia and Iran: Russia will have the market for now, which will go a long way to paying for a fair amount of the Nordstream II costs.
At one point there will be a large interconnect between the pipelines allowing Russia to shift gas from East to West or vise-versa. Right now the “Power of Siberia” goes to China and “North Stream2” to Europe. Such a well integrated system will be able to shift resources on a moment’s notice across one or more time zones (Russia has eleven), being able to load balance peak daily demand.
A connection with Iran makes this sort of arrangement even more valuable. This system integration is much less complex than for the electricity grid where there are varying standards, frequency synchronization problems and inadequate capacity interconnects. Gas can be easily stored, electricity not.
The current generation of nuclear power is being dismantled. There will be a replacement though as the windmills and solar panels are inadequate to power electrified transport. Rosatom is in a good position to supply a lot of that demand.
I wonder what the monetary effects of this gas deal will do to the US$ and Euro ?
What would Iran be paid in – Euros ? How will that go down in the US or UK ?
I’d long ago figured that Russia held the cards vis a vis taking the legs out from under the USD (as world’s reserve currency). More energy trade outside of the USD would increase pressure for other fossil fuel producers to do the same. At some point there will be critical mass and the USD would collapse. Again, Russia’s hand is a LOT stronger than most realize: I would be surprised if all this wasn’t known by US intel; likely why the constant hammering on Russia. Russia just needs to keep going along just as it’s doing.
NOTE: Oil constitutes the largest trade market by far. Shift USD-denominated trade out and that pretty much kills the USD.
Yuan for oil
Gazprom Neft, the oil arm of Russian gas giant Gazprom, is starting to settle payments for the jet fuel it supplies in China in yuan, instead of in US dollars, the company’s Alexander Dyukov has said.
Don’t be surprised if all suddenly popped up some new kind of international recognised money to be used between states you named plus China RF-all southeastern Asia. That going to be great job and what gonna happening to overpriced $ ? It’s going to be very good toilet paper
What is the implication that Chalous will be overlooked for Libya’s natural gas? I mean, after all, it is a sitting gas tank right there just south of Europe.
Literally one and a half-hour flight from Italy. A straight shot for underwater pipeage straight to Europe. Even to Greece for that matter.
And it is interesting that Libya was brought up just recently as a talking point in the Trilateral Summit for Multilateralism between Russia, China, and India.
Just wondering. As my family happens to come from Libya.
The issues in Libya are oil is king. Gas, though once upon a time, Libya was the #2 exporter of LNG, it barely produces enough gas for its electrification needs. Turmoil, war and lack of a coherent government are the issues delaying Libya’s development.
It doesn’t export LNG according to this data (2019).
It does seem to export via pipelines about half its production.
Proven natural gas reserves (billion c.m.) 1,505
Natural gas marketed production (billion c.m.) 9.04
Pipeline exports (billion c.m.) 4.27
LNG exports (billion c.m.) 0.00
Domestic natural gas consumption (billion c.m.) 4.77
There is a Libyan pipeline to Sicily. https://en.wikipedia.org/wiki/Greenstream_pipeline
The Egyptians have huge gas reserves also, as do the Israeli’s, Turks, Cyprus and Greeks, all hoping they can enter the European market when their gas fields begin to be exploited. Algeria has pipelines to Spain and Sardinia.
We all grieve for what the US and NATO and the French in particular have done to Libya.
Yes, you are correct. Libyan cities experience major power outages. But I think electric power in Libya is generated via diesel fuel.
Once upon a time, Libya actually supplied Tunisia with electric power from Libya’s grid. And Libya also supplied the western side of Egypt with electricity and oil, LNG from a major deal between Mubarak and Gaddafi.
Libya as it stands now is a total failed state. Do you know why? And I’m talking now. Because of rampant corruption. I think Libya scores # 17 in the Global index out of 200plus countries.
Thanks for your reply Larchmonter445.
Great news for the long suffering Iranians. And an excellent article Mr Escobar.
” … if his (Biden’s) financial team raises interest rates, the stock market will crash and the US will be plunged into deep economic distress.”
Assuredly it will. But it should not be forgotten that if the US$ crashes – and this seems to be increasingly the case as the US raises its interest rates – this will impinge on all those states whose currencies is tied to the US$. This will be followed by a tit-for-tat trade war as each state tries to export its problems onto the global hegemon which will be reciprocated by the US.
In Germany during the pre-WW2 war the crack-up boom and inflation during the early 1920s was followed by a massive global deflation in all the nation states, during the early 1930s which affected the whole world. This was instanced by the global tariff war – in the US with the Smoot-Hawley tariff – followed by the shooting war in the 1940s.
All of which goes to show that you cant simply turn the global economy off and on like a light switch.
Chalous gas field ….first they need to tackle Azerbaian. In any case, more such articles are needed.
Seems that the empire, the Salman Kingdom and the havanaguilla dancers have nt been struck by a transcendant wind of luck in their incursions in the geopotilical game.
The latest blow was the giant gas reserves that have fallen in the lap of the gut hated ayatollahs.
Come on, they already had what it takes: determination, the Ormuz corridor, oil, strong allies, uranium enrichment as required, lots of missiles and a homemade tecnology of their own. And now, big untapped gas gold mine under Persian waters.
This isn’t up to Escobar’s usual high standards, and for two reasons:
(1) It isn’t up to Biden’s “financial team” to raise interest rates. This is a decision made by the Federal Reserve. Now granted, the Fed plays politics all the time, but it doesn’t take orders from Biden. It may decide to help him out, but that isn’t a given. In particular the Fed is facing enormous pressure to raise interest rates now rather than wait until after the 2022 elections (which the Democrats are almost certain to lose anyway).
(2) Iran insists–rightly–that all sanctions be lifted. But a large number of the sanctions were imposed by Congress, not by executive order, and can’t be removed by executive order. Moreover, removing any of the sanctions would be political suicide. Even if the voters didn’t care all that much one way or another, the lobbyists sure do.
Iran, like Russia, would be well advised to sell its gas to Asia. In honoring the terms of the JCPOA the Europeans have shown themselves just as non-agreement capable as the USA, and Iran should just write them off as a loss until such time (should it ever come; it probably won’t) that European vassal states of the USA start honoring the JCPOA terms, returning money and assets stolen from Iran, etc.
Your point number one.
Whose problem is that? I would say that Escobar used a fair description that would fit in a diplomatic world.
Point number two.
Again, if some sanctions were imposed by US congress, whose problem is that? It is not the problem of the Iranians.
They are standing their line solidly – it wants all US sanctions that violate the 2015 agreement to be removed.
Here is this morning’s report and Prof Marandi has a few words to say. The ‘outside players’ of course is Israel that is literally screaming on the sidelines.
I have great admiration for Iran that is simply saying NO! Reset this clock to the time that you left the agreement. I saw a humorous statement from someone, saying that the US can have a ticket to the JCPOA and the cost of that ticket is lifting the sanctions. I don’t believe there are many of the negotiators that disagree here. But if the US made their problems, then they must unmake them, and this time with guarantees.
Note it is the same that Russia is literally demanding now! Guarantees from a non-agreement capable entity in order to try and force them to be true to their own words.
Congress has no power to enforce sanctions. The Executive Branch has to follow the law and their enforcement is what has to happen. However, there are a thousand ways not to enforce sanctions if that is what the President chooses. All the Congress could do is hold hearings and make a loud noise that their sanctions aren’t being enforced.
A lot of posturing is for Israeli recognition of support and campaign funds for the Congressmen from Jewish contributors.
AIPAC (American Israeli Public Affairs Committee) has a near-total stranglehold on the U.S. political scene. Especially Congress.
It’s so bad that American judges are on the take. Remember the lawsuit on 9-11, where a judge from the New York circuit penalized Iran for responsibility for the tragedy. I believe It was a $2 billion dollar penalty from Iran’s frozen assets held by the U.S.
A little off-topic, but still somewhat relevant.
Many, many decades ago when I was 4-5 years old, my father told me about US judges. He told me it was their payments to the political party that got them their appointments/won them their elections. Nothing much has changed. The Courts are very politicized, very ideological. Blue states are Liberal mostly, and Red states are Conservative mostly. The split in ideologies many years back sometimes created a synthesis in the middle, a compromise on some issues. Today, the extremes fight to the death for total victory.
Most every level and branch of government in the US is now corrupted.
Pepe as always, an outstanding article: In essence, Russia-China-Iran are the basis of the world economic order, instead of the world order and world governance war, which took new forms humanitarian war, war is peace and a democratic foundation worse than fascism. More and more countries are behind the economy in which everyone wins, so the West and the United States are collapsing, and that is the benefit for humanity. So the new essence of humanity is the East, the West is collapsing.
Russia represents European continent. China represents Asia. Iran represents the Islamic-Arab World. I do not know which countries represent Las Americas or Africa. Anyway, essence of Humanity is not change and is the same in west, east, north or south.
Great article by Pepe.
But I doubt that China will devalue to yuan just to acquire less (and rapidly depreciating) dollars for their manufactured goods. I see China continuing to re-orient trade away from the United States.
The hypothesis about Iran is fascinating. Removing sanctions so that the US can get cheaper oil. Iran must certainly understand that Russia and Iran are moving towards an energy stranglehold. It will be interesting to see how this plays out.
it suddenly seems the world is awash with LNG and/or LPG. atleast in West Asia and North Africa. better get NS2 flowing fast…
amarynth: You waste a lot of words making my points. Thanks, I guess.
She wrote for you edification. Rudeness here is not well received, especially by us, friends of Amarynth.
Check your ego at the door and carry on with your thoughts in a less confrontational manner.
I very much agree with Larch445: your comment is:
1) useless (no objective contents)
3) unwelcome here
Please leave the blog and don’t come back
Apologize to Amarynth, that would be the honorable thing to do.
What i see from the outside is that biden administration is in a internal all-out-war between obamists vs neocons vs clintonists, with the latter two merging and fighting each other at the same time. The best move from them, the way i see, is to lift and help venezuela reconstruct its oil bases, with an agreement that they, the Venezuelans, would flow tons of oil into the market. That would strenghten venezuela and future pink tie in latinamerica, but it would not strenghten iran or china for that matter, it would give them more time to think it through