Entangling the dragon in Middle-Eastern quicksands

The quicksands of the Arabian Desert are notorious for swallowing up anyone trying to control the area. Historically, that’s what happened to Turkey, Britain, France, Russia and the US. Sooner or later, all discovered that instead of dominating the Middle East, they ended up being dominated by the region’s never-ending problems.

And that may also be the fate of China, the latest power to be lured by the idea that it has to engage in Middle-Eastern diplomacy. Unless decision-makers in Beijing are thoroughly prepared for what awaits, they will also find that the region can absorb all their energies, and usually for no practical effect.

Israel turns to Russia’s Gazprom on gas project

As the article hits out, the Israelis would rather deal with worse terms under American businesses. This is likely due to the fact they are also not state-owned as Gazprom is. Dealing with state-owned means you’re dealing with the government. In this case of the government being Russian, the potential for industrial espionage is what we’re looking at. Their history is long in this department. The deal might be better than their American counterparts, but why take the chance?

Industry sources said Israel’s Delek Group has been negotiating with
Russia’s Gazprom to buy a stake in the Leviathan gas field in the
Mediterranean Sea. They said Delek wants to recruit Gazprom but has been opposed by a leading partner, the U.S. firm Nobel Energy.

Iran Says It Can Live Without Oil Money

Although it’s not known what “Plan B” would be, and being that oil revenues make up half of the government funding (as the article points out), a plausible guess would be on the exporting of nuclear energy since that progam is quite large and developed by now. Only time will tell.

Iran says it may stop exporting oil if international sanctions against it are intensified, adding that it has a contingency plan for running the country without oil revenues.

According to Reuters, Iranian Oil Minister Rostam Ghassemi told reporters in Dubai on Tuesday October 23: “If sanctions intensify, we will stop exporting oil.”

“We have prepared a plan to run the country without any oil revenues,” he added. “So far to date, we haven’t had any serious problems, but if the sanctions were to be renewed we would go for ‘Plan B’.”

In Historic First China Begins Oil Extraction In Afghanistan

In a surprising (if not quite shocking) move, late on Friday Canada blocked Petroliam Nasional Bhd.’s C$5.2 billion takeover of Progress Energy Resources Corp. saying the bid by the Malaysian state-owned company “wasn’t in Canada’s national interests.” As BusinessWeek explains, “in what investors say is a test case for the $15.1 billion bid by CNOOC Ltd. of China for Calgary-based Nexen Inc., the Canadian government said it “was not satisfied that the proposed investment is likely to be of net benefit to Canada,” according to an Oct. 19 statement from Industry Minister Christian Paradis.” While it is unclear precisely what would be of “net benefit to Canada” what is certain is that the Progress Energy move will crush investor spirits who in recent months have expected a flurry of foreign bids coming for local energy names, only to be left at the altar courtesy of government intervention.

China sends ships back to waters off disputed Japanese-controlled islands

The four maritime surveillance ships entered the waters shortly after 12.30pm (3.30am GMT), Japan’s coastguard said in a statement, adding that it was telling the ships to leave the area.

“Patrol ships from our agency have been telling them to sail outside of our territorial waters. There has not been any response” from the Chinese ships, the agency said.

Iran’s elite commando force running oil sector, bypassing sanctions

Time and time again, history has proven that third-world economies have no bottom, no matter the amount or severity of sanctions. So long as China and Russia keep backing the Iranian regime, and as long as energy resources are in high demand world-wide, they will likely never be stopped without resorting to war.

WASHINGTON — The United States has determined that the Islamic
Revolutionary Guard Corps was directing Iran’s state-owned oil sector.

The U.S. Treasury Departrment said the state-owned National Iranian Oil Co. was controlled by IRGC, which was helping the firm bypass international sanctions on Teheran’s energy sector.

Treasury said IRGC was increasing its control over National Iranian Oil as the elite military sought clients for Iran’s sanctioned crude oil exports.

“Under the current Iranian regime, the IRGC’s influence has grown within NIOC,” Treasury said on Sept. 24.

Full article: Iran’s elite commando force running oil sector, bypassing sanctions (World Tribune)

Armada of British naval power massing in the Gulf as Israel prepares an Iran strike

An armada of US and British naval power is massing in the Persian Gulf in the belief that Israel is considering a pre-emptive strike against Iran’s covert nuclear weapons programme.

Battleships, aircraft carriers, minesweepers and submarines from 25 nations are converging on the strategically important Strait of Hormuz in an unprecedented show of force as Israel and Iran move towards the brink of war.

Western leaders are convinced that Iran will retaliate to any attack by attempting to mine or blockade the shipping lane through which passes around 18 million barrels of oil every day, approximately 35 per cent of the world’s petroleum traded by sea.

Full article: Armada of British naval power massing in the Gulf as Israel prepares an Iran strike (The Telegraph)

EU welcomes Russia’s accession to WTO

For those that have thoroughly followed developments on Russia in great detail like a hawk, they realize that underlying factors making the Soviet Union communist have never changed, as evidenced by its engineered collapse. Since then, we have been given New Lies for Old in thinking they were a backwards nation striving for democracy. Through a Perestroika Deception during the last few decades they have appeared legitimate and now have been legitimized via duped and/or cooperative nations.The best example of what’s to come from Russia is to look towards China. They formally joined the WTO on Dec. 11, 2001 and look how far 11 years has brought them on the world stage politically and militarily due to their sharp rise in economic gains.

When they start tightening the screws on us as China has done via economic warfare (buying our debt and yet capable of pulling the plug at any moment) or worse, we can’t say we weren’t warned. The United States has been compromised.

Meet the superpower that never was truly gone. The bear is back.

Russia becomes last large economy to agree to global trade rules.

The European Commission has welcomed Russia’s admission today to the World Trade Organization as a “major step” that offers “plenty of business opportunities for both Russian and European companies”.

Karel De Gucht, the European commissioner for trade, said that Russia’s accession – which comes 19 years after it began talks with the global trade body – was “a major step for Russia’s further integration into the world economy”.

Russia, which has a population of 140 million and is a leading exporter of oil and gas, is the 156th country to join the World Trade Organization (WTO) and the last large economy to join the body, which sets trade rules and helps to resolve trade disputes. According to the WTO, Russia’s accession means that 97% of all world trade will now take place between its members.

De Gucht said that he hoped that membership would “help to accelerate the modernisation of the Russian economy”. Modernisation has become the key word in the EU’s relationship with Russia since 2010, when Russia’s accession process entered its final phase and when the EU and Russia launched a ‘partnership for modernisation’.

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The WTO agreed to admit Russia on 16 December, weeks after Georgia became the last country to agree to Russia’s admission. Georgia withdraw its support for Russian membership in 2006 in response to a series of disputes, and reinforced its opposition in 2008, after Russian forces entered Georgia following Georgia’s attack on the breakaway region of South Ossetia. Tbilisi then insisted that it should monitor trade along the borders between Russia and South Ossetia and another breakaway region, Abkhazia, both of which Moscow recognised as independent states after the war in 2008. Under November’s agreement between Moscow and Tbilisi, a Swiss company will monitor trade between the two countries.

The Russian parliament ratified the WTO agreement on 11 July and it was signed by Russian President Vladimir Putin on 21 July, setting in motion a 30-day preparation for accession.

The Russian government and economists believe that membership of the WTO will be good for Russian consumers and for a range of sectors of the economy, including agriculture, tourism, engineering, metallurgy and petrochemicals.  However, Russian sceptics about the deal fear that WTO rules could hurt Russian businesses operating in industries such as finance, car manufacturing and forestry.

The WTO’s rules will not fully apply in the US, where a Cold War-era restriction that links Russian trade access to rules on emigration – the Jackson-Vanik amendment of 1974 – remains in law. The restriction is, however, routinely waived in practice.

Full article:  EU welcomes Russia’s accession to WTO (European Voice)

Europe starts stockpiling oil as Iran conflict looms

European governments are rushing to boost stockpiles of crude oil and fuel, anxious to comply with new EU rules and amid reports that Israel is preparing to launch an attack on Iran.

Belgium and the Netherlands have issued tenders to import a total of around 250,000 tonnes of diesel and gasoline for delivery in September and October, their agencies said.

France has also bought diesel and awarded a crude oil tender this week while Belgium is increasing its crude stocks.

“This is yet another unexpected source of support for oil demand… [It] shows how the geopolitical concerns about Iran and Syria are bullish for oil even in the absence of an actual supply disruption,” said Seth Kleinman, head of energy research at Citi.

Iran tensions

European governments appear to be preparing for further supply disruptions in the Middle East as tensions have mounted between Israel and Iran over Tehran’s nuclear programme.

Israeli media have reported that Prime Minister Benjamin Netanyahu has decided to launch an attack on Iran’s nuclear facilities in the Fall.

Iranian President Mahmoud Ahmadinejad reacted on Friday, calling Israel a “cancerous tumour” with no place in a future Middle East, drawing an unusually strongly-worded condemnation by EU foreign policy chief Catherine Ashton.

Ashton is acting as chief negotiator for six powers – the United States, Russia, China, France, Germany and Britain – that are trying to persuade Iran to scale back its nuclear programme through economic sanctions and diplomacy. They fear Iran’s nuclear programme aims at producing weapons, though Tehran says it serves peaceful purposes only.

EU oil stock directive

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An EU directive passed in 2009 and designed to mitigate the impact of a supply crisis requires EU members to hold reserves equal to 90 days of average daily net imports or 61 days of average daily consumption ahead of a December 31 deadline.

One third of the stocks must be held in products, according to the EU directive.

“We are in the process of building stocks to meet our strategic obligations under the new EU rules,” said Alain Demot, general manager of Belgium’s Apetra, adding that more tenders would be issued in coming months.

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NEXT STEPS:

• 31 Dec. 2012: Deadline for member states to communicate measures taken under the EU’s oil stock directive. Under the directive, oil stocks must correspond “at the very least, to 90 days of average daily net imports or 61 days of average daily inland consumption, whichever of the two quantities is greater.”

Full article: Europe starts stockpiling oil as Iran conflict looms (EurActiv)

Taiwan jumps into South China Sea fray

China is on the ‘charm’ offensive to rein in Taiwan.

Last week, James Chou, deputy director general of the Taiwanese Ministry of Foreign Affairs, stressed that the disputed islands of the South China Sea were the “undisputed territory” of the ROC. Additionally, Chou expressed a strong desire for the ROC to take part in any multilateral mechanism in resolving the long-standing territorial impasse. He said any resolution of the conflict that did not involve the ROC would be “regrettable”.

Chou’s assertion of the “undisputed” nature of Chinese sovereignty in the area echoed the recurring message of the Foreign Ministry of the People’s Republic of China. Both the mainland-based PRC and the ROC maintain the same “nine-dotted line” claim to the vast majority of the South China Sea. It is important to note that the current official policy of both Taipei and Beijing is that there is “one China”, and both governments strongly agree on Chinese sovereignty in the South China Sea. The pivotal disagreement of cross-strait relations hinges on which of the two governments is the legitimate ruler of China itself.

Even more interesting, a high-ranking government official in Taipei has recently called for a ROC-PRC economic alliance in the South China Sea. Chiu Yi, an important member of Taiwan’s ruling Kuomintang (KMT) party and an executive in the state-owned energy company CPC, has called for open cooperation between the PRC and the ROC in extracting resources from the disputed waters: “The seabed around Taiping Island has abundant reserves of oil and natural gas … The merit would be great if a cross-strait joint development project is done.” [3]

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The ROC Foreign Ministry’s recently stated desire to participate in any multilateral mechanisms for resolving the maritime dispute is particularly telling. Beijing’s insistence on a strict “one China” policy has excluded Taipei from most international organizations. However, Taipei’s participation in a multilateral, negotiated settlement to the South China Sea impasse would likely strengthen the joint Chinese claims of sovereignty over key islands.

Rumors are now circulating of a grand bargain being negotiated between Taipei and Beijing. Joint PRC-ROC cooperation in the South China Sea may be exchanged for Beijing’s approval of Taipei’s participation in some international organizations. Issues of sovereignty would need to be carefully addressed in any deal, but the potential for mutual benefit is significant.

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Joint PRC-ROC cooperation in the South China Sea would also pose a significant challenge for US policy. The US government has been strengthening military ties with the Philippines and Vietnam with the unstated aim of containing Chinese ambitions in the area. Meanwhile, Taiwan has long been a US ally. If Chinese nationalism remains politically ascendant in Taiwan, and a joint PRC-ROC alliance is formed in the South China Sea, the US will find itself in a very awkward position.

Full article: Taiwan jumps into South China Sea fray (Asia Times Online)

Standard Chartered Takes Sides with $250 billion against America?

An excellent and well-sourced article by Kevin D. Freeman. Click the link for the full story.

There is a story out today about how Standard Chartered allegedly hid $250 billion in 60,000 transactions with Iran that could have been used to fund nuclear development or even terror activities. This story, if true, blows away the arguments that no one would work against U.S. interests in the financial realm. The size and volume of the transactions is extraordinary. And, the investigation uncovered an attitude that is clearly against American interests. If all of this is true, we hope that it will wake up regulators to even more serious vulnerabilities in our system. Remember, we documented how a single one billion transaction roiled our Treasury markets a little over a year ago. These transactions total a quarter-trillion dollars!

We have pointed out the extraordinary arrogance contained in the idea that the world’s financial system is U.S. centric. In fact, in our previous post on this subject, Our Paper or Their Oil, we said the following:

A high-stakes drama is playing out now between the United States and Iran. On this blog, in our book Secret Weapon, in speeches and media interviews, we  have been warning about the reality of global economic warfare. For several years, our government has ignored this reality. The good news is that just recently the government has begun to recognize economic weaponry. The bad news is that the government has approached the subject with typical American arrogance. The worse news is that we may all be hurt as a result.

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The news from Standard Chartered, a British-based multinational bank operating in 70 countries, provides a decent proxy of world opinion. The primary reason that the world continues to deal with Iran is that they have Oil. We are fighting with paper. Here is a telling quote from the CNBC story:

Regulators, quoting a New York bank branch officer, said the group director replied: “You f—ing Americans. Who are you to tell us, the rest of the world, that we’re not going to deal with Iranians.”

Here are important quotes from the New York Times story:

The bank “left the U.S. financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes,” the agency said in an order sent to the bank Monday …

The department accused the bank of undermining the safety of New York’s financial system through a range of violations including “falsifying business records” and “obstructing governmental administration,” according to the order.

Suspecting that Iranian banks were using their financial institutions to finance its nuclear weapons program, the United States Treasury Department banned certain transactions between Iranian banks and United States financial institutions in 2008.

Make no mistake, this is a global economic war. The international financial system is not serving American interests and as we have proven can be used as a weapon in the global economic war (seewww.SecretWeapon.org). Sadly, this is a shock to most Americans.

Full article: Standard Chartered Takes Sides with $250 billion against America? (Kevin D. Freeman)

10 Ways Attacking Iran Could Destroy The United States

The website itself is a crock, but the list is really worth considering. Here’s number eight:

8) Sleeper Agents Launch A War Along US Mexico Border

According to the US Congress, quoting US intelligence officials, Iran has set up an elaborate gun smuggling network within Mexico and has used Hezbollah to infiltrate the Mexican Drug Cartels. After the United States attacks Iran these agents quickly launch attacks along the Mexico border. The cartels are more than happy to provide foot soldiers for the war because instability means more drugs entering the United States and more profits.

Soon a sophisticated network of Hezbollah narcotunnels along the border are used to wage attacks on several US law enforcement and civilian control agencies. The resulting turmoil also weakens the agencies inside of Mexico fighting the cartels with the assistance of the US. Soon the destruction of various targets along the border bring the entire area under the control of the drug cartels and Iranian Hezbollah agents and the entire US Mexico border turns into an uncontrolled war zone.

Full article: 10 Ways Attacking Iran Could Destroy The United States (Hamsayeh)

Iran And India: A Tangled Web Of Oil And Geopolitics

India and Iran have had a long relationship stretching back to ancient times. Iranian (or Persian) influence has produced a deep imprint upon Indian art, poetry, architecture and literature. With periodic invasions, military adventures and constant cross-migrations between the two empires, the people of Iran and northern India share many cultural and ethnic characteristics.

In the 21^st century, the relations between these two great nations must be framed along the lines of geo-politics and oil, rather than art and culture.

Although India was greatly worried by the 1979 revolution in Iran that toppled the Shah and established an Islamic state, New Delhi and Teheran have generally enjoyed good relations. That tie became stronger with India’s insatiable appetite for energy in tandem with western sanctions that have pressured Iran to find customers for its crucial oil exports.

Indeed, India -which criticized the sanctions by the U.S., United Nations and European Union – recently became Iran’s top oil buyer.

Full article: Iran And India: A Tangled Web Of Oil And Geopolitics (International Business Times)

Iran Oil Exports Continue Off Radar

Iran continues to show that there is no bottom for third world economies.

Iran is trying to counter Western sanctions on its oil industry that aim to cripple Iran’s economy and convince it to acquiesce to Western demands regarding its nuclear program.

Reuters cites sources in the oil industry, trading and shipping who say the National Iranian Tanker Company has ordered all its captains to “switch off the black box transponders that are used in the shipping industry to monitor vessel movements.”

Full article: Iran Oil Exports Continue Off Radar (Eurasia Review)

Ahmadinejad: Iran Can Go Years with No Oil Sales

Iran can survive for years without selling oil, Iranian President Mahmoud Ahmadinejad claimed Tuesday, according to Fars news. “Even if we didn’t sell oil for two to three years, the country would manage easily,” he said.

The European Union is planning to ban Iranian oil in an attempt to pressure Ahmadinejad to drop the country’s nuclear program.

Full article: Ahmadinejad: Iran Can Go Years with No Oil Sales (Arutz Sheva)