By securing Assad and its alliance, Iran gains upper hand for nuclear talks

Bashar Assad’s victory over the 12-month uprising to unseat him is unquestioned. With massive Iranian and Russian intelligence and military support, the Syrian army was able to push the rebels out of the cities – barring isolated pockets in Homs and Idlib – and drive them to the rural periphery, where they can’t hold up for long.

One observer, describing their situation as “undergunned and overwhelmed,” reported that Syria’s rebels have to negotiate for hours for every box of bullets they haul across the border for their war against Assad. “And their frustration is starting to show.”

Tehran, Damascus and Hizballah are crowing over their success in derailing the Obama administration’s two-pronged policy for halting a nuclear Iran. It hinged on Tehran’s isolation by unraveling its alliance with Damascus and Hizballah and economic pressure through tough financial sanctions and an oil embargo.

Iran has come out of the woods firmly in position at the head of its bloc, now cemented by Assad’s defeat of his foes. Tehran’s hand is much strengthened for the coming nuclear talks between Iran and the Six Powers due to start in two weeks. Washington will have to pay for any Iranian concessions by starting the process of unwinding sanctions.

Full article: By securing Assad and its alliance, Iran gains upper hand for nuclear talks (DEBKAfile)

Obama’s back-channel to Tehran bypasses allies Erdogan and Netanyahu

US President Barack Obama this week gave his two allies, the Turkish Prime Minister Tayyip Erdogan and Israel’s Binyamin Netanyahu, a lesson in the politics of expediency, when Tuesday, March 20, Secretary of State Hillary Clinton announced exemptions for 11 nations from new US financial sanctions against countries that don’t reduce the Iranian oil purchases by June 28.

Above all, Ankara is deeply engrossed in an effort to have the new Iranian and Iraqi pipelines to Europe routed through Turkey, reducing the Strait of Hormuz’s crucial importance as a primary route for the world’s oil supplies. This pipeline would also hurt Saudi Arabia and the other Gulf oil producers, all of whom are dead set against Erdogan’s hegemonic aspirations in the Middle East.

Full article: Obama’s back-channel to Tehran bypasses allies Erdogan and Netanyahu (DEBKAfile)

Obama Holds Saudis Back from Striking Iran – and Syria Too

It should be no secret that the Saudis are both fed up with the Obama administration and seek an end to the Iranian regime. They have even threatened to go nuclear should Iran be allowed to continue its nuclear program.

Hardly a day goes by without the Obama administration pointing out in some US media outlet the futility, wrongheadedness, hazards, superfluity etc. of Israel military action for pre-empting a nuclear Iran. The public has been informed, for instance, that it would only set Iran’s program back by a year, and that the ayatollahs have put their nuclear bomb program on hold. So what’s the hurry?

But about the equally strenuous White House effort to hold Saudi Arabia back from attacking Syria as well as Iran – hardly a word sees the light of day.

The fuss and pother about Israel’s intentions distract attention from the very real fears in Washington about the Saudi royal family’s plans for military action against Iran and its allies, Syria and Hizballah, and Riyadh’s efforts to draw the heads of the Gulf oil emirates into the action.

Riyadh puts no trust in the sanctions and embargo Washington and its Western allies have put in place to curb Iran’s nuclear aspirations. Instead, they see sanctions becoming a boon for Tehran

Tuesday, March 20, oil fell by only 1 percent after the Saudis announced their most detailed steps yet to make good on any shortfalls generated by the embargo on Iranian oil and the cutoff from March 17 of Iran’s banks from transactions through the Belgian-based Society for Worldwide Interbank Financial Telecommunications (SWIFT), which facilitates most of the world’s bank transfers.

Money in Iran’s pocket from sanctions-boosting oil prices

Saudi Arabian Oil Minister Ali al-Naimi announced the kingdom was pumping 9.9 million barrels per day – the highest level in decades – and was willing to turn the taps up to a maximum capacity of 12.5 million bpd to meet its customers’ every request.

Iraq, too, added 30,000 barrels per day to its production of 2.1 million bpd.

But these steps failed to reverse the upward price trend.

And the sanctions’ deleterious impact on Tehran was offset by profits from skyrocketing oil prices: Not only were the extra costs of circuitous trade routes covered, but the declining value of the Iranian rial flattened.

“We are ready and willing to put more oil on the market, but you need a buyer,” Al-Naimi said bitterly, aware that no matter how much more oil Saudi Arabia may pump, Tehran is still ahead of the sanctions game. Only if China, Japan and India can be persuaded to line up behind the Obama administration and make genuine cutbacks in their oil purchases from Iran, would the topped-up Saudi oil production come into play.

DEBKA-Net-Weekly’s sources in the Gulf report that the Saudis suspect the Obama administration of publicly talking up the latest round of sanctions (Barack Obama: “We’ve applied the toughest sanctions ever on Iran”), while assuring Tehran in quiet talks (See the item in this issue about secret US-Iranian talks), that, so long as they keep the dialogue going, sanctions will put Iran in the black.

US stalls British-Saudi arms sales

This week, US acted to stymie Saudi operations in two key arenas:

1. Iran was the first: They suspect the White House of ordering US International Traffic in Arms (ITAR) to stall the sale of British precision-guided Paveway IV bombs developed by Raytheon UK, a weapon that would enable Saudi Arabia to attack key Iranian Persian Gulf sites, such as its naval bases on the Sirri, Abu Musa, Greater Tunb and Lesser Tunb islands around the strategic Strait of Hormuz, and strategic locations on Iran’s Persian Gulf coast.

The Saudis believe the US administration is deliberately keeping those assault weapons out of their hands to frustrate a potential attack on Iran.

They had pinned their hopes on British Prime Minister David Cameron interceding on their behalf with President Barack Obama during his visit to Washington in mid-March and getting the weapons released to Riyadh.

But the bonhomie and shared jokes aside, Cameron made no headway in budging the US president from his opposition to the sale, although British interests are also at stake. The sale to Saudi Arabia of 72 Eurofighter Typhoons delivered by BAE Systems (the combination of British Aerospace and Marconi Electronic Systems), is still up in the air because without the precision-guided bombs, those bomber jets are not much use to the Saudis.

Washington stops Jordan allowing Saudi troops transit to Syria

2. The Obama administration is firing every stratagem in its quiver to hold Saudi Arabia back from military intervention in the Syria crisis.

DEBKA-Net-Weekly’s sources in the Persian Gulf disclose exclusively that, two weeks ago, SaudiKing Abdullah secretly asked Jordan’sKing Abdullah for permission to send Saudi military forces into Syria by way of the Hashemite Kingdom.

Senior Saudi princes, including Saudi Defense Minister Prince Salman bin Abdulaziz, had already been in touch with their Jordanian counterparts to discuss detailed plans which designated the routes Saudi forces would take, the Jordanian bases they would use and the Saudi Air Force’s tactics for covering the advancing Saudi troops and shielding the Kingdom of Jordan against potential Syrian air force action.

The Saudis plan to send troops in to the Syrian Druze Mountains and Horan regions for setting up safe havens to protect the beleaguered civilian population from Syrian military and security forces.

On March 15, Prince Salman attended a military parade on the grounds of the Eighth King Fahd Brigade in Tabuk in northern Saudia near the Jordanian border.

It was attended by a high-powered lineup: Chief of Staff Gen. Hussein Al-Qubail, Gen. Abdul Rahman Al-Binyan, Director General of the Prime Minister’s office, Gen. Prince Khaled bin Bandar, commander of Land Forces, and Maj. Gen. Eid Al-Shalawi, Commander of the Northern Region.

The parade of military prowess and resolve was mean to impress on Jordan that the Saudis were serious about getting a force into Syria through its territory.

The two Abdullahs in deep discord

This Saudi plan was soon nipped in the bud.

Riyadh was informed that US officials had warned the Jordanian monarch against acceding to the Saudi request. Stuck in an impasse, the Hashemite king stopped answering insistent Saudi calls for clarifications.

Seeing their plans for intervention in Syria in ruins, the Saudis decided to get their own back.

In an unprecedented move against a fellow Arab ruler, they arranged for an Arab diplomat, who remained anonymous, to inform the Omani Gulf News agency that Saudi arms were being pumped to the anti-Assad Syrian rebels and the first shipment was on its way to destination through Jordan.

By spilling the beans about Jordan’s clandestine role in this traffic, Riyadh exposed the kingdom to Syrian punitive action.
This maneuver brought the Jordanian king hurrying over to Riyadh for a secret visit.

Our sources report that when he tried explaining to the Saudi king that if Assad was toppled his successors would be worse, he was brusquely brushed aside. Saudi King Abdullah, who is twice the age of the Hashemite royal, reproved him sharply and told him it was time to make up his mind on which side he was in the Middle East.

The two kings Abdullah parted in deep discord.

Saudis are gunning for the US and Turkey

As for Syria, Bashar Assad will have understood by now that Riyadh is rolling up its sleeves for military action against him as soon as a way can be found. Four complications are unfolding:

First: The disclosure that weapon shipments to anti-Assad rebels were passing through Jordan has revived the Saudi pledge of a military and air shield for the Hashemite Kingdom against Syrian aggression. This may lead to military and aerial clashes between Syria and Saudi Arabia on Jordanian soil very near the sensitive junction of Jordanian, Lebanese and Israeli borders.
With this eventuality in mind, Riyadh is reported by DEBKA-Net-Weekly’s military sources to have selected the Druze Mountains and Horan region as potential safe havens for persecuted Syrians.

Second: Saudi-US relations are in sharp decline: Riyadh’s Syrian initiative is an act of protest against Washington’s decision to refrain from military intervention to stop Assad’s brutal suppression of the revolt in Syria – even after at least 8,000 Syrian civilian deaths.

The encounter three weeks ago in Tunis between US Secretary of State Hillary Clinton and Saudi Foreign Minister Saud al-Faisal, ended with Faisal angrily stalking out with words to the effect of: if you don’t take action against Bashar Assad, we will.

The Saudis fully intend now to make good on that threat.

Third: The Saudis are gunning for Turkey. They intend to show up Ankara’s toothlessness in the fight against Assad in contrast to its leaders’ high rhetoric about their prowess as a Middle East Muslim superpower.

Most of all, they can’t abide Prime Minister Tayyip Erdogan’s pretensions as go-between for the back-channel dialogue the Obama administration is conducting with Iran’s Supreme Leader Ayatollah Ali Khamenei. (See a separate item in this issue.)
Fourth: Riyadh finds it essential to counteract Iran’s airlift of arms and equipment into Syria through Iraqi airspace. The Saudis refuse to stand by idly while Iran enhances its position in Syria and Iraq.

Full article: Obama Holds Saudis Back from Striking Iran – and Syria Too  (DEBKAfile)

SWIFT Cuts Services To Iranian Financial Institutions

SWIFT, the Brussels based transaction provider, announced it has been instructed to cut services to Iranian financial institutions that are subject to European sanctions, in order to comply with the EU Council directive.

­The Society for Worldwide Interbank Financial Telecommunication, or SWIFT, is crucial to Iran’s oil and other trade.

Full article: SWIFT Cuts Services To Iranian Financial Institutions (Eurasia Review)

Exclusive: U.S., Britain to agree emergency oil stocks release

A formal request from the United States to the UK to join forces in a release of oil from government-controlled reserves is expected “shortly” following a meeting on Wednesday in Washington between President Barack Obama and Prime Minister David Cameron, who discussed the issue, one source said.

Full article: Exclusive: U.S., Britain to agree emergency oil stocks release (Reuters)

The Story Nobody Wants to Hear

There are many who can cite numerous reasons why another severe downturn is in store for our future: with a possible military strike against Iran, another financial crisis (this time a sovereign one), rising oil and gasoline prices, massive tax hikes hitting the U.S. economy in 2013, a run-a-way global printing press, to another weather related event or an act of God. Of the potential risks just mentioned the ones that concern us most are rising energy prices and the massive tax hikes due to take effect next year.

Full article: The Story Nobody Wants to Hear (Financial Sense Online)

The Battle for Canada’s Oil Sands

One hundred and seventy billion: That is the number of economically recoverable barrels of oil the Canadian oil sands are estimated to hold. It is a big prize. At $100 per barrel, it is a $17.3 trillion prize, enough to pay the official U.S. federal debt with trillions to spare. In a world of global population growth and “peak oil” constraints, it is an economy-changing, potentially country-changing prize that could skyrocket in value even higher in the years ahead.

But who will benefit from this supposed money-gushing cornucopia?

The Canadian oil sands are so expansive that America’s northern neighbors are practically begging for investors to develop them. “Our oil sands are the largest energy project in the entire world,” said Canadian Natural Resource Minister Joe Oliver on a recent trip to China. “We simply don’t have enough capital in Canada.”

It was a shocking statement—not because of what he said, but because of where he said it. Traditionally, Canada has looked to the United States for oil infrastructure development. But those days may be ending. When President Obama refused to permit the proposed Keystone pipeline that would have brought oil from Alberta to Texas refineries, he may have unwittingly changed the special relationship.

For now, Canada’s oil is landlocked, with no way to market. Existing pipelines to America are filled to capacity. But hundreds of thousands of extra barrels of oil per day are set to come onto the market over the next half decade as the oil sands operations are built. Trillions of dollars’ of oil will flow somewhere; that much you can be sure of. If America doesn’t want it for political reasons, the oil companies will find another customer.

China is already pointing the way. In January, Reuters reported that Canada’s oil industry is experiencing an “Asian invasion.” Most recently, Chinese government-owned Petro China purchased the Athabasca Oil Sands MacKay River project. It also owns an option agreement to purchase Athabasca’s Dover project. Last July, cnooc, another Chinese state-owned company, paid more than a billion dollars for Opti Canada’s 35 percent stake in its Long Lake project. That project will extract over 70,000 barrels of oil per day when up and running. In 2010, Chinese state-owned Sinopec spent $4.65 billion for a chunk of Syncrude Canada Ltd—one of the world’s largest oil sands mining operations. Sinopec also owns 50 percent of Canada’s Northern Lights project. Not long before, China Investment Corp., a giant state-owned sovereign wealth fund, offered $1.25 billion to help Penn West Energy develop oil sands leases. Canada’s Husky Energy has been owned by interests in Hong Kong for decades.

Full article: The Battle for Canada’s Oil Sands (The Trumpet)

Commentary: Geopolitical maelstrom

Iran can close the Strait of Hormuz, not just for a few hours, as the Israelis say, but long enough to drive oil prices into the stratosphere. An admiral with years of experience in the region at different times of his career said privately Iran can sow thousands of mines in an area that handles one-fifth of the world’s daily oil requirements. They are below the surface and can be detonated by remote control as a warship sails over them. Iran’s shore line, which covers the entire eastern side of the Persian Gulf, is pock-marked with concealed missile sites.

The Iranians would also use hundreds of small boats in a swarming configuration that U.S. warships are prepared to cope with — but one or two are bound to get through a curtain of fire and punch a hole in the hull of a U.S. or NATO minesweeper.

Such a small boat in Aden harbor in October 2000 punctured the hull of the USS Cole, a $1 billion Arleigh Burke class destroyer, killing 17 sailors, and putting the warship out of service for 18 months with a $220 million repair bill. Cost of the operation to al-Qaida: $10,000 plus three volunteer suicide bombers.

The response of Israeli naysayers is that such tactics would hurt Iran far more than any of its intended targets. U.S. generals and admirals respond that the Iranian leadership wouldn’t be averse to cutting off its nose to spite its face.

The Iranians can also absorb temporary belt-tightening far more readily than Western Europeans. And with gas at the pump suddenly selling at $10 to $15 a gallon, U.S. President Barack Obama’s updated resume wouldn’t look too appealing at the ballot box in November.

The arguments about whether Iran really wants a nuclear capability seem disconnected from reality. Pakistan’s nuclear black marketer A.Q. Khan sold the ayatollahs nuclear secrets two decades ago. By all accounts, Tehran is very close to achieving deliverable nuclear payloads.

U.S. Navy 5th Fleet headquarters in Bahrain is vulnerable; two-thirds of its population is Shiite Muslim and rooting for Tehran in the current conflict.

Full article: Commentary: Geopolitical maelstrom (Space War)

UK warns Argentina regarding the Falklands

Prime Minister David Cameron’s spokesman Steve Field said it was “very sad that Argentina continues with their approach of confrontation, not cooperation.”

Argentina has become increasingly assertive over its claims to the islands that it calls the Malvinas, as well as the British-held South Georgia and South Sandwich islands. At stake are not only the islands, but also rich fishing grounds and potential undersea gas and oil reserves in the surrounding seas.

Cameron insists London will not enter negotiations on the sovereignty of the islands. He has said the people of the Falklands must decide their own future and claims Argentina has taken a colonialist approach to the islands’ residents.

Full article: UK warns Argentina regarding the Falklands (AP)

Obama’s giveaway: Oil-rich islands to Russia

The Obama administration, despite the nation’s economic woes, effectively killed the job-producing Keystone Pipeline last month. The Arab Spring is turning the oil production of Libya and other Arab nations over to the Muslim Brotherhood. Iraq is distancing itself from the U.S. And everyone recognizes that Iran, whose crude supplies are critical to the European economy, will do anything it can to frustrate America’s strategic interests. In the face of all of this, Obama insists on cutting back U.S. oil potential with outrageous restrictions.

Part of Obama’s apparent war against U.S. energy independence includes a foreign-aid program that directly threatens my state’s sovereign territory. Obama’s State Department is giving away seven strategic, resource-laden Alaskan islands to the Russians. Yes, to the Putin regime in the Kremlin.

Full article: Obama’s giveaway: Oil-rich islands to Russia (WND)

Iran stops oil sales to British, French companies

“Exporting crude to British and French companies has been stopped … we will sell our oil to new customers,” spokesman Alireza Nikzad was quoted as saying by the ministry of petroleum website.

The European Union in January decided to stop importing crude from Iran from July 1 over its disputed nuclear program, which the West says is aimed at building bombs. Iran denies this.

Iran’s oil minister said on February 4 that the Islamic state would cut its oil exports to “some” European countries.

The European Commission said last week that the bloc would not be short of oil if Iran stopped crude exports, as they have enough in stock to meet their needs for around 120 days.

Full article: Iran stops oil sales to British, French companies (Reuters)

What sanctions? Top five countries buying oil from Iran.

Third-world economies have no bottom, therefore sanctions are unlikely to be as hard hitting as most believe. There will always be another customer for oil.

Iran is the third-largest exporter of crude oil in the world, behind Saudi Arabia and Russia. Its economy relies heavily on oil exports. Recent Western sanctions have targeted Iran’s oil industry in hopes of pressuring Tehran to address international concerns about its nuclear program.

However, the effect of the sanctions could be limited if Iran’s top customers keep buying oil, or even increase their imports. According to tallies from June 2011, here are the top 5 importers of Iranian oil:

1. China

2. India

3. Japan

4. South Korea

5. Turkey

Full article: What sanctions? Top five countries buying oil from Iran. (The Christian Science Monitor)

Falkland Islanders have the right to choose their future

While we in the Islands have grown well accustomed to political rhetoric from Buenos Aires over the years, these latest moves have seen everyday life made that bit harder, with the selection of food on the shelves changing, and becoming more expensive, as we have had to find new suppliers for everyday goods. But, we Falkland Islanders are resourceful people and will not be defeated by political and economic bullying. We remain resolute in our desire to maintain neighbourly relations with all our South American neighbours, including Argentina, for mutual benefit. During the 1990s, significant progress had been made in our relationship with Argentina; agreements had been reached on conservation of fish stocks and on oil exploration but Argentina unilaterally withdrew from these, something we deeply regret.

With the eyes of the world on the South Atlantic in recent weeks, one unified message continues to come from those that live in the Islands; that is our right to self-determination. The people of the Falkland Islands remain a British Overseas Territory by choice. It is our constitutional right and a fundamental freedom enshrined in the UN Charter. This right to self-determination is a value that is protected and promoted by democratic powers the world over; the Falkland Islands are no different. We are happy to talk, but our sovereignty remains non-negotiable.

Full article: Falkland Islanders have the right to choose their future (MercoPress)

Obama’s Falklands Failure

Thirty years ago, on April 2, 1982, Argentina invaded the Falkland. British Prime Minister Margaret Thatcher quickly assembled and dispatched a formidable naval task force to retake the islands, which had been a British possession since 1833. On June 14, Argentine forces surrendered to the Royal Marines. The conflict was brief and violent, with both nations losing ships and hundreds of sailors and soldiers. The war was, however, a decisive victory for the United Kingdom.

As the 30th anniversary of the war approached, in December, Argentinian President Christina Kirchner vowed that her nation would reclaim the Islas Las Malvinas, as the Falklands are called in Argentina. She stated that “[i]n the 21st century [Britain] continues to be a crude colonial power in decline.”  She branded British Prime Minister David Cameron “arrogant” and said his defense in parliament of the right of the people of the Falklands to self-determination was an expression of “mediocrity and stupidity.”

Argentina’s Foreign Minister, Hector Timerman, claims that Cameron’s defense of the Falklands sovereignty “is perhaps the last refuge of a declining power.” Prince William aka Flight Lieutenant Wales, who is currently piloting a Royal Air Force rescue helicopter in the Falklands, has been labeled a “conquistador” by Argentine officials.

While it seems unlikely that Argentina would risk another humiliating defeat by invading the Falklands in the near term, the temptation of appealing to nationalism to mask an economic or political crisis combined with the desire to control what appear to be significant South Atlantic oil reserves means that another Argentine military adventure cannot be ruled out. There are four key takeaways from the current situation with implications that stretch much further than the issue at hand:

First, military weakness is provocative. Argentina ramped up its aggressive rhetoric and diplomatic efforts to reclaim the Falklands only after P.M. Cameron announced massive cuts to the Royal Navy and British ground forces. The decommissioning last December of the U.K.’s sole remaining aircraft carrier, Ark Royal, well before its service life ended, and the sale of Britain’s 50 G-9 Sea Harrier fighter jets to the U.S. Marine Corps, seems to have emboldened the Argentines. In 1982, the Royal Navy had approximately 90 warships from which it could assemble a task force.  Today it has 30. Indeed, most experts believe that while it would be very difficult for the Argentine military to successfully invade the islands, it would be nearly impossible for the U.K. to retake them without an aircraft carrier in the event that Argentina was successful in overrunning Britain’s key air base at Mount Pleasant.

Second, the Obama administration has made the United States an unreliable ally for our closest friends. Britain has been a stalwart ally of the U.S. in both Iraq and Afghanistan, notwithstanding the tremendous domestic political pressure on Labour and Conservative governments not to participate in those unpopular wars. However, in 2010, Secretary of State Hillary Clinton called for talks over the dispute and even appeared to side with Argentina during a press conference with President Kirchner in Buenos Aires.  Last month, as the current situation developed, rather than send a clear message to Argentina that the United States supported its longtime ally, a State Department spokesman demurred: “[t]his is a bilateral issue that needs to be worked out directly between the governments of Argentina and the United Kingdom…We recognize de facto United Kingdom administration of the islands, but take no position regarding sovereignty.”  Nile Gardiner, the Telegraph’s Washington correspondent, wrote in response that the “Obama administration knife[d] Britain in the back again over the Falklands.”

The shabby treatment meted out to America’s “special relationship” partner in this instance cannot be seen as a surprise. It is in line with the administration’s treatment of Israel and Prime Minister Benjamin Netanyahu (at least prior to Bob Turner winning Anthony Weiner’s Congressional seat in New York). Poland and the Czech Republic suffered similar slights after the Administration unilaterally cancelled ABM sites in those countries as part of its naïve and, so far, unsuccessful attempt to “reset” relations with Russia.  And, there has been much criticism of the Administration for failing to provide Taiwan with the latest F-16 fighters that it has long requested to defend itself against a potential attack by China. There is no doubt that American allies such as Israel, Colombia, Georgia, Taiwan, the Gulf States and the Baltics, all of which live in dangerous neighborhoods, are watching the United States’ response to the Falklands row with concern.

Full article: Obama’s Falklands Failure (The Diplomat)

Regime security, not national security, is dominant priority in Beijing and Moscow

If a breakout of the escalating Syrian conflict or an Israel/U.S. military attempt to halt Iran’s progress toward nuclear weapons sets off even a 200-day regional conflict, it would be catastrophic for the Chinese economy.

Han Xiaoping, chief information officer of the China Energy Resources Net, recently warned China’s estimated reserve of only 110 million barrels would last only 46 days if there were a Persian Gulf closure. China’s dependence upon imported crude is far greater than the United States’ with some 40 percent coming from the Gulf. But only a declining 11 percent actually comes from Iran, the rest from the Arab states now unsuccessfully lobbying China to help defuse the Syrian timebomb and halt Iran’s nukes.

Full article: Regime security, not national security, is dominant priority in Beijing and Moscow (World Tribune)