China’s New Gold-Backed Oil Benchmark to Deal Blow to U.S. Dollar

ISTOCK.COM/SELENSERGEN

 

New financial instrument gives oil-exporting nations their long-sought alternative to the petrodollar.

China will soon introduce a crude oil futures contract denominated in yuan and convertible into gold, the Nikkei Asian Review reported on September 1. Analysts say that since China is the world’s largest oil importer, the move could deal a major blow to the global influence of the United States dollar.

The contract would allow oil exporting nations such as Russia, Iran and Venezuela to conduct sales in yuan, instead of in U.S. dollars, and to then change the yuan into gold on both the Hong Kong and Shanghai exchanges. This would also allow these countries that often fall afoul of American foreign policy to circumvent dollar-based U.S. sanctions.

The Chinese government has been developing the gold-backed futures contract for years, and Oilprice.com reports that it is expected to launch this year. It will be China’s first commodities futures contract available to foreign entities, and analysts expect many oil-exporting nations and firms to find it appealing. Continue reading

The Saudi Power Balance Is On A Knife-Edge

 

The sweltering heat of Saudi Arabian summer will feel like a cool breeze compared to the geopolitical fire that could soon take over the country if ongoing internal power struggles destabilize the Kingdom’s Royal Family and national security in the coming weeks.

After his successful elevation to Crown Prince, Mohammed Bin Salman (MBS) has been appointed by King Salman to be in charge during his holiday to Morocco. The King’s holiday comes at a time of relative instability in the Kingdom, as the effects of the removal of former Crown Prince Mohammed Bin Nayef at the end of the Ramadan period continue to linger. Continue reading

Qatar Saudi Terror Row Deepens as Turkey Commits Troops

Turkish President Tayyip Erdogan poses with commandos following a fast-breaking iftar dinner at the 1. Commando Brigade in Kayseri, Turkey, June 8, 2017. Kayhan Ozer/Presidential Palace/Handout via REUTERS

 

On Friday the diplomatic split between Qatar and an Arab coalition led by Saudi Arabia deepened as 18 Qataris were placed on a terrorism blacklist and Turkey committed troops, warships and planes to defend their ally.

(DUBAI/DOHA) The developments intensified a confrontation between tiny-but-wealthy Qatar and a group of Arab nations led by Saudi Arabia and Egypt that accuse it of fomenting instability. The dispute has created a major diplomatic test for the United States, which is close allies of the countries on both sides.

In an apparent escalation of the crisis, staff at Al Jazeera, Qatar’s influential satellite television news channel which often infuriates the rulers of the Arab world, said on Thursday its computer systems were under cyber attack. Continue reading

The Years of Terror (II)

BERLIN (Own report) – Following the recent terror attacks, international pressure has been mounting on a major supporter of global jihadism – Saudi Arabia, a close German ally. In London, leading politicians from the opposition are calling on the British government to finally publish an investigation of the – presumably Saudi – financiers of British jihadis. Protest against the western powers’ pact with the Saudi ruling clan is being raised also beyond Europe’s borders. The youth league of the world’s largest Islamic organization, the Indonesian Nahdlatul Ulama, for example, has published a declaration accusing the West of ignoring the direct correlation between the Saudi Salafist crusade “and the spread of terrorism worldwide.” For decades, Saudi Arabia has been promoting Salafi jihadi milieux throughout the world – partly in alliance with Germany, partly with Berlin’s de facto approval – significantly strengthening them in Afghanistan, Pakistan, the Sahel, North Africa, the Middle East and the European countries with Muslim populations, such as Kosovo, as well as in Southeast Asia – in Indonesia and in the Philippines. While milieux supported by Saudi Arabia have increased their terror also in Western Europe, Berlin is continuing its cooperation with Riyadh.

Continue reading

The Years of Terror (I)

LONDON/BERLIN/RIYADH (Own report) – With its continued worldwide support for Salafis, Germany’s close partner, Saudi Arabia, is relentlessly fertilizing the soil for the growth of jihadi terror, according to the German Institute for International and Security Affairs (SWP). “The consequences of Saudi Arabia’s support for Salafism are catastrophic,” the SWP concludes in light of IS/Daesh activities in Europe. British experts are also sharply criticizing cooperation with Riyadh. If one seriously wants to combat jihadi terror, one “should start by stopping the mass export of Wahhabism’s intolerance and hatred from Saudi Arabia,” an insider recommends. This is, however, countered by Germany, other European powers and North America’s relentless cooperation with the Saudi ruling clan. Just a few weeks ago, Chancellor Angela Merkel launched regular military cooperation with the Saudi armed forces. Out of consideration for Riyadh, the British government has been withholding an investigation, showing the – presumably Saudi – financiers of British jihadis. This had been made known only three days before the latest terror attack in London.

Continue reading

US-Saudi arms mega deal looks to counter Iran

 

Washington has announced a bumper arms deal with Saudi Arabia, heralding the package as a major boost to long-standing security ties and a way to further isolate Iran.

Administration officials claim the agreement — worth $110 billion over the next decade — is the biggest single arms deal in American history, and it will see US defense firms flow everything from ships and tanks to the latest anti-missile systems to the kingdom.

The deal also reportedly includes the renewed sale of precision-guided munitions that had been blocked under president Barack Obama’s administration, for fear the Saudis would use them on civilian targets in Yemen, where Riyadh is prosecuting a war against Iranian-backed Huthi rebels. Continue reading

Trump to unveil plans for an ‘Arab NATO’ in Saudi Arabia

Interestingly enough, in a previous post from 2015, Saudi Arabia was already working on building an ‘Islamic NATO’ to fight what it deemed ‘terrorism’. At the time, it could’ve been an actual Arab NATO forming under the guise of terrorist fighting, but the main aim was and always has been Iran. Maybe it still exists to this day and Trump is adding more strength to it.

Furthermore, and more interesting was America’s goals stated in public by now-retired General Wesley Clark to overthrow seven Middle East nations in five years to keep the next world superpower from rising. The goal never changed but the timeline did. Now fast forward to 2017 and almost six out of 10 are taken care of — the sixth being Syria which is almost as good as defeated and about to be split up between three or four major powers. If an Arab NATO is formed, it will obviously be with the blessing of Washington and likely used as a proxy to take out the seventh Middle East nation, Iran.

All in all, this is going to be a very interesting development to follow up on.

For more on the ‘Islamic NATO’, see the following previous post:

Is Saudi Arabia building an ‘Islamic NATO?’

 

President Trump meets with Saudi Defense Minister and Deputy Crown Prince Mohammed bin Salman in the Oval Office on March 14. (Jabin Botsford/The Washington Post)

 

When President Trump arrives in Riyadh this week, he will lay out his vision for a new regional security architecture White House officials call an “Arab NATO,” to guide the fight against terrorism and push back against Iran. As a cornerstone of the plan, Trump will also announce one of the largest arms-sales deals in history.

Behind the scenes, the Trump administration and Saudi Arabia have been conducting extensive negotiations, led by White House senior adviser Jared Kushner and Saudi Deputy Crown Prince Mohammed bin Salman. The discussions began shortly after the presidential election, when Mohammed, known in Washington as “MBS,” sent a delegation to meet with Kushner and other Trump officials at Trump Tower. Continue reading

Iran threatens Saudi Arabia

Hossein Dehqan (Reuters)

 

Iran’s defense minister threatens to leave no part of Saudi Arabia untouched if Riyadh “does anything ignorant”.

Iran’s defense minister threatened Saudi Arabia on Sunday, days after a Saudi prince ruled out dialogue with Tehran and said he would protect his kingdom from what he called Iranian efforts to dominate the Muslim world.

“If the Saudis do anything ignorant, we will leave no area untouched except Mecca and Medina,” Dehqan said, according to the report, in comments made to Hezbollah’s Al-Manar TV. Continue reading

Iran Steps Up Support for Houthis in Yemen’s War

Newly recruited Houthi fighters in Sanaa, Yemen, Jan. 3, 2017 / REUTERS

 

LONDON/ANKARA/DUBAI (Reuters) – Iran is sending advanced weapons and military advisers to Yemen‘s rebel Houthi movement, stepping up support for its Shi’ite ally in a civil war whose outcome could sway the balance of power in the Middle East, regional and Western sources say.

Iran’s enemy Saudi Arabia is leading a Sunni Arab coalition fighting the Houthis in the impoverished state on the tip of the Arabian peninsula–part of the same regional power struggle that is fueling the war in Syria.

Sources with knowledge of the military movements, who declined to be identified, say that in recent months Iran has taken a greater role in the two-year-old conflict by stepping up arms supplies and other support. This mirrors the strategy it has used to support its Lebanese ally Hezbollah in Syria. Continue reading

Saudis’ upcoming trip to China sends strong signal to US

© Getty Images

 

King Salman Bin Abdul-Aziz of Saudi Arabia is leading an entourage, including 25 senior princes and 10 ministers, to China later this month, part of a month-long tour of the Asia-Pacific, as the kingdom is seeking to hedge against an unpredictable and divided White House.

While it yearns for a renewed American role in the Middle East and reassurances from President Trump that Riyadh remains an ally, Saudi Arabia now faces a period of uncertainty due to the unpredictability of Trump’s foreign policy stance. That reason alone could explain why a trip to Beijing was planned before a trip to Washington.

Despite its efforts at economic diversification, Saudi Arabia will remain dependent on oil exports for a long time, and China provides the kingdom with a stable market for its energy exports for decades to come. Continue reading

Reports: Houthi missile hits military base near Saudi capital

An emboldened and belligerent Iran, that got everything it wanted out of the Obama administration, is clearly preparing for and provoking war:

 

Scud missile variants are being used by the Iran-backed Houthis.

 

A surface-to-surface missile launched by Iran-backed Houthi rebels hit a Saudi military camp near Riyadh on Feb. 5, according to regional news reports.

The Saudi Ministry of Defense has not commented on the incident, but a number of local citizens reported on Twitter that the missile hit a military camp in the town of al-Muzahimiyah, 40 kilometers west of Riyadh. Continue reading

The Coming Fracture Of Saudi Arabia

 

The Bible’s book of Galatians, VI teaches, «as you sow, so shall you reap». And for Saudi Arabia, which has overtly and covertly supported rebellions in Libya, Syria, Iraq, Yemen, Ethiopia, Philippines, and Lebanon that have led to civil wars and inter-religious strife, the day of reckoning may soon be at hand. The present Saudi king, Salman bin Abdul Aziz, is the last of the sons of the first Saudi king, Abdul Aziz al Saud, who will ever sit on the Saudi throne. After Salman dies, Saudi leadership will pass to a new generation of Saudi royals. But not all the descendants of the first Saudi king are happy about how the future succession may turn out. Continue reading

With OPEC deal to cut output, Saudi signals surrender to U.S. shale

Saudi Arabia’s strategy to drive U.S. shale out of the energy market has failed.

“The new OPEC deal to cut oil output – the cartel’s first since 2008 – amounts to nothing less than Saudi Arabia’s surrender to the power of American shale,” John Hulsman wrote for UK business daily City AM on Dec. 5.

OPEC as a whole agreed to cut production by 1.2 million barrels per day (bpd), with Saudi agreeing to cut 500,000 bpd. With the cut, OPEC now accounts for less than half of all energy output in the world. Continue reading

Iran tells Saudi navy vessels to avoid its waters

DUBAI (Reuters) – Iran’s powerful Revolutionary Guards (IRGC) warned Saudi naval vessels taking part in military exercises in the Gulf on Wednesday not to get close to Iranian waters, in a sign of heightened tensions between the two regional rivals.

Saudi Arabia began naval war games including live fire exercises on Tuesday in the Gulf and Strait of Hormuz, the world’s most important oil route. Continue reading

Desperate Saudi Arabia Offers To Cut Production By 500,000 Barrels

Bringing Iran into the fray out of panic will also give the Persian nation the recognition it wants in the oil and gas industry, allowing for it to extend its grip on the Middle East on its economic front. Furthermore, having an increased say within the OPEC cartel will give it more global clout and give it a tool to wage economic warfare.

 

Saudi Arabia’s oil policy, unveiled just under two years ago at the November 2014 OPEC meeting where it effectively splintered the OPEC cartel by announcing it would produce excess quantities of oil in hope of putting shale and other high-cost producers out of business, has backfired spectacularly. OPEC has failed to crush the U.S. shale industry, which as a result of increasing efficiencies and debt-for-equity exchanges has seen its all in production costs tumble. This has made far cheaper oil prices profitable (especially with the addition of hedges), not to mention Wall Street’s ravenous desire to buy any debt paper that offers even a modest yield, allowing U.S. oil producers to delay or outright avoid bankruptcy. Continue reading