Iran to Russia: Take $14bn and build us a modern army

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Iran’s Defense Minister Gen. Hossein Dehghan arrived in Moscow this week at the head of a large military delegation and laid before President Vladimir Putin and his Defense Minister Gen. Sergei Shoigu a $14 billion check. Now, make our Revolutionary Guards Corps and regular forces into an up-to-the-minute war machine, he said.

The plan to make over and upgrade Iran’s military was first approved by Iran’s supreme leader Ayatollah Ali Khamenei. It is to be paid for with funds released by newly lifted sanctions against the Islamic Republic. The ayatollah aspires to rebuild the two branches – the IRGC with 150,000 troops and the regular army of 420,000 – as the most powerful armed force in the Middle East. Continue reading

China Deal Shows Iran Tilting East, Not West

Iran already has signaled that it plans to do more business with Russia now that the crippling Western sanctions have been lifted from its economy. Iran has also made it clear that it will reach even farther east by moving to a strategic partnership with China, including increasing bilateral trade with Beijing to $600 billion over the next 10 years.

Certainly Iran will resume its business ties with some Western concerns, but Iran’s supreme leader, Ayatollah Ali Khamenei, told visiting Chinese President Xi Jinping in Tehran on Saturday that Iranians don’t trust the West and would prefer to pursue closer relations with “independent and trustworthy countries” such as China. Continue reading

Saudis Planning For A War Of Attrition In Europe With Russia’s Oil Industry

Russia’s central bank recently warned about the growing financial risks to the Russian economy from Saudi Arabia encroaching upon its traditional export market for crude oil. Russia sends 70 percent of its oil to Europe, but Saudi Arabia has been making inroads in the European market amid the oil price downturn.

The result is a heavier discount for Russia’s crude oil, the so-called Urals blend. Bloomberg reported that the Urals typically lands in Rotterdam, a major European destination, at a discount to Brent of around $2 or less. But the discount has widened to $3.50 lately due to increased competition from Saudi Arabia. “Oil supplies to Europe from Saudi Arabia are probably adversely affecting Urals prices,” the Russian central bank warned in a recent report.

Russian officials have accused Saudi Arabia of “dumping” its oil in Europe, a move that Rosneft chief Igor Sechin said would “backfire.” Continue reading

Putin heading to Iran for first time in eight years

Russian President Vladimir Putin will visit Tehran and attend a summit of countries exporting gas, Reuters quoted his aide Yuri Ushakov as saying on Friday.

Putin has not visited Iran since 2007 and while in Tehran is expected to hold talks with the Islamic Republic’s President Hassan Rouhani, Ushakov said. Continue reading

Russian hackers plan new attacks on Western military and civil infrastructure

A spokesman for the Russian Federal Security Service told SCMagazineUK.com that Russian hacker groups Energetic Bear, Dragonfly and some others are considering engaging their activities against selected Western countries. The current financial crisis in Russia, seen locally as having been caused by Western sanctions, has resulted in massive job cuts in the Russian IT industry, which in turn has resulted in an increase in the number of hacker groups in Russia. Continue reading

Saudi Fears Over Emerging Russia-Iran Energy Nexus

Any weakening of Russian support for Mr. Assad could be one of the first signs that the recent tumult in the oil market is having an impact on global statecraft. Saudi officials have said publicly that the price of oil reflects only global supply and demand, and they have insisted that Saudi Arabia will not let geopolitics drive its economic agenda. But they believe that there could be ancillary diplomatic benefits to the country’s current strategy of allowing oil prices to stay low — including a chance to negotiate an exit for Mr. Assad.

That’s a quote from a New York Times article that ran in February of this year.

At the time, we pointed to the piece as evidence that yet another conspiracy “theory” has become conspiracy “fact” as it effectively served to validate (to the extent The New York Times is validation) the thesis that at the end of the day, this is all about energy. Continue reading

Putin undeterred by $32 billion in capital flight, continues assault on dollar’s role

Fearing the collapse of the Russian financial system and burdensome Western sanctions in the aftermath of the Ukraine crisis, investors and businesses moved more than $32.6 billion in assets outside of Russia, primarily to offshore accounts, in the first quarter of 2015, according to reports.

Capital flight has several negative effects on the Russian economy, including the loss of tax revenue and the reduction in funding available for investment.

Lack of investment funding also delays attempts to modernize the economy. The Center for Macroeconomic Analysis and short-term forecasts assesses that investment activity is down 20 percent since 2013. Continue reading

Russia’s new Armata tank makes debut

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Moscow: Russia’s new Armata tank appeared in public for the first time on Monday, rumbling down a broad Moscow avenue on its way to Red Square for the final rehearsal of the Victory Day parade.

Russian and some Western military experts say the Armata will surpass all Western versions. The tank is the first to have an internal armoured capsule housing its three-man crew and a remotely controlled turret with an automatic weapons loading system, features that allow for increasing both the level of crew protection and the efficiency of the tank’s weapons. Continue reading

Sanctioned Russian banks begin testing national payment system next week

“What sanctions?” is how Russia laughs off Western punitive measures while creating its own alternative system. Much like the attack on Russian oil and gas, the West is shooting itself in the foot here as well. Iran and the sanctions against it in the previous 10 years have also been a prime example of plans backfiring. Iran, a third world economy, has no bottom — and plenty of other needy customers such as China who would be more than welcome to take Persian oil.

 

“The pilot project involves SMP Bank and Rossiya Bank, those for which the story is very critical and important. These are quite large banks,” the head of the Russian National payment system (NPS) Vladimir Komlev said in an interview with Rossiya 24 TV.

The move comes as a part of Russia’s ambitious initiative to move away from the Western dominance of its financial markets. Last month the Russian Central Bank said it would have its own international inter-bank payment system, an alternative to the global SWIFT network up and running by May 2015. Continue reading

China reaps harvest from Russia sanctions

China is gaining an edge in energy deals with Russia as Moscow faces sanctions pressure from the conflict in Ukraine.

The latest energy accords announced in Beijing on the sidelines of the Asia Pacific Economic Cooperation (APEC) summit suggest that China is increasing its access to Russian resources while resisting demands for more favorable financial terms.

At a signing ceremony on November 9, Presidents Xi Jinping and Vladimir Putin sealed a memorandum of understanding for a second Siberian gas pipeline on a western route that Russia has promoted unsuccessfully for years.

The preliminary commitment to the project known as the Altai pipeline, named for a remote Russian border region, follows an agreement in May on an eastern Siberian gas line to supply China’s coastal cities and industrial northeast. Continue reading

In Bid to Divide Europe, Russia Expands “Gas War” to Slovakia

Russia appeared to expand its retaliation against Western sanctions on Thursday by cutting in half its natural gas flows to European Union member state Slovakia. Prime Minister Robert Fico told a news conference in Bratislava his country had been caught up in a “political war where gas is being used as a weapon.”

After an emergency government session, Fico said the national gas company SSP had concluded a five year deal with Germany’s E.on to receive up to two million cubic meters of gas per day via Austria to compensate for the drop in Russian supplies.

Fico said SPP had recorded a more than 50 percent decline in flows for the second day in a row after smaller reductions throughout September. Continue reading

Iraq to become Iran’s top gas importer

Iraq will become Iran’s top gas importer by importing 40 million cubic meters (mcm) of gas per day to Baghdad.

The official said at first the two countries had signed a four-year deal, which was extended to 10 years after the Iraqi and Iranian oil ministers reached a new agreement. Continue reading

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 21st 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)

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)