Category Archives: fossil fuels

Iran claims an oil field it seized

Iran claims an oil field it seized

The Iranian government said Saturday that an oil field that its troops occupied a day earlier was on its side of the border with Iraq, despite Iraqi claims to the contrary.

A group of about 11 Iranian soldiers seized a portion of the remote Fakka oil field in Maysan Province in southeastern Iraq early Friday, according to Iraq.

Government officials in Baghdad said they had summoned the Iranian ambassador to protest the military action, but diplomatic efforts had so far failed to resolve the dispute. [continued…]

Iraqi troops in standoff with Iran near oil well

Iraq deployed security forces Saturday near a remote oil well seized by Iran, officials said, and its government pressed Tehran to withdraw its forces from the area along their disputed southern border.

U.S. officials applauded Iraq for standing its ground against Iran — an uneasy ally that analysts said was aiming to remind its neighbor of its economic and political pull in its takeover of the oil well Thursday. The site is located in one of the largest oil fields in Iraq and has about 1.5 billion barrels in reserves.

The standoff was a dramatic display of the occasionally tense relations between the two oil-rich nations that fought an eight-year war in the 1980s but now share common ground in Shiite-led governments. [continued…]

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U.S. companies shut out as Iraq auctions its oil fields

U.S. companies shut out as Iraq auctions its oil fields

Those who claim that the U.S. invaded Iraq in 2003 to get control of the country’s giant oil reserves will be left scratching their heads by the results of last weekend’s auction of Iraqi oil contracts: Not a single U.S. company secured a deal in the auction of contracts that will shape the Iraqi oil industry for the next couple of decades. Two of the most lucrative of the multi-billion-dollar oil contracts went to two countries which bitterly opposed the U.S. invasion — Russia and China — while even Total Oil of France, which led the charge to deny international approval for the war at the U.N. Security Council in 2003, won a bigger stake than the Americans in the most recent auction. “[The distribution of oil contracts] certainly answers the theory that the war was for the benefit of big U.S. oil interests,” says Alex Munton, Middle East oil analyst for the energy consultancy Wood Mackenzie, whose clients include major U.S. companies. “That has not been demonstrated by what has happened this week.”

In one of the biggest auctions held anywhere in the 150-year history of the oil industry, executives from across the world flew into Baghdad on Dec. 11 for a two-day, red-carpet ceremony at the Oil Ministry, broadcast live in Iraq. With U.S. military helicopters hovering overhead to help ward off a possible insurgent attack, Oil Minister Hussein Al-Shahrastani unsealed envelopes from each company, stating how much oil it would produce, and what it was willing to accept in payment from Iraq’s government. Rather than giving foreign oil companies control over Iraqi reserves, as the U.S. had hoped to do with the Oil Law it failed to get the Iraqi parliament to pass, the oil companies were awarded service contracts lasting 20 years for seven of the 10 oil fields on offer — the oil will remain the property of the Iraqi state, and the foreign companies will pump it for a fixed price per barrel. [continued…]

Channeling Sunni rage into Iraqi political clout

Sheik Abdul-Rahman Munshid al-Assi has been making up for the time he lost in an American prison, aggressively diving into Iraqi politics after being held nearly a year on charges of aiding the insurgency.

After his release last year, he formed the Arab Political Council to represent Sunni Arabs in Kirkuk. He recruited Sunni candidates to run in the coming national elections. He is forging a political bloc with Arab nationalists, other tribal leaders and former members of Saddam Hussein’s outlawed Baath Party as a counterweight to Kurds in the province.

At first glance, the fact that a vehement opponent of the Shiite-led government in Baghdad and Kurdish leaders next door is embracing democratic politics may seem to be a purely positive sign. After all, much of the American security effort of the past few years has been to channel Sunnis into just such a course.

But for Sheik Abdul-Rahman the political action is far from a concession. Rather, it is an attempt to tap into the simmering rage he says is still rampant among Sunni Arabs in Iraq. And he and many of his peers are far from becoming fully reformed democrats: he has yet to renounce the insurgency, though he denies directly supporting it, and warns that more violence could come. [continued…]

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Are crippling droughts the next great threat to Iraq?

The dust bowl of Babylon

From his mud brick home on the edge of the Garden of Eden, Awda Khasaf has twice seen his country’s lifeblood seep away. The waters that once spread from his doorstep across a 20% slab of Iraq known as the Marshlands first disappeared in 1991, when Saddam Hussein diverted them east to punish the rebellious Marsh Arabs. The wetlands have been crucial to Iraq since the earliest days of civilization — sustaining the lives of up to half a million people who live in and around the area, while providing water for almost two million more.

The waters vanished after the First Gulf War due to a dictator’s wrath; over the next 16 years, they ebbed and flowed, but slowly started to return to their pre-Saddam levels. By 2007, with no more sabotage and average rains, almost 70% of the lost water had been recovered. Now it’s gone again. This time because of a crisis far more endemic: a devastating drought and the water policies of neighboring Turkey, Iran, and Syria. These three nations have effectively stopped most of the headwaters of the three rivers — the Tigris, Euphrates, and Karoon — that feed these marshes.

“Once in a generation was bad enough,” says Awda, a tribal head and local sheikh in the al-Akeryah Marshlands, who also advises the Nasiriyah governorate on water issues. “Twice could well be God’s vengeance.”

In a land where fundamental interpretations of monotheistic scripts often determine the tone of public discourse, particular attention is now being paid to the biblical Book of Revelation, in which the Euphrates River drying up was prophesized as a harbinger for the end of the world. It is not doomsday yet in Iraq, but the water shortage here has not been worse for at least the last two centuries — and possibly for several millennia more. Government estimates suggest close to two million Iraqis face severe drinking water shortages and extremely limited hydropower-generated electricity in a part of the country where most households get by on no more than eight hours of supplied power per day, in the best of times. [continued…]

U.S. firms lag in bids for Iraqi oil

Chinese, Russian and European companies won the right this weekend to develop major oil fields in Iraq, while U.S. firms made a paltry showing at auctions that represent the first major incursion of foreign oil companies into Iraq in four decades.

The companies that secured 10 contracts in auctions held over the weekend and in June stand to profit handsomely, but they are taking a significant gamble.

Iraq has the third-largest proven crude reserves in the world, but the country remains perilous; it suffers from chronic corruption and acrimonious politics that have prevented the passing of new laws to regulate the sector.

Of the seven U.S. companies that registered for the auctions, only one emerged as the leading partner in a consortium that won a contract. Another U.S. company has a minority stake in a contract. [continued…]

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Three key lessons from Obama’s China tour

Three key lessons from Obama’s China tour

Russia may be engaged in a geopolitical chess game with the U.S. aimed at recovering from the demise of its great power status, but China is different. It pushes back against U.S. initiatives only when those are deemed inimical to its national interests. Iran is a good example. Beijing’s heavy investment in and reliance on Iran’s energy sector make it extremely averse to serious sanctions or strategies that create political turmoil in Tehran. While insisting on compliance with the non-proliferation regime, Beijing does not believe Iran represents an imminent nuclear weapons threat. And its response to North Korea going nuclear suggests that a nuclear armed Iran is something it could live with.

Obama went to China arguing that its emergence as a major power gives it greater responsibility, as a partner to the U.S., in helping run the world and tackle such global challenges as climate change and Iran. Indeed, there was a collective shudder in Europe’s corridors of power at the idea of global leadership being concentrated in a “G2” partnership between Washington and Beijing. They needn’t have worried. China’s response to Obama could be read as: “Running the world is your gig, we’re focused on running our own country, and ensuring security in our immediate neighborhood. We want harmonious relations with you, but don’t expect us to do anything that we deem harmful to our national interests.” That means no serious sanctions against Iran, regardless of what deals are struck between Washington and Moscow, because China’s national interests require growing Iran’s energy exports. [continued…]

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U.S. adviser to Kurds stands to reap oil profits

U.S. adviser to Kurds stands to reap oil profits

Peter W. Galbraith, an influential former American ambassador, is a powerful voice on Iraq who helped shape the views of policy makers like Joseph R. Biden Jr. and John Kerry. In the summer of 2005, he was also an adviser to the Kurdish regional government as Iraq wrote its Constitution — tough and sensitive talks not least because of issues like how Iraq would divide its vast oil wealth.

Now Mr. Galbraith, 58, son of the renowned economist John Kenneth Galbraith, stands to earn perhaps a hundred million or more dollars as a result of his closeness to the Kurds, his relations with a Norwegian oil company and constitutional provisions he helped the Kurds extract.

In the constitutional negotiations, he helped the Kurds ram through provisions that gave their region — rather than the central Baghdad government — sole authority over many of their internal affairs, including clauses that he maintains will give the Kurds virtually complete control over all new oil finds on their territory.

Mr. Galbraith, widely viewed in Washington as a smart and bold foreign policy expert, has always described himself as an unpaid adviser to the Kurds, although he has spoken in general terms about having business interests in Kurdistan, as the north of Iraq is known.

So it came as a shock to many last month when a group of Norwegian investigative journalists at the newspaper Dagens Naeringsliv began publishing documents linking Mr. Galbraith to a specific Norwegian oil company with major contracts in Iraq.

Interviews by The New York Times with more than a dozen current and former government and business officials in Norway, France, Iraq, the United States and elsewhere, along with legal records and other documents, reveal in considerable detail that he received rights to an enormous stake in at least one of Kurdistan’s oil fields in the spring of 2004. [continued…]

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Key oil figures were distorted by US pressure, says whistleblower

Key oil figures were distorted by US pressure, says whistleblower

The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.

The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.

The allegations raise serious questions about the accuracy of the organisation’s latest World Energy Outlook on oil demand and supply to be published tomorrow – which is used by the British and many other governments to help guide their wider energy and climate change policies. [continued…]

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Turkey plans to dump dollar in trade with Iran

Turkey plans to dump dollar in trade with Iran

Turkey is seeking to switch to payments in national currencies for $10 billion worth of trade with neighbouring Iran to lessen exchange rate risks and bolster trade volumes, a Turkish government source said on Friday.

Turkey has made similar proposals to China and Russia in recent months.

Iran proposed earlier this week during a visit by Turkish Prime Minister Tayyip Erdogan that the two countries should conduct bilateral trade in their own currencies as part of widening economic ties.

Bilateral trade jumped to $10.3 billion in 2008 from $2.4 billion in 2003, with Turkey running a large deficit largely due to its gas imports. Ankara and Tehran aim to boost the volume to $20 billion in the next few years. [continued…]

Turkey, Iran sign strategic deal to carry gas to Europe

Iran and Turkey signed a number of deals on Wednesday to facilitate the efficient flow of gas through Turkey to Europe, including accords on allocating some of Iran’s South Pars gas field to the Turkish Petroleum Corporation (TPAO), allowing Iranian gas to be transported via Turkey and allowing Turkmenistan’s natural gas to be pumped to Turkey via Iran, during Turkish Prime Minister Recep Tayyip Erdoğan’s visit to Turkey’s southeastern neighbor.

Turkish Energy Minister Taner Yıldız said the deals provided advantages for Turkey in the use and the sale of some phases of the South Pars gas field. “Its conditions and prices will be negotiated later,” the minister added. Iran, which has the world’s second-largest natural gas reserves, is Turkey’s second-biggest supplier of natural gas after Russia. Turkey had signed a preliminary deal in November 2008 for Iranian gas to be exported to Europe through Turkey and for Turkey to produce gas in the South Pars field.

The investment would amount to $3.5 billion. But this deal has been delayed by objections from the United States, which opposes new energy deals in Iran as part of Western efforts to isolate Tehran over its nuclear program. [continued…]

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Saudis seek payments for any drop in oil revenues

Saudis seek payments for any drop in oil revenues

Saudi Arabia is trying to enlist other oil-producing countries to support a provocative idea: if wealthy countries reduce their oil consumption to combat global warming, they should pay compensation to oil producers.

The oil-rich kingdom has pushed this position for years in earlier climate-treaty negotiations. While it has not succeeded, its efforts have sometimes delayed or disrupted discussions. The kingdom is once again gearing up to take a hard line on the issue at international negotiations scheduled for Copenhagen in December.

The chief Saudi negotiator, Mohammad al-Sabban, described the position as a “make or break” provision for the Saudis, as nations stake out their stance before the global climate summit scheduled for the end of the year. [continued…]

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Former US diplomat holds secret stake in Kurdish oil field

Former US diplomat holds secret stake in Kurdish oil field

It is widely known that the former US diplomat Peter Galbraith has been one of the most prominent figures in shaping the state structure of Iraq in the period after 2003, especially with his vocal advocacy of various forms of radical decentralisation and/or partition solutions for Iraq’s political problems that are reflected in his books and numerous articles in the New York Review of Books, especially in the period from 2004 to 2008. Until now, though, it has generally been assumed that Galbraith’s fervent pro-partition propaganda was rooted in an ideological belief in national self-determination and a principled view of radical federalism as the best option for Iraq’s Kurds. Many have highlighted Galbraith’s experience as a former US diplomat (especially in the Balkans in the 1990s) as key elements of his academic and policy-making credentials.

Today, however, it has emerged that the realities were probably rather different. For some time, Norway’s most respected financial newspaper, Dagens Næringsliv (DN), has been focusing on the operations of DNO, a small Norwegian private oil company in Kurdistan, especially reporting on unclear aspects concerning share ownership and its contractual partnerships related to the Tawke field in the Dahuk governorate. One particular goal has been to establish the identity of a hitherto unknown “third party” which participated with DNO in the initial production sharing agreement (PSA) for Tawke between 2004 and 2008, but was squeezed out when this deal was converted to a new contract in early 2008, prompting a huge financial claim of around 500 million US dollars against DNO which has yet to be settled. Today, DN claims to present proof that one of the two major “mystery stake-holders” involved in the claim was none other than Peter Galbraith, who allegedly held a five-percent share in the PSA for Tawke from June 2004 until 2008 through his Delaware-based company Porcupine. Galbraith’s partner was the Yemenite multi-millionaire Shahir Abd al-Haqq, whose identity was revealed by the same newspaper earlier this month. DN has published documents from Porcupine showing Galbraith’s personal signature, and today’s reports are complete with paparazzi photographs of Galbraith literally running away from reporters as they confront him in Bergen, where he is currently staying with his Norwegian wife. He refused to give any comment citing potential legal complications. [continued…]
(H/t to Helena Cobban.)

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The demise of the dollar

The demise of the dollar

n the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.

The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China’s former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. “Bilateral quarrels and clashes are unavoidable,” he told the Asia and Africa Review. “We cannot lower vigilance against hostility in the Middle East over energy interests and security.” [continued…]

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Iran and the pipelineistan opera

Iran and the pipelineistan opera

Oil and natural gas prices may be relatively low right now, but don’t be fooled. The New Great Game of the twenty-first century is always over energy and it’s taking place on an immense chessboard called Eurasia. Its squares are defined by the networks of pipelines being laid across the oil heartlands of the planet. Call it Pipelineistan. If, in Asia, the stakes in this game are already impossibly high, the same applies to the “Euro” part of the great Eurasian landmass — the richest industrial area on the planet. Think of this as the real political thriller of our time.

The movie of the week in Brussels is: When NATO Meets Pipelineistan. Though you won’t find it in any headlines, at virtually every recent NATO summit Washington has been maneuvering to involve reluctant Europeans ever more deeply in the business of protecting Pipelineistan. This is already happening, of course, in Afghanistan, where a promised pipeline from Turkmenistan to Pakistan and India, the TAPI pipeline, has not even been built. And it’s about to happen at the borders of Europe, again around pipelines that have not yet been built.

If you had to put that Euro part of Pipelineistan into a formula, you might do so this way: Nabucco (pushed by the U.S.) versus South Stream (pushed by Russia). Be patient. You’ll understand in a moment.

At the most basic level, it’s a matter of the West yet again trying, in the energy sphere, to bypass Russia. For this to happen, however — and it wouldn’t hurt if you opened the nearest atlas for a moment — Europe desperately needs to get a handle on Central Asian energy resources, which is easy to say but has proven surprisingly hard to do. No wonder the NATO Secretary General’s special representative, Robert Simmons, has been logging massive frequent-flyer miles to Central Asia over these last few years. [continued…]

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Iran ‘has secret nuclear arms plan’

Iran ‘has secret nuclear arms plan’

Britain’s intelligence services say that Iran has been secretly designing a nuclear warhead “since late 2004 or early 2005”, an assessment that suggests Tehran has embarked on the final steps towards acquiring nuclear weapons capability.

As world powers prepare to confront Iran on Thursday on its nuclear ambitions, the Financial Times has learnt that the UK now judges that Ayatollah Ali Khamenei, Iran’s supreme leader, ordered the resumption of the country’s weapons programme four years ago. [continued…]

Editor’s Comment — The American line is still, we’re all looking at the same intelligence but their are a variety of ways it can be interpreted. British intelligence is making an assertion which, if true, should be backed up by hard evidence. The US position implies that it regards this evidence as weak.

In dispute with Iran, path to Iraq is in spotlight

Gary Sick, an expert on Iran at Columbia University, said that ever since 1992, American officials had claimed that Iran was just a few years away from a nuclear bomb. Like Saddam Hussein, the clerical government in Iran is “despised,” he said, leading to worst-case assumptions.

“In 2002, it seemed utterly naïve to believe Saddam didn’t have a program,” Mr. Sick said. Now, the notion that Iran is not racing to build a bomb is similarly excluded from serious discussion, he said.

Mr. Sick, like some in the intelligence community, said he believed that Iran might intend to stop short of building a weapon while creating “breakout capability” — the ability to make a bomb in a matter of months in the future. That chain of events might allow room for later intervention.

Without actually constructing a bomb, Iran could gain the influence of being an almost nuclear power, without facing the repercussions that would ensue if it finished the job.

Greg Thielmann, an intelligence analyst in the State Department before the Iraq war, said he believed that the Iran intelligence assessments were far more balanced, in part because there was not the urgent pressure from the White House to reach a particular conclusion, as there was in 2002. But he said he was bothered by what he said was an exaggerated sense of crisis over the Iranian nuclear issue.

“Some people are saying time’s running out and we have to act by the end of the year,” said Mr. Thielmann, now a senior fellow at the Arms Control Association. “I’ve been arguing that we have years, not months. The facts argue for a calmer approach.” [continued…]

Iran offers conflicting messages

Tehran offers remarks by turns defiant and cooperative, leaving diplomats unsure if it will take seriously this week’s nuclear talks in Geneva. [continued…]

Iran is seeking a ‘two-way street’ at talks

The Iranian foreign minister, Manouchehr Mottaki, said Tuesday that talks between Iran and six major powers, which are to take place on Thursday, must be a “two-way street” and not just a long list of demands focused on his country’s nuclear program. [continued…]

Israel mutes its rhetoric against Iran as talks loom

Israeli leaders say they are willing to wait as President Obama plays out his strategy of negotiating with Iran while threatening stronger world sanctions if the talks fail. [continued…]

Iran plant could defer Israel strike

It may seem counterintuitive, but the news that Iran has a second, clandestine uranium enrichment plant, and has just test-fired long-range missiles, could actually put off any plans for a quick Israeli strike. [continued…]

China’s ties with Iran complicate diplomacy

Leaders of the House Foreign Affairs Committee swept into Beijing last month to meet with Chinese officials, carrying a plea from Washington: if Iran were to be kept from developing nuclear weapons, China would have to throw more diplomatic weight behind the cause.

In fact, the appeal had been largely answered even before the legislators arrived.

In June, China National Petroleum signed a $5 billion deal to develop the South Pars natural gas field in Iran. In July, Iran invited Chinese companies to join a $42.8 billion project to build seven oil refineries and a 1,019-mile trans-Iran pipeline. And in August, almost as the Americans arrived in China, Tehran and Beijing struck another deal, this time for $3 billion, that will pave the way for China to help Iran expand two more oil refineries. [continued…]

Iran Guards group buys 50 pct stake in telecoms firm

A consortium affiliated to the elite Revolutionary Guards bought 50 percent plus one share in Iran’s state telecommunications company for the equivalent of around $7.8 billion, Iranian media reported on Sunday. [continued…]

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NEWS & ANALYSIS & EDITOR’S COMMENT: Let’s push up the price of oil

Pentagon official warns of Israeli attack on Iran

Senior Pentagon officials are concerned that Israel could carry out an attack on Iran’s nuclear facilities before the end of the year, an action that would have enormous security and economic repercussions for the United States and the rest of the world.

A senior defense official told ABC News there is an “increasing likelihood” that Israel will carry out such an attack, a move that likely would prompt Iranian retaliation against, not just Israel, but against the United States as well. [complete article]

Israel-Iran: Attack or feint

An Israeli strike is fraught with potential pitfalls and by no means guaranteed of striking a major blow to the Iranian nuclear program, which would likely require multiple raids and risk a major military escalation. (See US, Iran: Empty threats, by Kamal Nazer Yasin for ISN Security Watch.).

Any attack would also impact deleteriously on Israel’s improved position vis-à-vis western nations, the University of Haifa’s Dr Soli Shahvar told ISN Security Watch.

Referring to Iran, Kam said, “They have better air defenses than they had before, though the more sophisticated system [S-300] is probably not operational. […] Russia did supply Iran with a new, much better system [29 Tor M-1 systems].”

Russian officials relate that the S-300 surface-to-air missile is capable of intercepting aircraft at up to 27,000m and at an operating distance of 145km and believe it is superior to the Israeli-deployed US Patriot. Israeli defense analysts have confirmed that Iranian receipt of the system would make it far more difficult for the Israeli air force to attack Iranian targets. Russian supply of the system is far from assured. [complete article]

Tehran puts on a show of strength

Psychological warfare is on the rise. This weekend, a senior Iranian general, Mir-Faisal Bagherzadeh, said his country was digging 320,000 graves for American soldiers scheduled to fight in Iran. “In implementation of the Geneva Conventions, the necessary measures are being taken to provide for the burial of enemy soldiers. We have plans to dig 15,000 to 20,000 graves for each of the border provinces, or a total of 320,000,” he said, pointing out that some of them would be mass graves, if necessary. This was “to reduce the suffering of the families of the fallen in any attack against, and prevent the repetition of the long and bitter experience of the Vietnam War”.

These may sound like big words – similar to those barked by Saddam Hussein and his information minister Mohammad Said al-Sahhaf in 2003 – but they carry real impact on the psychology of American troops. Iraq – with its weak army and corrupted regime – was impossible to chew for the Americans. Nobody can imagine how difficult a war would be against 65 million Iranians, with a well-trained, well-armed military indoctrinated with Shi’ite Islam and a strong sense of purpose against the “great Satan”.

In addition to building the graves – which has actually started – the Iranians have several actions they could resort to if war were declared between now and the end of President George W Bush’s tenure at the White House in January.

They can incite the Shi’ites of nations where there are US military bases; Saudi Arabia (33%), Kuwait (36%), Bahrain (80%). They can incite the Kurds of Turkey and create problems with the Shi’ites of Yemen. They can unleash hell in Iraq through proxies like the Mahdi Army of Muqtada al-Sadr and the Supreme Iraqi Islamic Council. The Shi’ites of these countries have strong bonds to Iran and would listen and respond, if duty calls, and if the Americans or Israel went to war against Tehran. [complete article]

Editor’s Comment

The US will not allow Iran to hamper oil shipments through the Strait of Hormuz, said the US Navy’s Fifth Fleet commander, responding to earlier threats by the leader of Iran’s Revolutionary Guards.

They will not close it. They will not be allowed to close it,” said Vice-Adm. Kevin J. Cosgriff of the strait, one of the world’s most vital waterways for the shipping of hydrocarbons.

Vice Admiral Cosgriff said what a naval commander gets paid for saying. But even as he spoke, many in the oil markets, rather than being reassured, must have been remembering “Millennium Challenge 2002.” As that exercise demonstrated, protecting the Strait of Hormuz is easier said than done.

As for red lines, I suspect the one that vexes Israel more than any other, is one that is treated as unspeakable, lest by being spoken the idea acquires wider currency: that the world (including Israel) could learn to live with a nuclear Iran.

If and when the debate turns in that direction, then the game will have been lost and a new balance of power will eventually emerge — one within which Israel will be required to make accommodations rather than continuing to assume the position of being exceptional.

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NEWS, OPINION & ANALYSIS: Global food crisis

A ‘revolutionary’ moment in Egypt?

The idea of the starving masses driven onto the streets to demand bread, and then being forced by the violent response of the state to seek its overthrow, had seemed impossibly quaint for decades — the stuff of a distant epoch, kept alive in Broadway musicals and Warren Beatty vehicles in a world where the masses were acquiring cell phones. Bread? Who needs bread? Let them eat arugula at globalization’s ever-expanding buffet table.

But a cursory look at the headlines of the past month — a general strike and mass protests in Egypt, the storming of the presidential palace in Haiti, violent protests in Cote D’Ivoire and Cameroon, demonstrations in Uzbekistan, Yemen and Indonesia, among others, suggests that the proverbial “wretched of the Earth” are arising, all over again, this time in response to skyrocketing food prices.

Turns out the Malthusians, and even — gasp! — their Marxist progeny, were not entirely wrong, after all: Spread capitalism to every corner of the globe (a planet already blighted by a century of industrialism with its attendant sometimes catastrophic climate) and the rich do, indeed, get richer, while the poor do get poorer, although not necessarily more numerous. The patterns are uneven, but basic laws of scarcity still prevail. Global food prices have risen 80% over the past three years, and the primary reason may be the success of capitalism in China and India over the past two decades: Their industrialization has spurred demand for energy beyond the capacity of supply, which has pushed oil prices to levels five times what they were in the mid 1990s. That, in turn, has raised pressure on food prices by making agricultural inputs more expensive, and by prompting the substitution of biofuel crops for edible ones on scarce farmland. And, of course, capitalism has indeed raised the living standards of hundreds of millions of people in those countries — they’re eating more, and better, particularly more meat. The fact that it takes some eight calories of grain to produce a single calorie of beef means that the expansion of meat protein in the diet of previously poor Chinese workers also creates a massive increase in global demand for grains. Throw in climate disasters such as the Australian drought, and you have food inflation spiraling so fast that even the U.N. agency created to feed people in emergencies is unable to keep pace. [complete article]

Food price rises threaten global security – UN

Rising food prices could spark worldwide unrest and threaten political stability, the UN’s top humanitarian official warned yesterday after two days of rioting in Egypt over the doubling of prices of basic foods in a year and protests in other parts of the world.

Sir John Holmes, undersecretary general for humanitarian affairs and the UN’s emergency relief coordinator, told a conference in Dubai that escalating prices would trigger protests and riots in vulnerable nations. He said food scarcity and soaring fuel prices would compound the damaging effects of global warming. Prices have risen 40% on average globally since last summer.

“The security implications [of the food crisis] should also not be underestimated as food riots are already being reported across the globe,” Holmes said. “Current food price trends are likely to increase sharply both the incidence and depth of food insecurity.” [complete article]

Food riots grip Haiti

United Nations peacekeepers fired rubber bullets and used tear gas to control mobs rioting over rising food prices in Haiti yesterday.

Angry protesters tried to break into the presidential palace in the capital, Port au Prince, and demanded that President Rene Preval step down.

Preval was inside the palace at the time, aides said. The president has made no public statements since riots broke out on the island last week. Five people have died in a week of protests, Reuters reported. [complete article]

Map of food riots
Where food riots have taken place around the world since January 2007. Map compiled by Allegra Stratton, The Guardian. Click on blue pointers for information on locality. Click on “minus” button for wider view.


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NEWS, OPINION & FEATURE: The cult of the suicide bomber

The cult of the suicide bomber

No one doubts that the road to Baghdad – or Tal Afar or Fallujah or Mosul – lies through Syria, and that the movement of suicide bombers from the Mediterranean coasts to the deserts of Iraq is a planned if not particularly sophisticated affair. What is astonishing – what is not mentioned by the Americans or the Iraqi “government” or the British authorities or indeed by many journalists – is the sheer scale of the suicide campaign, the vast numbers of young men (only occasionally women), who wilfully destroy themselves amid the American convoys, outside the Iraqi police stations, in markets and around mosques and in shopping streets and on lonely roads beside remote checkpoints across the huge cities and vast deserts of Iraq. Never have the true figures for this astonishing and unprecedented campaign of self-liquidation been calculated.

But a month-long investigation by The Independent, culling four Arabic-language newspapers, official Iraqi statistics, two Beirut news agencies and Western reports, shows that an incredible 1,121 Muslim suicide bombers have blown themselves up in Iraq. This is a very conservative figure and – given the propensity of the authorities (and of journalists) to report only those suicide bombings that kill dozens of people – the true estimate may be double this number. On several days, six – even nine – suicide bombers have exploded themselves in Iraq in a display of almost Wal-Mart availability. If life in Iraq is cheap, death is cheaper.

This is perhaps the most frightening and ghoulish legacy of George Bush’s invasion of Iraq five years ago. Suicide bombers in Iraq have killed at least 13,000 men, women and children – our most conservative estimate gives a total figure of 13,132 – and wounded a minimum of 16,112 people. If we include the dead and wounded in the mass stampede at the Baghdad Tigris river bridge in the summer of 2005 – caused by fear of suicide bombers – the figures rise to 14,132 and 16,612 respectively. Again, it must be emphasised that these statistics are minimums. For 529 of the suicide bombings in Iraq, no figures for wounded are available. Where wounded have been listed in news reports as “several”, we have made no addition to the figures. And the number of critically injured who later died remains unknown. Set against a possible death toll of half a million Iraqis since the March 2003 invasion, the suicide bombers’ victims may appear insignificant; but the killers’ ability to terrorise civilians, militiamen and Western troops and mercenaries is incalculable. [complete article]

Stuck in the Iraq loop

There is a paradox in the current situation in Iraq. We are told that the surge has worked brilliantly and violence is way down. And yet the plan to reduce troop levels—which was at the heart of the original surge strategy—must be postponed or all hell will once again break loose. Making sense of this paradox is critical. Because in certain crucial ways things are not improving in Iraq, and unless they start improving soon, the United States faces the awful prospect of an unending peacekeeping operation—with continuing if limited casualties—for years to come.

In a brilliant and much-circulated essay written in August 2007, “Anatomy of a Tribal Revolt,” David Kilcullen, a veteran Australian officer who advised Gen. David Petraeus during the early days of the surge, wrote, “Our dilemma in Iraq is, and always has been, finding a way to create a sustainable security architecture that does not require ‘Coalition-in-the-loop,’ thereby allowing Iraq to stabilize and the Coalition to disengage in favorable circumstances.” We have achieved some security in Iraq, though even this should not be overstated. (Violence is still at 2005 levels, which were pretty gruesome.) But we have not built a sustainable security architecture. [complete article]

Iraq’s insurgency runs on stolen oil profits

The Baiji refinery, with its distillation towers rising against the Hamrin Mountains, may be the most important industrial site in the Sunni Arab-dominated regions of Iraq. On a good day, 500 tanker trucks will leave the refinery filled with fuel with a street value of $10 million.

The sea of oil under Iraq is supposed to rebuild the nation, then make it prosper. But at least one-third, and possibly much more, of the fuel from Iraq’s largest refinery here is diverted to the black market, according to American military officials. Tankers are hijacked, drivers are bribed, papers are forged and meters are manipulated — and some of the earnings go to insurgents who are still killing more than 100 Iraqis a week.

“It’s the money pit of the insurgency,” said Capt. Joe Da Silva, who commands several platoons stationed at the refinery.

Five years after the war in Iraq began, the insurgency remains a lethal force. The steady flow of cash is one reason, even as the American troop buildup and the recruitment of former insurgents to American-backed militias have helped push the number of attacks down to 2005 levels. [complete article]

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FEATURE: Barreling into recession

How oil burst the American bubble

The economic bubble that lifted the stock market to dizzying heights was sustained as much by cheap oil as by cheap (often fraudulent) mortgages. Likewise, the collapse of the bubble was caused as much by costly (often imported) oil as by record defaults on those improvident mortgages. Oil, in fact, has played a critical, if little commented upon, role in America’s current economic enfeeblement — and it will continue to drain the economy of wealth and vigor for years to come. [complete article]

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NEWS ROUNDUP: Saudi Arabia, Iraq, Israel, Gaza, Syria

Bush prods Saudi Arabia on high oil prices

President Bush urged the Organization of the Petroleum Exporting Countries on Tuesday to take into account the toll that high oil prices are having on the American economy, gingerly touching on an issue that has begun to color the last year of his presidency and dominate the presidential election campaign. [complete article]

U.S. offers Saudis ‘smart’ arms technology

The most controversial element of the sales is the offer to the Saudis of Joint Direct Attack Munitions, technology that allows standard weapons to be converted into precision-guided bombs. The deal envisions the transfer to Saudi forces of 900 upgrade kits worth about $120 million. [complete article]

Minister sees need for U.S. help in Iraq until 2018

The Iraqi defense minister said Monday that his nation would not be able to take full responsibility for its internal security until 2012, nor be able on its own to defend Iraq’s borders from external threat until at least 2018. [complete article]

U.S. shifts Sunni strategy in Iraq

More than 70,000 members of mostly Sunni Arab groups now work for American forces in neighborhood security programs. Transferring them to the control of the Shiite Muslim-dominated government, as policemen and members of public works crews, has taken on a new urgency as American troops begin to withdraw, officials indicated in recent interviews, meetings and briefings. [complete article]

Ex-Baathists get a break. Or do they?

A day after the Iraqi Parliament passed legislation billed as the first significant political step forward in Iraq after months of deadlock, there were troubling questions — and troubling silences — about the measure’s actual effects. [complete article]

Bush trip revives Israeli push for pardon of spy

A balding, bearded visage loomed over President Bush’s visit here last week, peering down from banners and from posters on buses barreling along quiet streets. The face was that of Jonathan Pollard, an American who pleaded guilty in 1986 to passing top-secret information to Israel. [complete article]

Israeli pianist Daniel Barenboim takes Palestinian citizenship

Daniel Barenboim, the world renowned Israeli pianist and conductor, has taken Palestinian citizenship and said he believed his rare new status could serve a model for peace between the two peoples. [complete article]

Olmert faces right-wing rebellion

With Avigdor Lieberman, leader of the most right-wing party in Mr Olmert’s government already threatening to walk out, Benjamin Netanyahu, leader of the opposition Likud, urged both him and the religious party Shas to do so “to stop this process”. [complete article]

Haaretz probe: Shin Bet count of Gaza civilian deaths is too low

Israeli security forces killed 810 Palestinians in the Gaza Strip in 2006 and 2007, Shin Bet security service chief Yuval Diskin reported Sunday at the weekly cabinet briefing in Jerusalem. He estimated that some 200 of those killed were not clearly linked to terrorist organizations. [complete article]

Syria rebuilds on site destroyed by Israeli bombs

The puzzling site in Syria that Israeli jets bombed in September grew more curious on Friday with the release of a satellite photograph showing new construction there that [vaguely] resembles the site’s former main building. [complete article]

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NEWS: Iranians grab attention; Hormuz incident produces brief blip in the markets

U.S. describes confrontation with Iranian boats

uss-hopper.jpgOne Defense Department official, who spoke on the condition of anonymity to describe early reports from the Navy’s regional headquarters in Bahrain, said that the Iranian boats made a radio threat that the American ships would explode.

“The five Iranian fast boats essentially came in and charged the ships,” the Defense Department official said. The verbal warnings heard in English over the internationally recognized bridge-to-bridge radio channel said, “I am coming at you, and you will explode in a few minutes,” the official said.

A few minutes later, one of the Iranian boats placed two white boxes, possibly meant to be taken for mines, in the wake of one of the Navy ships, which caused another of the American vessels to take evasive action.

“Whether they’re just testing us to learn about our procedures, or actually trying to initiate an incident, we don’t know,” the official said.

The five fast boats were identified by Defense Department officials as belonging to Iran’s Islamic Revolutionary Guards Corps. Traditionally, the Revolutionary Guards’ maritime forces have operated in a far more hostile manner than the regular Iranian Navy.

“We have found in the past that the regular Iranian Navy was a courteous and professional organization, and our relations are as we would have with any other navy in the world,” said one Pentagon official who has studied the issue. “The I.R.G.C. Navy has a tendency to act in these unprofessional ways, and to be very provocative at times.”

Last March, Revolutionary Guards sailors captured 15 British sailors in waters the British insisted were international, and held them for nearly two weeks. [complete article]

Hotdogs and brinkmanship

There’s a fair bit of speculation on Iranian motives today, from Blake Hounsell wondering if the IRGC commanders are doing some oil-market speculating to talk of a “Gulf of Tonkin” exersize and the inevitable Rightwing calls to bomb, bomb, bomb Iran. Others see this incident as being connected to the US nomination races (no, really – everything is about the races for some folk) or to Bush’s Mid-East visit.

While the latter is the most likely if this event – not unusual except for one Iranian redneck on a radio – was deliberately singled out for orders to that effect by some senior commander, I’m going with Dave Schuler’s take – dumb hotdogs playing brinkmanship games.

I think it’s more likely that it’s just a bunch of IRG’s horsing around, taunting the Great Satan. You can’t peddle that sort of stuff for a generation or more without it having some effects.

On both sides, Dave. [complete article]

Diplomatic two-step in Iran

Tehran in recent days reshuffled its diplomatic team in key Middle East posts. It has cut short the tenure of its ambassador to Syria after just a two-year stint, replacing him with another hard-core loyalist of President Mahmoud Ahmadinejad. The Tehran government has also announced the departure of its point man on Iraq to a post in far-flung Japan.

The moves have sparked speculation that Ahmadinejad wants more control over the country’s foreign policy on Iraq and Lebanon.

But they could also just be complicated maneuvers to consolidate power within the ruling elite’s treacherous factional politics. [complete article]

Oil shrugs off Iran-US bounce, falls below $97

Oil fell more than $1 to below $97 a barrel on Monday, handing back gains triggered by reports of fresh tensions between Iran and the United States. [complete article]

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