Biden leaves Saudi Arabia empty-handed

Joe Biden has left the region empty-handed hoping the OPEC+ group, comprising Saudi Arabia, Russia and other producers, will boost production at a meeting scheduled for August 03, 2022.

Gulf states, which have refused to side with the West against Russia over Ukraine, are seeking a concrete commitment from the United States to strategic ties that have been strained over perceived US disengagement from the region.

President Joe Biden told Arab leaders on Saturday that the United States would remain an active partner in the Middle East, but he failed to secure commitments to a regional security axis that would include Israel or an immediate oil output rise.

Biden, who began his first trip to the Middle East as president with a visit to Israel, presented his vision and strategy for America's engagement in the Middle East at an Arab summit in Jeddah.

The summit communiqué was vague, however, and Saudi Arabia, Washington's most important Arab ally, poured cold water on US hopes the summit could help lay the groundwork for a regional security alliance - including Israel - to combat Iranian threats.

A plan to connect air defence systems could be a hard sell for Arab states that have no ties with Israel and balk at being part of an alliance seen as against Iran, which has a strong regional network of proxies including Iraq, Lebanon and Yemen.

Saudi Arabia's Foreign Minister, Prince Faisal bin Farhan Al Saud, said he was not aware of any discussions on a Gulf-Israeli defence alliance and that the kingdom was not involved in such talks.

He told reporters after the US-Arab summit that Riyadh's decision to open its airspace to all air carriers had nothing to do with establishing diplomatic ties with Israel and was not a precursor to further steps.

Biden focused on the summit with six Gulf states and Egypt, Jordan and Iraq, while downplaying the meeting with MbS which drew criticism in the United States over human rights concerns.

Biden needs the help of OPEC giant Saudi Arabia at a time of high crude prices and other problems related to the Russia-Ukraine conflict. Washington also wants to curb Iran's sway in the region and China's global influence.

Biden came to Saudi Arabia hoping to reach a deal on oil production to help drive down gasoline prices that are driving inflation above 40-year highs and threatening his approval ratings.

He leaves the region empty-handed but hoping the OPEC+ group, comprising Saudi Arabia, Russia and other producers, will boost production at a meeting on Aug. 3.

Gulf states, which have refused to side with the West against Russia over Ukraine, are seeking a concrete commitment from the United States to strategic ties that have been strained over perceived US disengagement from the region.

Riyadh and Abu Dhabi have been frustrated by US conditions on arms sales and at their exclusion from indirect US-Iran talks on reviving a 2015 nuclear pact they see as flawed for not tackling concerns about Iran's missile program and behaviour.

Israel had encouraged Biden's trip to Saudi Arabia, hoping it would lead to warmer ties between it and Riyadh as part of a wider Arab rapprochement.

 

 

Pakistan should forget buying Russian oil for the time being

I am an ardent supporter of buying Russian oil being sold at huge discount. However, on the second thought, without mincing my words, I would say Pakistan should forget buying Russian oil for the time being. The country must solicit better terms and conditions from countries currently meeting Pakistan’s requirements.

First and the foremost, Pakistani refineries are not tuned to refine Russian oil. Even if Pakistan decides to buy Russian oil, the prerequisite is making these refineries capable of refining Russian oil. At this juncture, Pakistan neither has the foreign exchange nor the time to re-tune the refineries.

Second making payment to Russian suppliers is a stumbling block. Even those European countries, heavily dependent on Russian oil and gas, are being pressurized by United States to gradually curtail their purchases of energy products from Russia. The payment process is also being made difficult. On top of all, Pakistan also does not have ample rubles.

Third, Pakistan already enjoys deferred payment facility from Saudi Arabia. The kingdom is also willing to give more foreign exchange, but it would certainly not approve taking money from it and buying oil from Russia.

Pakistan can also increase purchase of motor gasoline and diesel purchase from these two brotherly countries to avoid any retuning of the refineries in Pakistan.

UAE is already a joint venture partner in Pakistan’s largest refinery, Pak-Arab Refinery (PARCO) located at Mahmood Kot near Multan and black and white oil pipelines in Pakistan.

Forth, the sailing time from Saudi Arabia/United Arab Emirates to Pakistan is certainly shorter as compared to any of the Russian ports. Therefore, the benefit of discounted price would be eroded to a significant extent by higher freight cost.

Along with buying crude oil and POL products from Saudi Arabia and UAE, Pakistan should also negotiate with Qatar to sell LNG at concessional price that too at a deferred payment.

On the diplomatic front Pakistan should also convince United States to let the country buy LNG from Iran. The argument is simple, “If India being a member of QUAD can buy oil from Russia despite sanctions; Pakistan should also be allowed to buy gas from Iran”.     

As such the negotiations regarding ‘Iran Nuclear Deal’ has been dragged for too long. If United States is willing to allow Venezuela to export oil, sanctions on Iran should also be withdrawn immediately to save the world from crude oil and energy products becoming too expensive.

This is also to remind the policy makers that Iranian President Ebrahim Raisi has already assured Pakistan’s Foreign Minister Bilawal Bhutto Zardari the willingness of his country to meet Pakistan’s demand of oil, gas and electricity.

Israel signs free trade deal with UAE, first-ever with an Arab state

Israel entered its first-ever free trade agreement with an Arab state, when Economy Minister Orna Barbivai signed the deal with her counterpart in the United Arab Emirates on Tuesday.

Ambassador to the UAE Amir Hayek in a few words announced the signing of the agreement on twitter, tweeting Done! in response to a previous tweet on the topic.

Prime Minister Naftali Bennett praised the FTA as historic and the fastest to be signed in Israel's history. He thanked Crown Prince of Abu Dhabi Mohamed Bin Zayed for accelerating the process.

"We are continuing to warm the peace between the countries," Bennett tweeted.

On Monday, Barbivai said her visit to Dubai, “It is of strategic importance to the economic relations between Israel and the United Arab Emirates.”

"Together we will remove barriers and promote comprehensive trade and new technologies," she added. 

Israel and the UAE established full diplomatic relations in August 2020, in what was called the Abraham Accords. Bahrain, Sudan and Morocco followed soon after.

Israel has nineteen free agreements, including the one with the UAE. Israel also has a more limited free-trade agreement with Jordan, but the new deal with the UAE is much broader and is similar to those with the United States and with the European Union.

The free trade agreement is the UAE’s second, following one with India earlier this year.

This agreement covers 96% of the trade between Israel and the UAE, which was recorded last year at US$885 million.

That is more than double Israel's US$330 million in trade with Egypt in 2021, even though the two countries have had a peace agreement since 1979.

According to the Economy and Industry Ministry, the level of trade in 2020 was reported at US$120 million and at US$ one million in 2010. 

The FTA signing proceeded as planned, even though the UAE criticized Israel a day earlier for allowing Jews to visit the Temple Mount, Judaism's holiest site.

"The UAE today strongly condemned the storming of Al Aqsa Mosque courtyard by extremist settlers under the protection of Israeli forces," a statement by the Emirati Foreign Ministry read, calling on Israel "to take responsibility for reducing escalation and ending all attacks and practices that lead to the continuation of tensions."

There was no documentation of violence by Jews or Israelis on the Temple Mount this week, though some did pray at the site in contravention of the rules for Jewish visitors. Some Muslims threw rocks at visitors and police from the Al Aqsa Mosque.

The statement came a day after the annual Jerusalem Day flag march through the Old City, which was mostly peaceful, though some Jews and Muslims chanted calls for violence and some minor clashes, leading to about 50 arrests.

 

United States makes attempt to mend relations with United Arab Emirates

US President Joe Biden seems to have initiated efforts to mend its relationship with Abu Dhabi. Lately, some cabinet members led by Vice President visited to the United Arab Emirates, an oil-rich nation in the midst of a critical leadership change.

Rejection and perceived disinterest from Washington has led the UAE to recently act more boldly on the global stage. It abstained from a US-led resolution at the United Nations that condemned Russia’s invasion of Ukraine. Emirati officials have also refused to increase oil production in an effort to lower gas prices and continue to pursue closer ties with China.  

Following the death of Sheikh Khalifa bin Zayed al-Nahyan, the country’s second president, who had officially ruled since 2004, Biden this week dispatched his most senior cabinet officials led by Vice President Kamala Harris. She was joined by Secretary of State Antony Blinken, Defense Secretary Lloyd Austin and CIA Director William Burns.

The visit by the Biden administration’s top brass was one to express condolences — and congratulations — to the new leader, Crown Prince Sheikh Mohammed bin Zayed al-Nahyan. Known as MBZ, he is the late president’s half-brother.

Harris, in remarks after a meeting said the purpose of the trip was to reaffirm the shared commitment we have to security and prosperity in this region and also how the American people have benefited from this relationship in terms of security and prosperity.” She called the UAE a friend and partner.

The trip came as US officials attempted to woo the monarchy amid a long list of strains between Abu Dhabi and Washington. Another issue is that of a longtime American foe Iran, as the UAE has rejected the Biden administration’s pursuit of a nuclear deal with Tehran. The tensions stand in stark contrast to the close ties the UAE held with the former administration.

Abu Dhabi welcomed then-President Trump’s exit from the Iran nuclear deal. Most notably, the Gulf state benefited from normalizing relations with Israel through American proposed military sales and Washington pulling its support from Israeli plans to annex the West Bank. 

“MBZ, because he sees himself as a man of vision, and Abu Dhabi of being a significant and important country, he expects respect and certainly under Biden, doesn’t think he’s been treated with respect,” said Simon Henderson, Director of the Bernstein Program on Gulf and Energy Policy at The Washington Institute.

“Trump and Jared Kushner the president’s son-in-law and senior advisor sort of treated him with respect.”

Experts said that the trip by Biden officials signals the administration knows it has some work to do.

“I think the high level delegation signals that Washington would like to repair the relationship and it’s really important that they do that,” said Hussein Ibish, a senior resident scholar at the Arab Gulf States Institute in Washington.

Mohammed, 61, has been considered the de-facto ruler of the Emirates for nearly 10 years, since then-President Khalifa suffered a stroke in 2014 and was largely sidelined from power up until his death. 

Mohammed has held tremendous sway throughout the region during his time as crown prince of Abu Dhabi and is described by regional watchers as having a vision, focused on growing the Emirates wealth, making its economy an important global player and pushing back against what it views as the threat of political Islam, in particular in neighboring Iran and Qatar.

Gerald Feierstein, former ambassador to Yemen and a distinguished senior fellow on US diplomacy at Middle East Institute, said Mohammed’s influence on the Trump administration’s Abraham Accords — the normalization agreements between Israel, the UAE and Bahrain — signaled the crown prince’s desire to be a driver of events of the region more broadly, than just the Gulf.  

The UAE has also garnered greater independence from the US

“For the Emirates, they consider the US a less reliable security and regional partner than it has been considered in the past and so they’re willing to craft their own independent foreign policy,” said Courtney Freer, nonresident fellow with the Brookings Institution.

Abu Dhabi took issue early on in the Biden administration with what it viewed as a weak response to threats and attacks the Emirates faced from Yemen’s Iran-backed Houthi rebels, including Biden removing the Houthi terrorist designation.

Ibish, of the Arab Gulf States Institute, said the robust US response to support Ukraine following Russia’s invasion underscored the feeling that Washington was abandoning its security commitments in the Middle East.  

“They look at the firm and united and resolute response to the invasion of Ukraine and compare it to those missile attacks by the Houthis and they feel very second best and not particularly looked after,” he said.

That has left leaders in the Emirates looking for help elsewhere.

“Whatever Washington wants, MBZ will make his own deal with Iran because they’re neighbors across the waters of the Gulf. And Dubai in particular, has important contacts with Iran at least on a commercial level,” Henderson said. 

Also at issue are negotiations that were reportedly rejected by the UAE to buy 50 F-35 fighter jets from the US amid defense security conditions for the acquisition, a UAE official told Reuters in December. 

A State Department spokesperson, requesting anonymity, told The Hill. “The administration remains committed to the sales and are continuing consultations with the UAE to ensure that we have a clear, mutual understanding with respect to Emirati obligations and actions before, during, and after delivery.” 

Before the Biden administration visit this week, the US had already started to take steps toward repairing the diplomatic relationship, Ibish noted, in the form of an apology by Blinken to MBZ last month for the Biden administration’s delay in responding to Houthi attacks in Abu Dhabi this year.

“It’s the apology that goes a long way because the response really did seem insufficient and particularly in the light of the Ukraine invasion, where the difference of the Western response is very stark,” Ibish added.

Feierstein added that the Blinken-MBZ meeting in Morocco was a step in the right direction that cleared away a lot of the underbrush in the relationship.

“No two states ever see anything eye to eye, there are always differences in opinion and of position. But what you do want is a strong institutional link that allows you to work through those issues,” he added.

 

Prime Minister Shehbaz what have you done?

Looking at this advertisement published in a leading English newspaper of Pakistan has prompted me to communicate with my readers and or anyone who is worried about the fast deteriorating economic conditions of Pakistan.

I am ready to say without mincing my words that historically Saudi Arabia and United Arab Emirates (UAE) have been more than gracious in extending support to Pakistan, the first Muslim country to attain the status of ‘Atomic Power’.  

At this juncture when the negotiations with the lender of last resort, International Monetary Fund (IMF) have been marred there was an urgent need for Pakistan to have enough foreign exchange reserves, be it earned or borrowed, to meet the targets agreed with the Fund.

Since commercial borrowing could prove fatal, the only option was to approach the ‘time tested friends’, who have reciprocated as usual. Therefore, it is not a ’well-done’ by the incumbent prime minister, but graciousness of the Monarchs.

It is true that Mian Sahib, has been put in a very difficult position by the coalition partners, they don’t want to take responsibility of ‘bad’ decisions but to attain political mileage in the upcoming elections.

It appears that some of Mian Sahib’s advisors, fearful of the repercussions of ‘bad’ decisions are suggesting to sweep the issues under the carpet, which can make the things even more complicated for him as well as Pakistan.

Mian Sahib has already committed ‘double fault’ by not increasing prices of energy products, despite recommendations by the Oil & Gas Regulatory Authority (OGRA).

The harsh reality is that with each passing day, price of crude oil hovering at higher level and Rupee witnessing erosion in value the quantum of subsidy has already become unmanageable.

The sooner the incumbent government increases the tariffs of energy products, the better it will be for Pakistan. It may be a blessing that Pakistan’s friends are willing to supply oil/POL products at deferred payment, but the outstanding amount has to be settled in due course of time.

The other decisions which has offended overseas Pakistanis, remitting around US$2.5 billion per month, is ‘unwillingness’ of the incumbent government to allow them to cast their votes in the general elections of Pakistan.

According to informed sources, overseas Pakistanis have threatened to withdraw amounts kept in Roshan Digital Accounts, if they are not allowed to cast their vote in forthcoming general election.

To conclude, there is a friendly advice to the incumbent government that it must address the grievances of overseas Pakistanis without any further delay. While the IMF has indicated to give Pakistan US$2 billion over the next two years, overseas Pakistanis are sending more than this amount every month.

Saudi Arabia and UAE view United States an unreliable partner under Joe Biden

A professor at Georgetown University in Qatar says that leaderships in Saudi Arabia and the United Arab Emirates look at the Biden administration as an unreliable partner who is not worthy to jeopardize the ties with Russia.

“They feel that under Joe Biden the United States has not been a reliable partner, especially since the close, personal relationship that existed with the Donald Trump and since the United States is indirectly talking to Iran in Vienna,” Mehran Kamrava told The Tehran Times.

Though US-Persian Gulf ties are deep-rooted when it comes to military contracts, the Russia-Ukraine conflict shows that Arab states in the region may leave United States alone in some cases. 

The UAE and Saudi Arabia appear to be sending a message to the US, said Kristian Coates Ulrichsen, a Middle East fellow at Rice University’s Baker Institute for Public Policy. Talking to Al Jazeera last month, Ulrichsen said they are going to act upon their interests and not what the US think their interests are.

Giorgio Cafiero, CEO of Gulf State Analytics, a Washington, DC-based geopolitical risk consultancy, also said, “Syrian President Al-Assad coming to the UAE, shortly after the (Persian) Gulf Arab country opted to abstain from a UN Security Council resolution condemning the Russian invasion of Ukraine last month, tells us that the Emiratis are very serious about asserting their autonomy from the United States.” 

“For Arab states, Russia is an important actor with whom they can hedge their bets with the United States.”Arab states, especially Saudi Arabia and the Emirates, felt they lost a close friend in the White House after Donald Trump was defeated in the 2020 elections. 

“Clearly, the Saudi and Emirati leaderships do not have the same kind of relationship with Biden that they had with Trump, and they feel slighted,” Kamrava notes. 

“Also, given the very close relationship between both Saudi Arabia and the UAE with Russia, neither wants to risk alienating President Putin,” adds professor from Georgetown University. 

Following is the text of the interview:

Do you think the Ukraine war would expand to other countries? 

Since the war is currently ongoing, it is difficult to guess whether or not it will expand and if it will usher in a new order in the region. 

Are we going to witness a new order in the region?

Clearly, we see the emergence of diverging trends, however, and the gap between the EU and the US on the one side and Russia and a number of other countries, like China and Iran, on the other. 

Saudi and UAE leaders declined calls with Biden amid the Ukraine conflict. What are the implications of such a reaction?

Clearly, Saudi and Emirati leaderships do not have the same kind of relationship with Biden that they had with Trump, and they feel slighted as a result. They feel that under Biden the United States has not been a reliable partner, especially since the close, personal relationship that existed with the Trump White House is gone and since the US is indirectly talking to Iran in Vienna. Also, given the very close relationship between both Saudi Arabia and the UAE with Russia, neither wants to risk alienating President Putin. 

Why do the Arab states prefer not to be engaged in the US-Russia conflict while they are allied with Washington?

The Arab states do not want to jeopardize their increasing closeness with Russia. For them, Russia is an important actor with whom they can hedge their bets with the United States, and as a result, they are reluctant to take positions that are overtly antagonistic toward Russia.

China and the many Arab states avoided condemning Russia for launching war on Ukraine. Do you think the Ukraine crisis will turn into a new form of confrontation between the West and the East?

That might indeed be the case, but, again, it is too early to tell. Clearly, we are seeing tectonic shifts occurring in regional alignments. But how these shifts will turn out is hard to tell. There are new and emerging powers in the East, the most notable being China and South Korea, and, at least in relation to South Korea, it would be difficult to say that it is not part of the Western or American orbit. Nevertheless, there is no doubt that Russia is seen in the US and in the EU as a “disruptive actor” and China is perceived as a major technological competitor. 

Do you see a kind of hesitation in Persian Gulf Arab state's betting on America in the defense system? Do they think that America left them alone, especially in the Yemen war?
    
I think the US will remain to be an outside security provider for the southern states of the Persian Gulf in the near future. The personal relationship between Persian Gulf rulers and US President may change, but there are deeper structural factors that for the time being tie the two sides together. Some of the more important of these include deep military and security ties, with the Persian Gulf states continuing to prefer American weaponry and equipment; massive and growing economic and commercial ties between the two sides, with the US having emerged as a favorite destination of money and investments going from the Persian Gulf; and continued political and economic ties. In addition to all this, there is also heavy psychological reliance on the US as a security provider. Therefore, there is no indication that the US military presence in the Persian Gulf region will be lessened at all in the near future. 

Courtesy: The Tehran Times

Abu Dhabi to invest US$10 billion in Israel

The biggest news from Israeli President Isaac Herzog's visit to the United Arab Emirates was not to do with diplomacy or defense but the huge amount Abu Dhabi plans to invest in Israel.

According to the sources privy to the details, UAE Crown Prince Mohamed bin Zayed has decided to unfreeze US$10 billion in Israeli companies that he had promised to former Prime Minister Benjamin Netanyahu.

The UAE's large sovereign funds will divide the investments between them, including the ADIA Fund and the Mubadala Fund, although the first fund that will enter the Israeli market is the ADG (Abu Dhabi Growth) Fund, part of the ADQ Group. This fund plans investing US$200 million in Israeli companies during the year 2022, and a similar sum each year over 10 years.

A senior source, Abu Dhabi has been waiting patiently for the Israeli political scene to stabilize before renewing the process of fulfilling bin Zayed's promise. Herzog's visit, personal, diplomatic but not political, meant that he was the right person at the right time to officially initiate the investment process.

ADG Fund Chairman Faris Mohammed Al Mazrouei met with several members of the small Israeli delegation that accompanied President Herzog. At meetings in Abu Dhabi, the Israelis and Emiratis spoke about the mechanisms for the investment and how organizations like the Manufacturers Association of Israel and the Israel Export Institute would help direct the investments.

Another important link in the chain will be Start-Up National Central, which in recent years has specialized in matching up Israeli startups with investors. Start-Up National Central CEO Avi Hasson, who traveled to the UAE as part of President Herzog's delegation, informed that the unfreezing of the US$10 billion by the UAE for investment in Israel was highly significant for both the countries. He said that the Emirati use the investment funds as a strategic tool and are expressing through the funds the importance with which they see relations with Israel.

Hasson thinks that Israel is perceived by the Emirati as a symbol of innovation and progress due to the companies located here, and therefore it represents a good investment. "This is not philanthropy or a political investment fund," he said. "The Emirati are seeking profits from their investments. We do not have a commercial agenda but extensive knowhow of the abilities in the advanced technology sector and the ability to connect Israeli companies with the precise needs of investors."

Hasson stressed there has to be a match between the Israeli ‘here and now’ approach and the slower UAE approach of first building trust through a genuine connection between the parties and only then moving forward.

Yemeni rebels seize UAE ship

According to an AP news, Yemen’s Houthi rebels seized an Emirati-flagged ship in the Red Sea on Monday. In another latest sign of Mideast turmoil hackers targeted a major Israeli newspaper’s website to mark the killing of a top Iranian general in 2020

The seizure of the Rwabee marks the latest assault in the Red Sea, a crucial route for international trade and energy shipments. The Iranian-backed Houthis acknowledged the incident off the coast of Hodeida, a long-contested prize of the grinding war in Yemen.

No group immediately claimed responsibility for the hacking of The Jerusalem Post. The hackers replaced the Post’s homepage with an image depicting a missile coming down from a fist bearing a ring long associated with Qassem Soleimani, the Iranian general killed by a US drone strike in Iraq two years ago.

First word of the Rwabee’s seizure came from the British military’s United Kingdom Maritime Trade Operations, which only said an attack targeted an unnamed vessel around midnight. The coordinates it offered corresponded to the Emirati-flagged landing craft Rwabee, which hadn’t given its location via satellite-tracking data for hours, according to the website MarineTraffic.com.

A statement from the Saudi-led coalition, carried by state media in the kingdom, acknowledged the attack hours later, saying the Houthis had committed an act of “armed piracy” involving the vessel. The coalition asserted the ship carried medical equipment from a dismantled Saudi field hospital in the distant island of Socotra, without offering evidence.

“The Houthi militia must immediately release the ship, otherwise the coalition forces shall take all necessary measures and procedures to deal with this violation, including the use of force,” Brig. Gen. Turki al-Malki said in a statement.

A Houthi military spokesman, Yahia Sarei, announced that rebel forces had seized what he described as an Emirati “military cargo ship” carrying equipment into Yemen’s territorial waters “without any license” to engage in “hostile acts” against Yemen’s stability. He said the rebels would offer more details on the seizure later.

An employee at the vessel’s owners, Abu Dhabi-based Liwa Marine Services, told The Associated Press that the Rwabee appeared to have been the target but said they had no other information and declined to comment further. The employee did not give her name and hung up.

A similar incident happened in 2016 involving the Emirati vessel SWIFT-1, which had been sailing back and forth in the Red Sea between an Emirati troop base in Eritrea and Yemen. The vessel came under attack by Houthi forces in 2016. The Emirati government asserted the SWIFT-1 had carried humanitarian aid; UN experts later said of the claim that they were ‘unconvinced of its veracity’.

In the attack targeting The Jerusalem Post’s website, the image posted by the hackers depicts an exploding target from a recent Iranian military drill designed to look like the Shimon Peres Negev Nuclear Research Center near the city of Dimona. The facility is already home to decades-old underground laboratories that reprocess the reactor’s spent rods to obtain weapons-grade plutonium for Israel’s nuclear bomb program.

Under its policy of nuclear ambiguity, Israel neither confirms nor denies having atomic weapons.

In a tweet, the Post acknowledged being the target of hackers.

“We are aware of the apparent hacking of our website, alongside a direct threat to Israel,” the English-language newspaper wrote. “We are working to resolve the issue & thank readers for your patience and understanding.”

The newspaper later restored its website. It noted Iran-supporting hackers previously targeted its homepage in 2020 “with an illustration of Tel Aviv burning as then-Prime Minister Benjamin Netanyahu swam” with a life preserver.

There was no immediate response from the Israeli government. The hack comes after Israel’s former military intelligence chief in late December publicly acknowledged his country was involved in Soleimani’s killing. The US drone killed Soleimani as he was leaving Baghdad’s international airport.

In Iraq on Monday, troops shot down two ‘suicide drones at the Baghdad airport, American and Iraqi officials said. No group immediately claimed the attack, though one of the drones’ wings had words ‘Soleimani’s revenge’ painted on it in Arabic. Militias backed by Iran have been suspected in similar assaults. No injuries or damage were reported in the incident.

Iran also did not immediately acknowledge the hack. However, the country has in recent days stepped up its commemorations of the slain Revolutionary Guard general. Memorial services were scheduled to be held Monday for Soleimani.

As the head of the Quds, or Jerusalem, Force of the Revolutionary Guard, Soleimani led all of its expeditionary forces and frequently shuttled between Iraq, Lebanon and Syria. Quds Force members have deployed into Syria’s long war to support President Bashar Assad, as well as into Iraq in the wake of the 2003 US-led invasion that toppled Saddam Hussein, a longtime foe of Tehran.

Soleimani rose to prominence by advising forces fighting the Islamic State group in Iraq and in Syria on behalf of the embattled Assad.

US officials say the Guard under Soleimani taught Iraqi militants how to manufacture and use especially deadly roadside bombs against US troops after the invasion of Iraq. Iran has denied that. Many Iranians to this day see Soleimani as a hero who fought Iran’s enemies abroad.

Tensions have been high in the region amid a shadow war between Iran and Israel, as well as the collapse of Tehran’s nuclear deal with world powers after then-President Donald Trump in 2018 unilaterally withdrew America from the accord. Negotiations aimed at resuscitating the deal continue in Vienna.

 

Saudi bid to become regional business hub

Reportedly, Saudi Arabia has issued licenses to 44 international entities to set up regional headquarters in the capital Riyadh, as the kingdom seeks to project an image of change to lure foreign capital and talent.

Multinationals in sectors including technology, food and beverages, consulting and construction are among the entities eligible to set up headquarters. They include South Korea's Samsung, Deloitte, Unilever, Baker Hughes and Siemens.

Crown Prince Mohammed bin Salman is spearheading a campaign to make Saudi Arabia a regional business hub. State news agency SPA cited Fahd al-Rasheed, President of the Royal Commission for Riyadh City, as saying the moves would add 67 billion riyals (US$18 billion) to the Saudi economy and create around 30,000 jobs by 2030.

The country has set out a Vision 2030 program ‑ a neoliberal reform agenda aimed at reducing the Kingdom's economic dependence on oil.

Saudi Arabia also needs to reassure foreign investors nervous about putting money into the kingdom due to reputational risks stemming from purported human rights violations at home and in Yemen, and the sour taste left by the murder in 2018 of Saudi journalist Jamal Khashoggi in Istanbul.

The world's top oil exporter and largest Arab economy is also setting a deadline, saying in February it would give foreign entities until the end of 2023 to set up shop in Riyadh or risk losing out on government contracts.

Saudi Minister of Investment Khalid al-Falih told Nikkei Asia that it was not a case of merely competing with the UAE for foreign direct investment.

"We believe all capitals of the Middle East will continue to grow and thrive with the growth of Saudi Arabia. With the achievements of Vision 2030 [and] with the growth of Riyadh, it will create a spillover effect into the region," al-Falih said in the interview.

"Riyadh's economic quality will transform into higher growth sectors such as technology, health care, logistics, advanced manufacturing, food processing [and] financial centers ... centered in Riyadh to serve the broader region."

Al-Falih said his country was working to improve lifestyles for foreigners based in Riyadh.

"We are only starting the climb. This is an escalator we are riding to improve liveability in Riyadh," he said. "We are on a continuous, never-ending journey to improve our liveability [and] ... investment environment. Boosting skills for our talent and improving our competitiveness for the Saudi economy."

Saudi Arabia investment minister Khalid al-Falih speaks to Nikkei Asia in an interview in Riyadh. (Photo by Saudi Ministry of Investment)

But Ryan Bohl, a senior geopolitical risk analyst for intelligence firm Middle East at Stratfor, said it is unlikely that Riyadh will be able to quickly make improvements in legal and banking services, social issues, entertainment and education.

"Riyadh will take years to create the natural pulls needed to get these Asian and International institutions to shift over to Riyadh," he said. "There is a real chance Saudi Arabia weakens these provisions before the deadline, which would reduce the challenge to Dubai's model."

"But even if they don't, the Emirati government might decide to either provide compensation for those that endure Saudi penalties -- create new policies that liberalize the UAE's labor market further to make it an easier place to live and work than Saudi."

During the recent Riyadh Future Initiative Investment Summit, dubbed "Davos in the Desert," international investors were reluctant to speak openly about moving their Dubai headquarters to Riyadh.

"The Gulf region is growing fast enough to sustain offices in multiple jurisdictions," Tarek Fadlallah, CEO of Japanese Nomura Asset Management (Dubai), told Nikkei.

Anthony Habis, head of the Middle East and North Africa for BNY Mellon, said the U.S. investment bank was expanding its presence in Saudi Arabia with its local entity and strategic partnerships. "We are proud to have a Saudi CEO and local team based in Riyadh, and we share in the Saudi Vision 2030 of building capital markets."

Hazem Ben-Gacem, co-CEO of Investcorp Bahrain, lauded Riyadh's recent progress. "Crown Prince Mohammed bin Salman has done an exceptional job to challenge the status quo, not just in terms of structural and fiscal reforms but also on the social front."

Chinese artificial intelligence company Sensetime said it will be growing its presence in Saudi Arabia, but did not comment further.

The assassination of Khashoggi prompted numerous investors, including the CEOs of BlackRock and JPMorgan Chase, to pull out of an investment event in Riyadh in 2018.

A senior consultant who spoke to Nikkei on condition of anonymity said that "reputational risks are still a concern for some international and Asian investors." The person added, however, that while some investors "will be excited by the prospect and level of business activity in Riyadh, others will have social considerations."

Oman urges Israel to create Palestinian State

Omani Foreign Minister told his Israeli counterpart he hopes Israel's new government will take concrete steps towards creating an independent Palestinian state, with east Jerusalem as its capital, reported Omani state media said on Thursday.

Oman's Badr al-Busaidi spoke by phone to Israel's Foreign Minister Yair Lapid, according to ONA, the state news agency of Oman, which has a longstanding policy of neutrality in the turbulent region and often acts as a mediator.

In February this year, Busaidi said Oman was satisfied with its current relationship with Israel, even after fellow Gulf States the United Arab Emirates and Bahrain normalized ties with Israel last year under US-brokered accords.

Lapid will travel to the United Arab Emirates (UAE) next week in the first official visit by an Israeli minister to the Gulf state since they established diplomatic relations. He will inaugurate the Israeli Embassy in Abu Dhabi and the Consulate General of Israel in Dubai.

Israel and Oman enjoy bilateral relations. In line with the Arab League position in relation to Israel, Oman does not officially recognize the state of Israel and took part in the boycott of Israel during much of the 20th century.

It may be recalled that in 1994, the two countries established unofficial trade relations, which were discontinued in 2000. In 1994, then-Prime Minister of Israel Yitzhak Rabin visited Oman, where he was greeted by Sultan of Oman; Qaboos bin Said al Said in Muscat.

Among other things, the two sides discussed issues such as sharing water and how to improve water supplies.

In 1995, a few days after Rabin was assassinated, then-acting Prime Minister Shimon Peres hosted Omani foreign minister Yusuf bin Alawi bin Abdullah in Jerusalem.

In January 1996, Israel and Oman signed an agreement on the reciprocal opening of trade representative offices.

In 2018, Israeli Prime Minister Benjamin Netanyahu led a delegation to Oman and met with Sultan Qaboos and other senior Omani officials.

In February 2019, Omani foreign minister, Yusuf bin Alawi, said that Oman will not normalize its relations with Israel until a sovereign Palestinian state has been established.

Widening breach between Israel and Jordan

Israeli ties with Jordan have not been good for a long time. Prime Minister Benjamin Netanyahu and King Abdullah do not publicly meet and do not publicly speak. It looks as if Israel’s relations with its neighbor are non-existent; there is barely any trade, tourism, or diplomatic cooperation.

The reasons behind the tension vary. There is the Palestinian issue and lack of progress on the peace track, which the King seems to blame on Netanyahu. There is continued settlement construction which the King blames on Netanyahu. There are other issues like Jordanian concern that the Hashemite Kingdom is losing its hold over al-Aqsa Mosque as well as the way Netanyahu gave a hero’s welcome to an Israeli security guard who shot and killed two Jordanians in Amman in 2017.

The origins of the latest round can be found last Wednesday when Jordanian Crown Prince Hussein bin Abdullah had planned to visit al-Aqsa Mosque on the Temple Mount following coordination with Israel on his security. However, the prince arrived at the Israeli border with more armed guards than had been agreed on, Israeli sources said. The additional guards were not permitted to enter Israel and Hussein canceled his visit.

As a result – and possibly in response – Jordan canceled the permission it had given Israel for Netanyahu’s plane to pass through its airspace on its way to the United Arab Emirates where he was supposed to meet on Thursday with the UAE leader and Crown Prince of Abu Dhabi Mohammed bin Zayed al-Nahyan.

As a result, Netanyahu had to cancel what was supposed to have been a historic first visit to the UAE. It was the fourth time the visit was canceled or postponed, not exactly a positive sign when it comes to building new relations between the two countries.

Israel’s decision to prevent a large number of armed Jordanians from entering the Temple Mount was likely done to try and preserve an image of Israeli sovereignty over the holy site. In response, and due to the insult, the Jordanians banned Netanyahu’s plane for the same reason, if you don’t let us into your sovereign territory, we won’t let you into our sovereign territory.

All of this is bad for Israel, bad for Jordan and bad for the region. One of the pillars of stability for Israel over the last few decades has been the fact that it does not face a conventional military threat from the East due to the peace it has with Jordan. As a result, Israel has been able to focus its military where it really needs to – from Gaza in the South to Hezbollah and Syria in the North.

Jordan has also gained from its peace with Israel. It improved its relations with the United States, began to purchase American military hardware and reaps benefits from the close military relationship between Jerusalem and Amman.

For too long, the peace between Israel and Jordan has been cold. It has existed almost exclusively on a government-to-government level with very little public expression or people-to-people exchange.

Normalization between Israel and the UAE shows what is possible but also the type of investment that is needed to make it work. Israel and Jordan need to set aside their differences and reestablish common ground. They will not agree on everything, but working together will be more beneficial for the two countries.

United Arab Emirates appoints first ambassador to Israel

Ruler of Dubai and Vice President of United Arab Emirates, Sheikh Mohammed bin Rashid Al Maktoum has sworn in the country's first ambassador to Israel, Mohammed Mahmoud Al-Khaja, according to the Dubai Media Office.

The UAE's cabinet last month approved the establishment of an embassy in Tel Aviv in Israel, state media said, while Israel announced its embassy had opened in Abu Dhabi, after the UAE and Israel agreed to normalize relations.

Hundreds of Israelis booked flights and went to visit the Gulf state after the historical signature of the Abraham Accords. In light of this, the Tourism Ministry is hoping to attract many new tourists from the UAE as soon as travel returns when COVID-19 infection rates drop.

However, due to Israel closing its border in efforts to contain new coronavirus variants, hundreds of Israeli remained stuck in Dubai. 

In addition to tourism, Israel and the UAE are currently building bridges in a variety of sectors, from hi-tech to space exploration and ag-tech.

The UAE's Hope Probe success in entering orbit around Mars last week places it in the unique club of only five agencies able to reach the red planet so far. The Gulf state even has plans for settlements on Mars, which it hopes would become a reality in less than a century. 

Israel's own Beresheet moon project is meant to launch a second mission in three year's time. The scientific cooperation between the Start up Nation and the UAE is likely to be at the focus of diplomats, and think tanks, from both countries in the near future.

Israel and the UAE both had important milestones last year points to how important the current relations are. Israel and the UAE have many shared interests, whether it is a shared regional outlook about threats and instability, or the fact that both countries are close partners of the United States.

Both countries are also pioneering technology products, whether in fintech or food tech or other sectors, many of which have been on display, or will be soon, in joint ventures and exhibitions in the UAE which Israelis are taking part in.

For instance, Israeli companies flocked to the GITEX trade show last year and hope to be at IDEX in Abu Dhabi this month and also GISEC this summer.

Qatar offers to mediate between Iran and United States

Qatar is ready to mediate between Iran and the United States as Joe Biden, assumes office of President, after the turbulent years of the Trump administrations, said Lolwah al-Khater, spokeswoman for Qatar’s Foreign Ministry. She also pointed out that Qatar is committed to engaging in a “constructive dialogue” between Tehran and the Arab states of the Persian Gulf.

“Qatar has expressed its willingness to play such a role, yet we have to be invited by both parties, who are still hesitant to take this step, in terms of entering and engaging in direct negotiations,” said al-Khater.

She stated that Iran and Arab states of Persian Gulf’s are geographical realities in the region and they need to start a direct dialogue.

“Iran is a geographical reality in our region and the [Persian] Gulf states are a geographical reality, no one is going away, and that is why it is very important to engage in a meaningful, constructive and direct dialogue," the spokeswoman asserted.

She said a dialogue between Iran and its Arab neighbors is even more important than a dialogue between Iran and the United States.

“If it was important for the US to have a dialogue with Iran, then it is even more important for us as [Persian] Gulf Cooperation Council (GCC) countries to have a meaningful and constructive dialogue with Iran, one that will preserve the collective security of our region, the rights of our peoples and ensure a prosperous future for coming generations,” she continued.

The Qatari official also pointed to Qatar’s trade ties with Iran and Turkey during the GCC crisis, saying that these ties helped Qatar in achieving a GDP growth more than that of its neighbors.

“Looking back, the economic gains are significant,” she said of the outcome of the crisis, pointing out that Qatar's GDP grew more than that of its neighbors during the blockade, when Doha strengthened its trade relations with Turkey, Iran and other countries in the area beyond the GCC.

The comments came a few weeks after Qatar mended ties with its Arab neighbors in a reconciliation deal brokered by the US. The deal put an end to a three-year-and-half dispute between Qatar and an Arab quartet of Saudi Arabia, the United Arab Emirates, Bahrain and Egypt. In June 2017, the Saudi-led quartet severed diplomatic ties with Qatar and imposed a total blockade on the tiny Persian Gulf nation.

The four countries closed their airspace, land, and sea routes to Qatari planes, cars, and vessels, a move that prompted Qatar to use Iranian airspace. Kuwait, a country stuck in the middle of the dispute between its neighbors, had studiously worked to reconcile the opposing sides and succeeded in doing so in December.

On 5th January 2021, leaders of the GCC - Saudi Arabia, the UAE, Bahrain, Qatar, Kuwait and Oman- attended the al-Ula summit in Saudi Arabia in which they signed a reconciliation deal, putting an end to the years long GCC crisis.

“There have been no concessions from any side (...) the GCC crisis was a lose-lose situation for everyone, so ending this crisis, I think, will be a gain for everyone”, al-Khater said of the deal.

According to al-Khater, Doha has emerged stronger from the crisis, at least from an economic point of view, as in the past three and a half years it has “diversified its supply chains and reinforced its position as one of the largest energy exporters globally.”

“The blockade was a situation we did not choose, for sure, but we were able to live with it and sustain the situation. Ending the blockade is about the collective interest of our entire region, not only in Qatar’s interest,” the spokeswoman insisted.

Al-Khater’s remarks came after Qatar’s Foreign Minister Sheikh Mohammed bin Abdulrahman Al Thani called for dialogue between Iran and its Arab neighbors to resolve outstanding differences, expressing hope that the two sides would hold a summit to deescalate tensions.

“We are hopeful that this [summit] would happen and we still believe that this should happen. And I think this is also a desire that being shared among the other GCC countries. I just mentioned to you that there is a difference between the countries on the way how to approach such a dialogue. Also from the Iranian side, they have expressed their willingness several times to engage with the GCC countries,” he said in a recent interview with Bloomberg TV.

Bin Abdulrahman underlined that the time should come when the Persian Gulf’s Arab states will sit at the table with Iran and reach a common understanding. “We have to live with each other. We cannot change geography. Iran cannot move the GCC away from its neighborhood and the GCC cannot move Iran from the neighborhood,” he continued.

The chief Qatari diplomat also expressed readiness to facilitate dialogue between Iran and the GCC states or back anyone facilitating such a dialogue.

He also hoped that the much-anticipated talks between Iran and the US on the 2015 nuclear deal –officially known as the Joint Comprehensive Plan of Action (JCPOA)- would help ease tensions between Iran and its Arab neighbors.

Bin Abdulrahman expressed hope that what will happen between Iran and the US on the JCPOA would contribute to resolving the differences between Iran and the GCC. “Of course, things are interconnected at the end of the day,” he noted, adding that Qatar will support negotiations between the stakeholders.

“We will be welcoming this idea. We maintain a good relationship with the US and we maintain a good relationship with Iran,” bin Abdulrahman stated.

Iran welcomed the Qatari call for dialogue between Iran and the Persian Gulf’s Arab states, underlining that the solution to the region’s challenges lies in cooperation to form a strong region free from foreign interference.

“Iran welcomes my brother FM @MBA_AlThani's call for inclusive dialogue in our region. As we have consistently emphasized, the solution to our challenges lies in collaboration to jointly form a 'strong region': peaceful, stable, prosperous & free from global or regional hegemony,” Iranian Foreign Minister Mohammad Javad Zarif said in a tweet following the Qatari foreign minister’s call for dialogue.

 

Qatar deal with Saudis not to affect ties with Iran

Following a landmark deal between Qatar and Arab quartet to end a three-year bitter Persian Gulf dispute, Doha announced that its decision to mend ties with the quartet will not affect its ties with Iran.

Doha had agreed to cooperate on counter-terrorism and “transnational security” with Saudi Arabia and three other states that had imposed a regional embargo on Qatar, Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman al-Thani told the Financial Times, adding that “bilateral relationships are mainly driven by a sovereign decision of the country . . . [and] the national interest.” “So there is no effect on our relationship with any other country,” he continued.

In June 2017, Saudi Arabia, Bahrain, Egypt, and the United Arab Emirates – commonly known as the Arab Quartet - severed diplomatic ties with Qatar, and imposed a total blockade on the tiny Persian Gulf nation. The four countries closed their airspace, land, and sea routes to Qatari planes, cars, and vessels, a move that prompted Qatar to use Iranian airspace. Kuwait, a country stuck in the middle of the dispute between its neighbors, had studiously worked to reconcile the opposing sides and succeeded to do so only recently.

Shortly after cutting ties with Qatar at the time, the Arab quartet submitted a list of 13 demands to Doha that included, among other things, shutting down Al Jazeera, the Qatar-funded satellite TV network, curbing its relations with Iran, closing a Turkish base in the Persian Gulf state, and halting all military cooperation with Ankara.

The quartet also accused Qatar of supporting terrorism, an accusation Doha vehemently denies.

Lately, Qatar and Saudi Arabia reached a deal to end their dispute and restore diplomatic ties as soon as possible. Qatari Emir Sheikh Tamim bin Hamad Al Thani participated in the last week’s Persian Gulf Cooperation Council’s summit, which was held, with great fanfare, in the Saudi ancient city of AlUla. During the summit, the Arab leaders agreed to put an end to the disagreements and normalize their relations. While the leaders were preparing to take part in the summit, Saudi Arabia announced that it will reopen all its border crossings with Qatar. The United Arab Emirates also followed suit.

Qatar’s reassurance that the deal with Riyadh will not alter its relation with Iran came after Saudi Arabian Crown Prince Mohammed bin Salman railed against Iran during the summit, in which the emir of Qatar was present.

The Saudi crown prince told the summit that they are “in utmost need to unite” their efforts to advance their region and confront the challenges surrounding them. Mohammad bin Salman warned of what he called “the threats posed by the Iranian regime’s nuclear program, its ballistic missile program, its destructive sabotage projects as well as the terrorist and sectarian activities adopted by Iran and its proxies to destabilize the security and stability in the region.”

The summiteers also issued a statement against Iran that echoed the Saudi accusations. The statement elicited a strong response from Iran.

Iran’s Foreign Ministry spokesman Saeed Khatibzadeh said the statement is the result of a lack of understanding of the situation in the region and beyond, the Saudi regime’s grudge and its political pressure on the Persian Gulf Cooperation Council (GCC).

“At a time when, given the compromise between the Persian Gulf states, the regional countries are expected to rethink their viewpoints and approaches, which have had no other result than animosity and hostility over the past decades, and to adopt a new policy, some Persian Gulf Cooperation Council members persist in remaining on the wrong path and resorting to the threadbare ‘Iranophobia’ scheme,” Khatibzadeh said in a statement on Wednesday.

Khatibzadeh noted the Saudi regime’s regional policy and its destructive approaches vis-à-vis Iran and other countries have destroyed a major part of the neighboring countries’ wealth and turned the region into a depot of weapons supplied by Western companies, which has paved the way for foreigners’ further interference in this sensitive region.

“By hijacking the Persian Gulf Cooperation Council and its meetings and imposing its destructive viewpoints, the Saudi regime is promoting hate and violence in the region,” the spokesman continued.

He noted, “Regrettably, some regional countries have become a gateway for the entrance of the destructive Israeli regime into the region although they are seeing Tel Aviv’s crimes in occupied territories and this regime’s desire to viciously infiltrate into Islamic countries.”

“By continuing to pursue their injudicious policies, these countries have killed off the chances of cooperation proposed by the Islamic Republic of Iran in recent years in a bid to establish security and stability in the region,” Khatibzadeh said.

Can US$23 billion sale of arms to United Arab Emirates be stopped?

According to a Reuters report, three US senators said Wednesday that they would introduce legislation seeking to halt the Trump administration’s effort to sell more than US$23 billion of drones and other weapons systems to the United Arab Emirates (UAE), setting up a showdown with the president just weeks before he is due to leave office.

Democratic Senators Bob Menendez and Chris Murphy and Republican Senator Rand Paul will introduce four separate resolutions of disapproval of President Donald Trump’s plan to sell more than US$23 billion worth of Reaper drones, F-35 fighter aircraft and air-to-air missiles and other munitions to the UAE.

The huge sale could alter the balance of power in the Middle East, and members of Congress have scrape the administration’s attempt to rush it through, having sent a formal notice to Congress only last week.

Many lawmakers are concerned that the UAE would use the weapons in attacks that would harm civilians in Yemen, whose civil war is considered one of the world’s worst humanitarian disasters.

When the deal was announced, Amnesty International warned that the weapons would be used for “attacks that violate international humanitarian law and kill, as well as injure thousands of Yemeni civilians.”

While the resolutions bring attention to lawmakers’ questions about the massive sales, and could delay them, they are unlikely to stop them.

US law covering major arms deals lets senators force votes on resolutions of disapproval. However, to go into effect the resolutions must pass the Republican-led Senate, which rarely breaks from Trump. They also must pass the Democratic-led House of Representatives and survive Trump vetoes.

Incoming President, Joe Biden could ultimately stop them for reasons of national security, making a prediction on the final outcome difficult.

The senators said the Trump administration, seeking to rush the sale as it brokered a peace deal between the UAE and Israel, circumvented the normal review process. They said State and the Pentagon failed to respond to their inquiries.

Weaponry involved includes the world’s most advanced fighter jet, more than 14,000 bombs and munitions and the second-largest sale of U.S. drones to a single country.

The Senate Foreign Relations and House of Representatives Foreign Affairs committees have the right to review and attempt to block weapons sales.

Past measures to block arms sales over concerns about Yemeni casualties passed the House and Senate with bipartisan support, but failed to get enough Republican backing to override Trump’s vetoes.

Lawmakers have also expressed concern about whether the UAE sales would violate a longstanding agreement with Israel that any US weapons sold in the Middle East would not impair its “quantitative military edge” over neighboring states.

Menendez is the ranking Democrat on the Senate Foreign Relations Committee and in line to become chairman next year if Democrats take control of the Senate in Georgia runoff elections in January.

 

And finally Saudi Arabia bows down before US mantra

The decision by OPEC plus to cut production can be termed a time-out to avert a tripartite war. Lately, there has been significant deterioration in relations between the United States and Saudi Arabia.

Reportedly, nearly 50 US Republican lawmakers warned Saudi Crown Prince Mohammed bin Salman on the eve of this week’s OPEC oil ministers’ video-conference that economic and military cooperation between the United States and Saudi Arabia was at risk. The congressmen demanded that the kingdom must convince Russia to save oil marker from a collapsed.

The United Arab Emirates (UAE) had joined Saudi Arabia in raising production in a move that was sparked by Russia’s initial refusal to extend production cuts agreed early this year but more fundamentally was designed to knock out competition from US shale producers that had turned the United States into the world’s largest oil producer.

It is being portrayed that Saudi Arabia, Russia and the UAE share a desire to render the US shale industry uncompetitive. The prime objective of Russia is to end the US hegemony by stripping it off its status of largest oil producing country.

The threats for Arabian Peninsula monarchs and the US have been raised by the collapse of the oil price as well as demand in the midst of a global economic meltdown.

For Saudi Arabia and the UAE, the stakes were their relationship with the US and significant reputational damage with a move that put at risk tens of millions of American jobs at a time more than 17 million people have been rendered jobless in the United States in the past four weeks.

Oil is but the tip of an iceberg in efforts, particularly in the case of the UAE, to manage a divergence in interests with the United States without tarnishing the country’s carefully groomed image as one of Washington’s closest allies in the Middle East.

Emirati gestures were designed to ensure that it would not be a target in any military confrontation between the United States and Iran.

However, when UAE began reaching out to Iran last year by sending a coast guard delegation to Tehran to discuss maritime security in the wake of alleged Iranian attacks on oil tankers off the coast of the Emirate, the relationship got bitter.

The Trump administration remained silent when the UAE last October released US$700 million in frozen Iranian assets that ran counter to US efforts to strangle Iran economically with harsh sanctions.

While the United States reportedly blocked an Iranian request for US$5 billion from the International Monetary Fund (IMF) to fight the virus, the UAE was among the first nations to facilitate aid shipments to the Islamic republic.

The shipments led to a rare March 15 telephonic conversation between UAE foreign minister Abdullah bin Zayed bin Sultan Al Nahyan and his Iranian counterpart, Mohammad Javid Zarif.

UAE officials stressed that there would be no real breakthrough in Emirati-Iranian relations as long as Iran supported proxies like Hezbollah in Lebanon, pro-Iranian militias in Iraq and Houth rebels in Yemen. The UAE gesture contrasted starkly with a Saudi refusal to capitalize on the pandemic.

A against this, Saudi Arabia appeared to reinforce battle lines by accusing Iran of “direct responsibility” for the spread of the virus. Government-controlled media charged that Iran’s allies, Qatar and Turkey, had deliberately mismanaged the crisis.

Moreover, the kingdom, backing a US refusal to ease sanctioning of Iran, prevented the Non-Aligned Movement from condemning the Trump administration’s hard line.

In a further indication of a divergence of interests, the UAE was alleged for trying to sabotage US support for Turkey’s military intervention in northern Syria as well as a Turkish-Russian engineered ceasefire in the region.

It was also reported that UAE Crown Prince Mohammed bin Zayed had promised Syrian President Bashar al-Assad US$3 billion, out of this US$250 million were paid upfront to break the ceasefire in Idlib, one of the last rebel strongholds in Syria.

Prince Mohammed had hoped to tie Turkey up in fighting in Syria, which would complicate Turkish military support for the internationally recognized Libyan government in Tripoli. The UAE aids Libyan rebel forces led by Field Marshal Khalifa Haftar.

A tweet by Prince Mohammed on 28th March declaring support for Syria in the fight against the coronavirus was designed to keep secret the real reason for the UAE payment.

“I discussed with Syrian President Bashar al-Assad by phone the repercussions of the spread of the coronavirus and assured him of the UAE’s support of and assistance for the brotherly Syrian people in these exceptional circumstances. Human solidarity in times of adversity supersedes all else, Sisterly Syria will not be alone in these difficult circumstances,” Prince Mohammed said. It is unlikely that Prince Mohammed’s explanations will convince policymakers in Washington.

Nevertheless, the United States, Saudi Arabia and the UAE are likely to hide cracks in their relations, but it is only a matter of time the cracks will re-appear.

Turkey terms US sanctions against Iran ‘blatant violation of international laws’

Dr. Osman Faruk Logoglu, a senior member of Turkey’s Republican People's Party, condemning the US move to force his country to buy oil from Saudi Arabia and UAE instead of Iran has termed the move “flagrant violation of international law and sovereignty of nations to trade freely.”

In continuation of the US hostile policies against the Iranian nation, the White House recently decided not to reissue waivers on Iranian oil after these expire in early May. The statement went on to say that the United States, Saudi Arabia, and the United Arab Emirates have pledged to ensure that the global market will have sufficient oil supply following Washington's decision to terminate sanctions waivers for countries importing Iranian oil.

Logoglu said, “The sanctions are illegal because these have been imposed unilaterally without a mandate from the UN Security Council or by any other authorized body.”  He also said, that the US was certainly not entitled to import Iranian oil or goods itself but has no right to stop others from engaging in what is legal and proper.  

Logoglu was of the opinion that the US effort to drive Iranian oil exports to zero is not possible.  There will certainly be buyers of Iranian oil who will not comply with US sanctions.  China has already declared that its trade with Iran is legal and normal.  Turkey has also taken a stance against the US move.

The US decision is not likely to bring peace and stability in the region, yet harm the Iranian people. Turkey has rejected unilateral sanctions and impositions on how to conduct relations with neighbors.  Iran's exports might be curtailed for some time in the near future, but in the longer run the volume of its exports could/should rise. Turkey expects adverse reactions to the US decision to grow in due course of time that could help Iran in selling more of its oil.

Logoglu said, “Iran is our neighbor.  We have a broad range of economic relations. Oil is one major element in the nexus of our ties with Iran.  The physical proximity is also an important asset as far as Iranian oil is concerned.   Given the state of our problematic relations with both Saudi Arabia and the UAE, there is no incentive for Turkey to buy oil from them.   

Logoglu, was very clear and said, “Even if Turkey reduces its oil imports from Iran and starts looking for other sources, the alternative for Turkey will be neither Saudi Arabia nor the UAE.  Current conditions do not allow Turkey to turn in that direction.  In any case, the US is not in a position to dictate Turkey where it is to buy its oil from.”

United States biggest arms seller

Over the years it is being said that the United Sates creates most of the conflicts around the world but very few people are able to understand the underlying motive. It is the lust to keep its arsenal factories running at highest capacity utilization.

My second blog posted on 26th June highlighted this aspect. One of the latest reports by Reuters provides the latest numbers, though these pertain to 2011 and a lot has changed lately.

The report says that during 2011 the US arms sales touched record level US$66.3 billion, mainly because of $33.4 billion sales to Saudi Arabia alone. Other key buyers included United Arab Emirates and India.

The US sales were nearly 78 per cent of the global arms sales, which rose to $85.3 billion during 2011. The previous US record sales of $38.2 billion were achieved during 2008.

While Washington remained the world’s leading arms seller, nearly all other major suppliers, except France, recorded decline in sales during 2011. France signed arms sales valued at $4.4 billion in 2011, up from $1.8 billion a year earlier.

Russia, the world’s number two arms dealer, saw its sales nearly halved to $4.8 billion in 2011. The four major European suppliers — France, the United Kingdom, Germany, and Italy — saw their collective market share drop to 7.2 per cent in 2011 from 12.2 per cent a year earlier.

Saudi Arabia emerged the biggest arms buyer among developing countries, concluding $33.7 billion weapons deals in 2011, followed by India with purchases of $6.9 billion and the United Arab Emirates with $4.5 billion. A point worth laughing is ‘Iran is fueling arms sales especially to Saudi Arabia and the United Arab Emirates’.

The three major beneficiaries of the arms sales were Boeing, United Technologies and Lockheed Martin. The sale of $33.4 billion to Saudi Arabia comprised of 84 Boeing F-15 fighters, dozens of helicopters built by Boeing and Sikorsky Aircraft, a unit of United Technologies Corp.

The sale of $3.49 billion to the United Arab Emirates comprised of Lockheed Martin Corp’s Terminal High Altitude Area Defense, an advanced missile shield and $940 million for 16 Chinook helicopters built by Boeing.

The United States seems to be following a unique strategy whereby extreme volatile situation in created in the Middle East and imposition of economic sanctions on Iran. This helps in keeping crude oil price high. However, all these petrodollars are bagged by selling arms to oil rich countries.

The only point of concern is that the arms sales are on the rise due to growing animosity among the Muslim countries, especially Arabs vs. Iran. In the past Iraq assaulted Iran and the war continued for a decade.

During this war Saudi Arabia and Kuwait gave billions of dollars to Iraq to wipeout Iran from the global map. The stage is being prepared once again for a better coordinated assault on Iran but all remain shy of the nuclear capabilities of Iran. Though, Israel keeps on talking about attacking Iran, threat of nuclear war makes all jittery.