Iran-Eurasian Economic Union trade reported at US$1.4 billion in 8 months

The value of non-oil trade between Iran and members of the Eurasian Economic Union (EAEU) were US$1.4 billion during the first eight months of the current Iranian calendar year (March-November 2020) as per data released by Tehran Chamber of Commerce, Industries, Mines and Agriculture (TCCIMA). Trade with Eurasia accounted for 2.8% of the country’s total non-oil trade in the mentioned period.

According to details, Iran exported 1.8 million tons of commodities worth US$639 million to the EAEU members in the period under review, registering a 20% fall in terms of weight and a 6% decline in terms of value. The country’s trade with its Eurasian partners declined 11% as compared to the previous year’s same eight-month period.

During this time span, Iran's exports to Russia and Belarus increased significantly in terms of weight and value, while exports to three other countries, namely Armenia, Kyrgyzstan, and Kazakhstan, decreased.

Eurasian destinations accounted for only 2.4 percent of Iran’s total exports in the first eight months of the current year, according to the said data.

Among Eurasian trade partners, Russia was Iran's top export destination with US$285 million, followed by Armenia with US$233 million worth of imports from the Islamic Republic, while most of Iran's imports also came from Russia (US$727 million).

Iran and Eurasian Economic Union reached a free trade agreement in October 2018 based on which about 862 commodity items were subjected to preferential tariffs. The interim agreement enabling the formation of a free trade area between Iran and the EAEU was signed on May 17, 2018, and officially came into force on October 27, 2019.

Iran is a very important market in the region and the development of ties with this country is of high significance for the EAEU members (Russia, Belarus, Armenia, Kazakhstan, and Kyrgyzstan).

The free trade agreement between Iran and the Union has laid the ground for the expansion of trade ties between the two sides.

The agreement with the bloc has increased Iran’s exports to the EAEU member states significantly, which is a turning point for the Islamic Republic's plans for boosting non-oil exports during the US sanctions.

China and Russia emerging key players of energy markets

Joe Biden’s presidency will hopefully not interfere with OPEC+ actions taken to rebalance oil markets, Russian Deputy Prime Minister and former Energy Minister Alexander Novak said recently.

“We can see that the new US administration is making statements contradictory to the country’s policy from the last four years,” Novak said, adding, “As far as we can see there will be more discussion of climate topics. This could affect US oil production.”

“We hope that the changes to the policy of the US administration will not have an impact on the joint actions, which, first of all, are designed to play a positive role for the global economy and energy markets,” Novak also said.

The president-elect has prioritized climate action and has threatened a ban on oil and gas drilling on federal land, which caused a vocal reaction from the industry, with the American Petroleum Institute pledging to use “every tool at its disposal” to fight this plan.

Biden has also promised to end fossil fuel and mining subsidies, which would be difficult to do with the current make-up of Congress as well as opposition from within the Democratic Party. Instituting a drilling ban for federal lands will also face challenges from opponents, but, interestingly enough, some in the oil industry are not that worried, the President cannot ban drilling on private lands, and this is where most of US drilling done.

If anything, a Biden presidency should be positive news for OPEC+ on the face of it and with his making climate change a top priority. However, Biden has already declared Russia the biggest threat for the United States and has suggested a rethink of relations with Saudi Arabia, meaning he would be hardly willing to make any moves that would benefit either of the two countries.

China Iran joint drilling

Drilling operations of the first well of the game-changing but highly-controversial Phase 11 of Iran’s supergiant South Pars non-associated natural gas field officially began lately. Significant gas recovery from the enormous resource will commence in the second half of the next Iranian calendar year that begins on 21 March 2021. The long-stalled Phase 11 development supposedly saw the withdrawal of all Chinese involvement in October 2019. In reality, though, China is still intimately involved in its development and is looking to further scale up its activities following the inauguration of Joe Biden as US President on 20th January 202.  Along with completing the crucial Goreh-Jask pipeline oil export route by the end of the current Iranian calendar year (ending on 20 March 2021), building out its value-added petrochemicals production to at least 100 million metric tons per year by 2022, and ramping up production from its hugely oil-rich West Karoun cluster of oil fields to at least one million barrels per day (bpd) within the next two years, optimizing the natural gas production from its South Pars gas field is a top priority for Iran.

With an estimated 14.2 trillion cubic meters (tcm) of gas reserves in place plus 18 billion barrels of gas condensate, South Pars already accounts for around 40 per cent of Iran’s total estimated 33.8 tcm of gas reserves – mostly located in the southern Fars, Bushehr, and Hormozgan regions – and about 80 per cent of its gas production. The 3,700-square kilometer (sq.km) South Pars sector of the 9,700-square km basin shared with Qatar (in the form of the 6,000-square km North Dome) is also critical to Iran’s overall strategy to sustain natural gas production across the country of at least 1 billion cubic meters per day (Bcm/d), with Phase 11’s target production capacity being 57 million cubic meters per day (mcm/d), and to its corollary plans to become a world-leader in the liquefied natural gas (LNG) market. 

Given the size and scope of Phase 11, it became a focal point of U.S. attention in the aftermath of its unilateral withdrawal from the Joint Comprehensive Plan of Action (JCPOA) in May 2018 and during the active re-imposition of sanctions toward the end of that year. “The pressure that the US put on [French oil giant] Total [which at the time of its withdrawal in the middle of 2018 from Phase 11 held a 50.1 per cent stake in the US$4.8 billion project and had already invested around US$1 billion] was enormous,” a senior Iranian oil and gas industry source told OilPrice.com. “Its ruthless handling of Total was designed by the US to show the EU [European Union] – which was trying to find a way to ignore the new U.S, sanctions – that, regardless of the EU’s efforts to avoid going along with the new US restrictions on Iran, it had better do so, or else,” he added. “On the eve of the signing of the next wave of financing for SP11, the US Treasury Department telephoned senior bankers at the bank that was organizing the money and told them that if the financing went ahead then the U.S. would instigate a full historic investigation of all of the bank’s dealings since 1979 to every country that had been blacklisted by the US, and it told the French government the same thing,” he underlined. “The US Treasury also said that all French companies would not win any major contracts with US companies whilst Total stayed in Iran, but if Total withdrew then the US would make a similar project available to it to compensate,” he said. 

Iran-Russia

Iran has stated its interest in attracting investments from Russian oil companies to help develop its oilfields, Russia’s TASS news agency said, quoting Iranian Oil Minister Bijan Zanganeh. Iran is hoping to not only attract investments into its oil industry, but looking to increase its energy cooperation with Russia to offset the harsh US sanctions that have reduced its oil exports over the last year.

Deputy Prime Minister Alexander Novak met with the Iranian Oil Minister recently. “A broad range of trade and economic cooperation matters is also successfully explored between our countries. Although this year has become a tough challenge for the whole global community, economic relations between Russia and Iran do not lose prior dynamics but become more active and meaningful instead,” Novak said.

The talks come at a time when Iran is hit particularly hard by the effects from the Covid-19 pandemic, on top of the US sanctions that have hampered Iran’s main source of income, oil exports. According to some medical professionals, the country may be quickly approaching a catastrophe, on top of the economic depression it is currently going through. For Iran, the culmination of an economic depression and an unprecedented health crisis has resulted in crime sprees, a rash of suicides, business closures, lower standards of living, substance abuse, and evictions.

All this may make Iran more amenable to energy deals that Russia proposes. China and Iran are essentially the last development firms that remain in Iran. Iran has gotten the short end of the stick when it comes to energy deals with Russia before, most notably when Iran was facing the threat of US sanctions in May 2018. Then, too, Iran was on the back-foot.

India holds joint naval exercises with Vietnam Navy

Lately, Indian Navy sent a warship to hold joint exercises with Vietnamese warships to assert navigation rights on the South China Sea as both countries try to boost maritime cooperation amid rising border disputes with China.

The INS Kiltan, an anti-submarine warfare corvette, took part in a two-day Passage Exercise or ‘PassEx’ with the warships of Vietnam after it arrived at Ho Chi Minh City to deliver humanitarian assistance for those affected by floods in central Vietnam. The Indian Navy said that the drill was aimed to "reinforce maritime interoperability and jointness."

The Indian Navy's assertion of navigation rights is on the lines of the Freedom of Navigation patrols that the US regularly takes out in the South China Sea to challenge Chinese territorial claims. 

Beijing, which has made expansive maritime claims in the South China Sea and militarized islands there, has watched the exercises with a wary eye. Liu Zongyi Shanghai of the Institute of International Studies (SIIS) wrote in the state-sponsored China Military Online that the joint operation is a bid by India to exert pressure on China through the South China Sea, to force it to back off from eastern Ladakh. The Indian and Chinese militaries are locked in a stand-off in the Himalayan border region of Ladakh after Chinese soldiers intruded into territory claimed by both countries. A border clash in Galwan in June killed about 20 Indian soldiers and an unspecified number of Chinese soldiers. 

The opinion piece, authorized by the Central Military Commission of China, says India's meddling with South China Seas and strategic partnership with Vietnam was to counter China on the land boundary issue. It said the Indian army was finding it "extremely challenging" to supply the troops in the Galwan Valley and Pangong Tso lake area in Ladakh. But those assertions were not independently verified and Chinese party mouth-pieces are known to make such propaganda claims. India has refused to back off in the face of Chinese aggression, with Indian troops moving quickly and boldly to outmaneuver Chinese troops and occupy mountain ridges, putting intruding Chinese troops at a tactical disadvantage.

Both nations have stationed thousands of troops in the frigid heights and have dug in for the long haul, recent reports have said.

The Indian Navy also adopted an aggressive posture during the Ladakh clashes and could, in the event of a war, hold an advantage in the Indian Ocean basin through which Chinese shipping has to pass.

Zongyi added that India's recent strengthening of military cooperation with Vietnam and Indonesia and building of military facilities near the Malacca Strait was with an "important purpose of guarding against China, even throttling its development."

Vietnam also has maritime disputes with China in the South China Sea region. Though China claims sovereignty over the region and its vast reserves of oil and gas, Vietnam has made counterclaims, along with other littoral states like Indonesia, Malaysia, Brunei and the Philippine. 

According to the Deccan Herald, the 'PassEx' comes a week after Indian Prime Minister Narendra Modi had a virtual summit with his Vietnam counterpart Nguyen Xuan Phuc. Modi had then formally handed over a high-speed patrol boat, which was the first of a fleet of 12 that India had promised to Vietnam to help it guard its maritime boundary in the face of growing Chinese aggression. The leaders had also stressed the need to maintain freedom of navigation and over flight in the South China Sea.

India's ONGC Videsh has a long-standing partnership with PetroVietnam for exploration of oil and gas in Vietnam, which has irked China, says Deccan Herald.

 

Will Saudi-Israel relations normalize after Joe Biden takes oath?

The Jerusalem Post has disclosed, there are expectations that there will be normalization of relations between Israel and Saudi Arabia by the end 2021. There is high confidence among some that normalization will not come before the Trump administration exits nor in the early stages of the Biden administration, but certain trends will be evident in their own ways.

The assertions come following a series of sometimes complementary and sometimes seemingly contradictory statements by top Israeli officials in recent months as the normalization trend lurched forward. Confronted with the assertions, the Foreign Ministry had no official comment.

Last week, Intelligence Minister Eli Cohen said that a deal could come with the Saudis in the next few years, but not before 20th January 2021 – nor did he publicly specify by the end of 2021.

This came following Cohen’s statement on 2nd November 2020 that a deal with the Saudis could be close, though he qualified his prediction in light of uncertainty at the time about who would win the US election as well as future Iran policy.

On 23rd November it was widely reported that Prime Minister Benjamin Netanyahu had recently met with Saudi Crown Prince Mohammed bin Salman (MBS) as part of a joint visit to the Kingdom along with US Secretary of State Mike Pompeo.

A flood of confirmations and denials – Netanyahu himself publicly refused to comment - appeared to make it clear that the visit had happened and was viewed as a sign of relations moving forward, but was supposed to have been kept secret.

Incidentally, the Post has learned before that MBS has previously secretly visited Israel.

Back on 25th October 25021 Channel 12 had reported that Mossad Director Yossi Cohen had privately said to those around him that the Saudis were waiting until after the US election, but that they could potentially announce normalization as a “gift” to the winner.

The implication from the report was that such an announcement could even come almost immediately after the election.

However, the Post reported later that the Channel 12 report either misunderstood or did not fully flesh out what the Mossad’s Director had said. In actuality, Cohen’s comments in closed conversations in October had been more nuanced.

Speaking a week before the US election, the Post learned that the spymaster had said that if US President Donald Trump won, there could be an almost immediate announcement.

Yet – if as the polls correctly predicted – now President-elect Joe Biden won the election, although the Saudis would still want a normalization deal with Israel, there would not necessarily be a clear timeline.

Cohen had emphasized that the Saudis did not want to give a gift to Trump and then get nothing for it upon a Biden administration taking over the reins.

Rather, Cohen understood at the time that a Biden administration may want to link normalization with the Saudis to progress with negotiations with the Palestinians.

This was the opposite tactic of the Trump administration, which was trying to pressure the Palestinians to show flexibility in negotiations with Israel by moving ahead with normalization deals without them.

What is interesting about the latest information learned by the Post is that now, almost two months after the US election, there is once again higher confidence that there will be a deal with the Saudis by the end of 2021.

If before November 3, there was far more uncertainty from both Intelligence Minister Eli Cohen and Mossad Director Yossi Cohen about how the Saudis would conduct themselves with Biden, now there are top officials who have greater confidence on the issue.

Though some of this could be from informal signals sent between Israeli officials and Biden transition figures, some of the confidence may come from a renewed understanding of the Saudis’ intentions regardless of how exactly they are treated by the incoming administration.

Mossad chief Cohen first suggested the possibility of official ties with the Saudis in a rare on-record interview with Channel 12 in mid-September and has been secretly visiting there for years.

Former IDF chief Lt. Gen. (ret.) Gadi Eisenkot in 2017 publicly announced that Israel was sharing intelligence with the Saudis as the countries grew closer. 

Mideast tensions reach new highs with Trump's term nearing end

Israel’s normally tense relations with the Islamic Republic of Iran has grown more taught in recent days, as mutual threats and promises of retaliation have been lobbed by both governments while the sides await Joe Biden to take oath. 

On Sunday, the spokesman for the National Security and Foreign Policy Committee of the Iranian Parliament reacted harshly to last week’s news that an Israeli submarine had crossed the Suez Canal on its way to the Persian Gulf.

 “Israel must know that our response to aggression against our national security will be strong and massive,” Abu al-Fadl Amoui, told reporters, accusing the Jewish state of dragging the region “into a tension that creates chaos in the last days of the Trump presidency.”

Last week, a surfaced Israeli Dolphin AIP class submarine was spotted crossing the canal separating Israel and Egypt. According to several news outlets citing multiple sources, the rare – but not unprecedented – occasion was carried out with the approval of Cairo’s government and was meant to send a message to Tehran.

A few days later, Israeli military spokesperson Hidai Zilberman addressed the naval maneuver in an interview to a Saudi news site, noting that “Israeli submarines can sail everywhere” and urging Iran not to escalate the volatile situation.

“This isn’t the first time the navy has crossed the canal, so let’s not make too much of this. But yes, this was definitely meant for Iranian consumption,” a former commander within the Israeli submarine unit disclosed.

On Wednesday, US President Donald Trump joined the fray himself, responding to a reported Iranian attack on the American diplomatic compound in Iraq with a series of direct threats at the ayatollah regime.

 “Our embassy in Baghdad got hit… by several rockets… guess where they were from: IRAN,” Trump tweeted. “Now we hear chatter of additional attacks against Americans in Iraq. Some friendly health advice to Iran: If one American is killed, I will hold Iran responsible. Think it over.”

Precisely one month ago, Iran’s top nuclear official Mohsen Fakhrizadeh was assassinated on the outskirts of Tehran, in an ambush blamed by Iranian security authorities on Israel. In recent years, top officials within the Republic’s nuclear program, as well as its most senior military commanders, have been the target of successful strikes by Israel and the US.

The most noticeable of these was the January killing of Qasem Soleimani, commander of the Revolutionary Guard’s elite Quds force, in an American drone attack in a Baghdad airport.

“The main reason for the current tension between the US and Iran is the remaining time [President] Trump has in the White House,” Prof. Eytan Gilboa, an expert on US policy in the Middle East at Bar-Ilan University’s Begin-Sadat Center for Strategic Studies, informed.

“There are three more weeks, and Trump is known for his unexpected nature of decisions,” Gilboa notes, adding: “I would give a very low probability to an initiated American or Israeli attack onn Iran. But with Trump - you never know. A small incident can develop into war.”

President-elect Joe Biden has in recent months stated he plans on rejoining the Joint Comprehensive Plan of Action, which was reached between Iran, the five permanent UN Security Council members and Germany in 2015.

The deal called for the winding down of Iran’s nuclear aspirations and efforts in return for a lifting of sanctions by Europe and Washington.

In May 2018, President Trump pulled out of the pact and embarked on his ‘maximum pressure’ strategy of imposing crippling economic sanctions on Iranian individuals and institutions. Tehran responded by restarting its uranium enrichment program several months after Trump’s announcement.

Following Biden’s victory in the November presidential elections, Iran’s top officials have repeatedly insisted they will refuse to renegotiate the JCPOA and will not consider reducing the Republic’s military involvement in other arenas in the Middle East, two demands Biden’s incoming team has hinted it will present in future talks.

“What we have now is psychological warfare and an exchange of messages, both for immediate military purposes and for the post-Trump diplomacy,” says Gilboa, who in the past has served as senior adviser to Israel’s Foreign Ministry and prime minister.

“Biden will eventually have to articulate a policy and decide which, if any, of the Iranian preconditions – removal of sanctions, the return to the unchanged 2015 deal, the freezing of the Gulf normalization process with Israel – he’ll accept.”

Another factor that may directly affect the Tehran-Washington-Jerusalem relationship in the coming months is the 2021 presidential election in Iran.

“Those are critical,” Gilboa stresses. “We’ve seen in the past how domestic events influenced Iran’s foreign policy,” he said.

India trying to maintain its hegemony in Indian Ocean Region

Lately, Indian Ocean Region (IOR) has become a major point of conflict between India and China, as India considers Indian Ocean its backyard and aspires to become the dominant power in the region. The Chinese presence in the Indian Ocean is countering its ambitions to establish hegemony in the region.

The Indian attitude has put it in confrontation with China and the countries that support the Chinese presence in the region for economic and security interests. The clash of interests and competition among the major stakeholders is making the IOR a highly volatile region, in turn, affecting economic and trade activities conducted through the Indian Ocean.

To safeguard its interest, India has negotiated several agreements with different littoral states of the Indian Ocean, primarily aimed at obtaining military access to their bases. Recently India’s National Security Advisor Ajit Doval attended a trilateral Maritime Security Meeting between India-Sri-Lanka and Maldives. The trilateral maritime security meeting was held to discuss issues relating to the security situation in the IOR. The meeting was significant because India holds a massive influence on both of these South Asian island states. However, the nature of this relationship has been full of ups and downs.

In the past, both Sri-Lanka and Maldives had maritime security relations with China, which paved the way for Chinese naval presence in the region. Since India is not in a position to counter China on its own, it is following two different strategies: 1) alliance and security partnerships with countries of the IOR and 2) gaining extra-regional powers that hold significant influence in the Indian Ocean most notably the US.

India has also made agreements with Indonesia to access strategically located deep sea Sabang Port and Oman’s Damuq Port. It is also negotiating with Bahrain to formalize maritime security partnership.

India has significantly enhanced its strategic partnership with extra-regional powers as well. In this regard, its partnership with the US, Australia, and Japan under “Quad” is quite notable. India has signed various logistic cooperation agreements with France and the US separately. These agreements allow the Indian naval forces to access the US military base in Diego Gracia and the French base in the Reunion Island.

The western countries and the US in particular consider the growing Chinese influence a threat to their shared common interests. Therefore, India has been designated as a balancer by the US that would serve their mutually beneficial interests. The US has signed several strategic agreements such as LEMOA, COMCASA, and BECA with India that would significantly enhance their military cooperation. Also, France has proposed the “Paris-New Delhi-Canberra Axis” in the newly created “Indo-Pacific” region.

To implement these partnerships into something physical and concrete India has been rapidly modernizing its naval forces. Over the next decade, India has planned to invest an additional US$51 billion to build surface ships and submarines for its Navy. India also intends to expand its indigenous ship industry to a worth of US$5 trillion by 2025. Indian Navy has built nearly 140 naval warships. These include; an aircraft carrier, nuclear-capable submarines, attack submarines. Other than these, some 240 aircraft and UAVs have also been built. Recently, the Indian Navy has acquired two predatory drones on lease from the US. These drones would be used for surveillance in the Indian Ocean and the Ladakh Border.

India is also investing heavily in anti-submarine warfare. It has recently bought weaponry worth US$155 million from the US. These include; AGM-84L Harpoon Block II air-launched missiles, MK 54 lightweight torpedoes, and P-81 maritime patrol aircraft. These developments indicate the Indian pursuit of a naval dominance strategy. Furthermore, this also comprehends how India is exploring new options for naval dominance.

The approach of global powers specifically the US to empower India as a balancer against China would likely amplify an arms race in the region. This would ultimately affect the economic and security interests of small powers in the region. It would become more difficult for the regional states to accept India as the sole security guarantor vis-à-vis China in the IOR because of the adverse relations.

Israel warns about Iranian retaliation likely to come from Iraq or Yemen

Israel is monitoring Tehran’s movement in the region and expects that an Iranian attack could come from Iraq and Yemen, Israel Defense Forces (IDF) Spokesman Brig.-Gen. Hidai Zilberman told the Saudi news website Elaph. 

He talked about Iranian threat and the tactics deployed by the IDF in order to respond to the threat, which he said is likely to arise from Iraq and Yemen.

The Spokesman referred to Iraq and Yemen as Iran’s second circle after Lebanon and Syria, stressing the first circle is in proxy conflict with Israel, and said that Israel has been monitoring the situation in both countries closely.

Zilberman stressed that Iran has developed a wide range of capabilities in the area – and specifically in Iraq and Yemen – that include advanced drones and remote-guided missiles, which they manage to operate without detection, indicating “a great Iranian ability in this area.”

He stressed that everyone should be on high alert regarding the Iranian threat, which he described as a “powder keg liable to explode,” considering the many blows Iran has received in the past year without being able to properly respond.

These include the assassination of Maj.-Gen. Qassem Soleimani, its sites continuously being targeted in Syria, the mysterious explosions in several of its nuclear facilities, the assassination of its top nuclear scientist Mohsen Fakhrizadeh, international sanctions and the novel coronavirus pandemic, which has had a devastating effect on the country.

Nearing the one-year mark since the assassination of Soleimani that took place on 3rd January 2020, Zilberman noted that Iran may use the occasion to launch an offensive against Israel or the US, which are considered one entity in Iran’s eyes.

Asked about the incident of an Israeli Navy submarine being spotted crossing the Suez Canal earlier this week, Zilberman said he could not confirm the report but noted that the IDF operates freely in the Middle East and that Israeli submarines sail to “different places, far and near.”

Addressing various unprecedented recent operations attributed to the IDF, Zilberman said he considers 2020 a year of “security par excellence for the State of Israel.”

In this regard, he noted that the Jewish state has proven its ability to carry out targeted and smart operations, considering that the IDF has led more operations in the past year than usual and has received close to no response.

He added that Israel has no intention of stopping its efforts of preventing Iran from taking hold of areas in Syria and Lebanon, indicating that the extended array of anti-aircraft systems deployed in Syria is no obstacle for the IDF.

Asked about Israel’s involvement in Lebanon and the recent rising tension with Hezbollah, Zilberman avoided giving a direct answer but said that Israel knows about the current efforts being undertaken by Hezbollah and will know how to neutralize any weapon or technology of the terrorist group – by military means or otherwise.

Regarding recent cyberattacks carried out against Israel by Iranian hacker groups, Zilberman admitted that Iranian efforts on this front have increased and have succeeded somewhat – explaining that the Iranian hackers usually target civilian companies that work with the military – but stressed that the damage was insignificant. He did, however, hint at the possibility that 2021 will see even more attacks of this kind, as cyberattack warfare replaces the modern battlefield.

“Any calculations known to us today could change for an unknown reason,” Zilberman told Elaph when asked about a looming war, adding that the current echelon leading the IDF is innovative in its thinking about the future and its unknown threats, and is working hard to ensure that Israel will always be prepared.

Earlier, IDF Chief of Staff Lt.-Gen. Aviv Kochavi addressed the Iranian threat during a ceremony for exemplary soldiers, saying that Iran will pay a heavy price if any Israeli is targeted.

“We are hearing more and more threats against Israel coming from Iran,” he said. “If Iran and its partners... attack the State of Israel, they will [pay] a heavy price... I am simplifying things and describing the situation to our enemies as it is,” he added. “Our retaliation plans are prepared, and they have been practiced.”

Will US President Trump make the world safer or more dangerous in his remaining days in power?

It is no secret that Donald Trump, President United States had asked for military options for attacking Iran and that Israel has been preparing for such an eventuality. It is the collective responsibility of all to examine the possibility of the US or joint US-Israel attack on Iran and its consequences.

There is absolutely no justification for such an attack, but that is no guarantee that it won’t happen. It needs to be emphasized that none of this would be happening if the Trump administration had not taken the reckless and destructive step of reneging on the JCPOA and launching an economic war on Iran. Whatever adversities the world may face only the Donald Trump would be held responsible for that.

When Trump ordered the assassination of Soleimani in January 2020, administration officials eventually lined up behind the excuse that it was intended to “restore deterrence” against rocket attacks from Iranian-backed Iraqi militias. Even though these attacks have continued, throughout the year, the US administration is back to issuing of threats of military action in response to attacks that would not be happening if it were not for the president’s own reckless actions. As the anniversary of the Soleimani assassination approaches, the administration is once again drifting towards an avoidable and unnecessary conflict.

Were it not for the president’s “maximum pressure” campaign, the US forces in Iraq would have faced far fewer risks than they do today, and conflict between the two governments would have been less intense. Had it not been for the president’s decision to order the illegal and provocative attack that killed Soleimani and an Iraqi militia leader, tensions between the US and Iran would not be as great as they are now. Trump’s approach to Iran for the last two and a half years has been to pick a fight and then blame the other side for responding to his provocations. Far from deterring attacks from Iranian-backed militias and the Iranian military itself, the Trump administration has been provoking and inviting them. It is mostly a matter of luck that this has not yet triggered a larger conflict.

For its part, the Israeli government is also raising the temperature by sending one of its submarines through the Suez Canal to signal its readiness to respond to retaliation for its murder of Iranian nuclear scientist Mohsen Fakhrizadeh. An Israeli submarine has embarked for the Persian Gulf in possible preparation for any Iranian retaliation over the November assassination of a senior Iranian nuclear scientist, Mohsen Fakhrizadeh, Israeli media reported.

The above-water, fully visible Israeli deployment into the Suez Canal and then the Red Sea was a rare move that was reportedly carried out with the acquiescence of Egyptian authorities and was seen as a clear warning to Iran that Israel was preparing for battle as hostilities continue to rise.

The deployment of the Israeli submarine is described as a “message of deterrence,” but it is in fact the result of an ill-advised and illegal attack inside Iran. Had the Israelis not carried out a terrorist attack on Iranian soil, they would not now be worried about possible retaliation. This gets at a basic problem with the hawkish framing of our news coverage related to Iran and the constant misuse of the concept of deterrence by both the US and Israeli governments.

When hawks in the US and Israeli governments talk about “restoring deterrence,” what they really mean is that they want to commit acts of aggression but present them as defensive actions. Blowing up Soleimani had nothing to do with deterring future attacks, and one can see that it has failed to deter them. Murdering Fakhrizadeh definitely had nothing to do with deterring anything. It was just a gratuitous killing that the Israel government did because they could. Now both the US and Israel find that they have to make additional shows of force and issue new threats to ward off possible responses to these earlier aggressive acts. Instead of making them more secure, these aggressive acts have exposed Americans and Israelis to greater risks than they faced earlier on.

Iran non oil trade reported at US$52 billion in 9 months

The value of Iran’s non-oil trade during the first nine months of the current Iranian calendar year (March-December 2020) was reported at US$52 billion by the Head of Islamic Republic of Iran Customs Administration (IRICA).

The total volume of the country’s non-oil trade was 110 million tons during the period under review, out of that 85.2 million tons were exported commodities and about 25 million tons were imported goods, Informed Mehdi Mir Ashrafi.

The official put the total value of the imports into the country during the said time at US$26.8 billion, while the value of exports was reported to be US$25.1 billion.

According to Mir-Ashrafi, 17.5 million tons of the imported commodities into the country in the period under review were basic goods, accounting for the lion's share of the imports in terms of weight.

Iran's top five non-oil export destinations during this period were China with US$6.4 billion worth of exports, Iraq with US$5.9 billion, the United Arab Emirates (UAE) with over US$3.3 billion, Turkey with US$1.8 billion, and Afghanistan with US$1.7 billion.

The country’s top five sources of imports during this period were China with US$7 billion, the UAE with US$6.3 billion, Turkey with US$3 billion, India with US$1.6 billion and Germany with US$1.6 billion worth of imports.

Some 5.2 million tons of commodities were also transited to other countries through Iran, 10.9 percent less than the figure for the same period in the previous year, Mir-Ashrafi said.

Like all other countries around the world, Iran’s trade with its foreign partners has been affected by the coronavirus pandemic. However, the situation is getting back to normal and the country’s trade is reaching its pre-pandemic levels.

Tehran and Karachi hold joint webinar on trade expansion

Recently, Tehran Chamber of Commerce, Industries, Mines, and Agriculture (TCCIMA), and Karachi Chamber of Commerce and Industry (KCCI) held an Iran-Pakistan business forum via webinar.

During the online event, the two sides discussed expansion of economic ties and expressed readiness for the implementation of a free trade agreement between the two countries.

In this regard, Pakistan’s Ambassador to Tehran, Rahim Hayat Qureshi talked about his country’s efforts to finalize the free trade agreement. TCCIMA Head, Masoud Khansari called the agreement an important step towards the US$3 billion goal in trade relations between the two countries.

The webinar presented an opportunity to the two countries’ business owners active in various areas including energy, tourism, transportation, food, agriculture, pharmaceutical, health, clothing, textile, and leather to share ideas and explore collaborative capacities.

Speaking in the event, Khansari pointed to the barter trade as a good solution for the current problems in the way of expanding the trade relations between the two sides and noted that the two sides are working on the matter.

He announced the formation of a joint working group between the private sectors of the two countries to identify obstacles and challenges in the way of trade between the two countries and to eliminate them.

“By establishing dialogue and sharing solutions by the private sectors of the two countries, achieving the US$3 billion trade will be possible,” Khansari stressed.

Strengthening the transport infrastructure between the two countries, using the two countries’ national currencies for trade, forming joint ventures for establishing industrial parks in border areas, and finally establishing joint banks were among the solutions offered by the head of TCCIMA for boosting trade between the two sides.

Referring to the opening of the new border between Iran and Pakistan last week, the Pakistani ambassador for his part noted that the governments of the two countries are working to establish more common borders and border markets in the future.

Pakistan has a relatively large consumer market with a population of over 200 million. According to the World Trade Organization, imports constitute over 66 percent of Pakistan’s trade.

Expansion of trade with Pakistan, and boosting exports to this neighboring country is one of Iran's priorities.

Is China trying to dominate the Indian Ocean?

Looking back, a major step for China was its first deployment of warships to the Gulf of Aden to join an international counter-piracy effort. The first trio of warships arrived in December 2008, and a task force has seen a constant presence there ever since

Today it is legally indisputable that the high seas belong to all. This means China`s navy has as much right to ply the Indian Ocean as any other nation, even though it might make countries like India feel a creeping sense of dread. Likewise, it is a well-established fact the People`s Liberation Army Navy (PLAN) has been sailing in the Indian Ocean far more frequently in recent years, compounded by fears that Beijing is seeking to establish new naval bases on the periphery of this ocean. 

Yet, is China trying to dominate the Indian Ocean? Looking back, a major step for China was its first deployment of warships to the Gulf of Aden to join an international counter-piracy effort. The first trio of warships arrived in December 2008, and a task force has seen a constant presence there ever since.

Chinese warships remain despite pirate attacks disappearing almost entirely in the area. However, such assets have also been used for non-combatant evacuation operations in Yemen and Libya, plus ships are available for humanitarian assistance operations. China is understandably concerned about protecting its sea lanes, the conduits that bring in raw materials (9.3 million barrels of oil per day, with 44% of Chinese oil imports coming from the Middle East in 2018) and which simultaneously deliver finished products to Africa and Europe (20% of China`s GDP comes from exports). 

Strategists call these sea lines of communication (SLOC), and Beijing wants to protect them from threats in peacetime and against hostile powers in times of tension or war. China`s economic investments continue to grow, as does the diasporas of its citizens. The Middle East and Africa comprise an essential part of Chairman Xi Jinping`s flagship Belt and Road Initiative, and its importance is seen in the fact that Xi has visited the region 18 times since he gained power in 2012.

Furthermore, there are particular chokepoints along these SLOCs, locations where shipping is funneled and becomes particularly vulnerable. The most obvious of these is the Strait of Malacca between Singapore, Malaysia and Indonesia. Other chokepoints are the Strait of Hormuz, Bab-el-Mandab (the Horn of Africa) and Suez Canal. China`s interest in the Indian Ocean region is a product of growing commercial interests, with the PLAN being handed the task of safeguarding them. 

This is not a new concern, for Beijing`s 2015 Defense White Paper stated that "with the growth of China`s national interests, its national security is more vulnerable to international and regional turmoil...and the security of overseas interests concerning energy and resources, strategic sea lines of communication, as well as institutions, personnel and assets abroad, has become an imminent issue".

In fact, three critical factors affect how China can project power, protect its SLOCs and keep chokepoints open. The PLA is acutely aware of all three, and much effort is devoted to negating current disadvantages.

First is the PLAN`s rather modest presence in the Indian Ocean, especially compared to powers like India or the USA. 

Second is the PLAN`s limited air defense and anti-submarine warfare capacity. Third is China`s rather limited logistics/sustainment infrastructure along the Indian Ocean`s periphery. If China is to dominate the Indian Ocean, if that is its aim, it must address each of the above weaknesses. Interestingly, the US Naval War College recently published a report addressing the PLAN`s utilization of the Indian Ocean. 

Authored by Jeffrey Becker, the report entitled Securing China`s Lifelines across the Indian Ocean provides insights into Chinese ambitions. It summarized China`s predicament as follows: "To address these challenges, Beijing has already undertaken a series of initiatives, including expanding the capabilities of China`s base in Djibouti and leveraging the nation`s extensive commercial shipping fleet to provide logistics support. Evidence suggests that China may also be pursuing other policy options as well, such as increasing the number of advanced PLAN assets deployed to the region and establishing additional overseas military facilities."Becker admitted, "However, while the PLAN`s ability to operate in the Indian Ocean has improved considerably, its ability to project power into the region, and defend access to SLOCs and chokepoints in times of crisis, remains limited."

Addressing each of the three factors in turn, the first was China`s modest naval presence in the Indian Ocean, with just two warships and a support vessel on permanent rotation to the Gulf of Aden. Other warships may occasionally make passage or conduct exercises, plus it is estimated that Chinese submarines perform just two forays into the Indian Ocean annually on average.

Nonetheless, Chinese naval exercises west of the Malacca Strait (but still in the eastern part of the Indian Ocean) are becoming more common. These have two advantages, familiarizing crews with the area, and normalizing the appearance of PLAN ships.

It is certainly possible for the PLAN to deploy more ships there, for it is the largest navy in the world in terms of hull numbers. Becker quoted one source suggesting "that China is already capable of maintaining about 18 ships on station fulltime in the Indian Ocean, given the PLAN`s current force posture".

Senior Captain Liang Fang at China`s National Defense University has written papers advocating that the PLAN deploy aircraft carriers there to protect SLOCs. A Chinese carrier group operating around the Horn of Africa would certainly make a bold statement about Chinese power projection capabilities, and could provide leverage over nearby countries.

However, it is rare for Chinese experts to directly discuss any concept of a dedicated PLAN Indian Ocean squadron. The second aforementioned factor is the PLAN`s limited air defense and anti-submarine warfare capacity. 

Close to home, Chinese warships enjoy support from land-based missiles and aircraft, plus a heavy concentration of submarines, but these are luxuries not afforded in distant seas. Such support would be absent in the Indian Ocean, plus Chinese assets would be within land-based strike range of potential adversaries like India. 

The latter, especially in the Andaman and Nicobar Islands, is boosting its ability to detect and track foreign submarines and surface ships. The defensive capacity of Chinese warships is improving, though, The Type 052D destroyer, for example, has 64 vertical-launch missile cells that can fire missiles against multiple enemy aircraft. 

However, within their first five years of service since 2014, none had deployed to the Gulf of Aden. Significantly, their first foray with a Gulf of Aden task force occurred in May 2019. Moving on, the third factor is China`s limited logistics support infrastructure in the Indian Ocean region. China formally opened a shore-based base in Djibouti on 1^st August 2017. 

China is not the only country with a military presence in Djibouti, for France, Italy, Japan and the USA all have military facilities there, with the Saudis to build one too. China has been expanding the pier at its Djibouti military base in recent weeks, sufficient to host at least a four-ship flotilla, including the large Type 901 auxiliary ship. 

The future deployment of more advanced weaponry to Djibouti - such as surface-to-air missiles or anti-submarine aircraft - would indicate more urgent Chinese intent. Already, one of six berths at Djibouti`s commercial Doraleh Multipurpose Port is reserved for use by the PLA.

Becker commented on auxiliary ships: "While these ships could be used to support other vessels in the fleet, given their limited numbers, and the fact that they were designed to support the PLAN`s future carrier strike groups, expanding facilities in Djibouti to support Type 901s may indicate that the base could also host a PLAN carrier strike group in the future. Indeed, the size and nature of the facilities being built at Djibouti suggest that the PLAN is establishing the capability to support a carrier strike group from its first overseas base should it so chose.

"China is well aware of the advantages that new regional logistics bases would bring, and Pakistan is usually touted as the most likely location. Becker noted, though, "...At least in the near term, the likelihood of the PLAN obtaining access to a military facility which it could use during a conflict remains remote, as many Indian Ocean region countries seek to maintain a balance in their relations between regional powers, and appear unlikely to abandon this hedging approach."

One Chinese scholar, Gao Wensheng of Tianjin Normal University, encourages setting up such Chinese "strategic fulcrum ports" to enhance logistics support in the region. This topic, often referred to as the "string of pearls theory", has generated a lot of heat and noise. Such bases along the coast of the Indian Ocean - whether dual use or purely military - would undeniably greatly aid the PLAN`s ability to operate so far from home.

Becker assessed, "Over the past decade, the PLAN has proven capable of sustaining small groups of vessels in the Indian Ocean for long periods of time. However, though a three-ship taskforce is sufficient for the PLAN`s counter-piracy needs in peacetime, defending access to Indian Ocean SLOCs in a conflict would require a much larger and more sustained force, and the PLAN has only a limited number of replenishment ships capable of supporting far-seas operations."

A shortage of replenishment ships (currently eight Type 903/903A and two Type 901 vessels) could force China to utilize its massive commercial fleet, one of the largest in the world.

Becker indeed noted: "Beijing has already taken steps so that the fleet can better support PLAN activities. For example, it has promulgated regulations requiring certain civilian vessels - including roll-on/roll-off vessels, tankers and container ships - be built to military specifications, theoretically facilitating their future use by the navy with few if any modifications. 

In September 2016, China enacted the Law of the People`s Republic of China on National Defense Transportation, which improves the process for military requisition of civilian transportation assets during wartime, natural disasters, emergencies or `special circumstances`, both domestically and abroad."Chinese commercial vessels have taken part in maritime exercises, meaning that an entity such as COSCO could easily be called upon to support the PLAN in the Indian Ocean to augment naval capabilities. 

Furthermore, Chinese state-owned companies own or operate port facilities around the region (including Djibouti, Egypt, Malaysia, Pakistan, Singapore, Sri Lanka and the UAE), and they could provide some degree of sustainment.

In line with other analysis, Becker concluded: "...Other than its base in Djibouti, the PLAN does not, at present, appear to have arrangements with any other country in the region that would allow it to preposition specialized military equipment or technicians required to use that equipment, even in port facilities owned or operated by Chinese state-owned firms. Host governments whose ports do service PLAN vessels during a conflict, or allow the PLA to preposition military equipment on their territory, could possibly be dragged into the conflict as a co-belligerent."

Yet China has slightly improved its posture by developing more comprehensive naval facilities farther south within China - including an aircraft carrier base at Yulin on Hainan Island, thus speeding up the PLAN`s ability to deploy assets to the Indian Ocean. China could also surge platforms from reclaimed reef bases in the South China Sea, as they can harbor ships and accommodate aircraft such as fighters, maritime patrol and aerial refueling types. 

This would give the PLA a quicker response to any contingency in the Malacca Strait, for instance. It would make sense for China to establish a second overseas military base at the eastern end of the Indian Ocean, to help defend access to the region. 

For many years, locations such as Myanmar have been discussed. Or even farther east, China`s military relationship with Phnom Penh has become quite exclusive in recent years. In 2019 there were media reports that China may have forged an agreement for the PLAN to use a Cambodian naval base, plus a large and mysterious airport is being constructed in Cambodia. 

Speculation is rife that the PLA could one day use the latter, even though Cambodia is some 1,000km from the Malacca Strait. Becker suggested another possibility, that Beijing may simply be content to emulate the Soviet Union`s past presence in the Indian Ocean. The Cold War power sought only limited SLOC protection and localized sea denial, as opposed to outright sea control. This could represent an achievable solution for China too.

Israel saves Pakistan face

According a Reuters news, Israeli Regional Cooperation Minister, Ofir Akunis said there were two main candidate countries to become the next to move towards normal ties with Israel. He did not name either but said one is in the Gulf and could be Oman but would not be Saudi Arabia. The other, further to the east, is a “Muslim country that is not small” but is not Pakistan, he said.

Asked if a fifth country could sign up before Trump steps down on 20th January 2021, Ofir Akunis told Israel’s Ynet TV, “We are working in that direction.”

 “I believe ... there will be an American announcement about another country that is going public with the normalization of relations with Israel and, in essence, with the infrastructure for an accord — a peace accord,” he said.

Israel is working towards formalizing relations with a fifth Muslim country, possibly in Asia, during US President Donald Trump’s term, an Israeli cabinet minister said on Wednesday. The White House has brokered rapprochements bet­ween Israel and the UAE, Bahrain, Sudan and Morocco this year.

Indonesia, the most populous Muslim country, said last week it would not recognize Israel as long as Palestinian statehood demands remain unmet. Malaysia has signalled a similar policy.

“Malaysia’s firm stance on the Palestinian issue will not change,” Deputy Foreign Minister Kamarudin Jaffar told the country’s senate on Wednesday, adding that Kuala Lumpur would not interfere in other nations’ decisions on Israel.

In Dhaka, a foreign ministry official said Bangladesh was not interested in establishing diplomatic ties with Israel. “Our position remains the same,” he reiterated.

Oman has praised the US-brokered diplomatic drive but has not commented on its own prospects of forging Israel ties.

Israel heading to fresh polls

The Knesset dissolved automatically at midnight Tuesday, setting a 23^rd March 2021 date for elections amid mutual recriminations between Prime Minister Benjamin Netanyahu and Alternate Prime Minister Benny Gantz.

Netanyahu and Gantz blamed each other for not finding a way to keep their government going. Likud and Blue and White had reached an agreement to extend the deadline for passing the state budget and preventing early elections. But Gantz issued new demands, and then rebels in both parties prevented the bill from passing in dramatic fashion.

 “It is no secret that the Likud and I did not want to go to elections,” Netanyahu said in a Knesset press conference. “Israel is going to elections due to internal fights in Blue and White.”

Netanyahu said he had agreed to the rotation in the Prime Minister’s Office before Blue and White reneged on their deal.

Blue and White responded by shifting the blame to Netanyahu, saying: “A man under three indictments is dragging Israel to elections for a fourth time. If there was no trial, there would be a budget and no elections.”

Polls broadcast on Tuesday night found that the election will be devastating for Blue and White. A Kantar Institute poll broadcast on KAN News predicted six mandates for the party. A Midgam poll on Channel 12 predicted five seats, and if Tel Aviv Mayor Ron Huldai forms a party, only four.

Both polls gave the Likud a significant majority over the New Hope Party of former Likud minister Gideon Sa’ar, Yamina and Yesh Atid. Sa’ar has risen in polls that ask who is most fit to be prime minister. In the KAN poll, 39% said Netanyahu was most fit for the job, and 36% said Sa’ar.

The Likud took action on Tuesday to deprive Sa’ar’s party of key state funding. Sa’ar called the Likud’s steps brutal and expressed confidence that the move would boomerang against Netanyahu’s party.

Sa’ar played an active role in preventing the deadline for passing the budget from being extended and the time until another election from being prolonged. His confidante Likud MK Michal Shir joined Blue and White MKs Ram Shefa, Miki Haimovich and Asaf Zamir in voting against the early election prevention bill.

Shir and Shefa waited in the Knesset parking lot before surprising their colleagues by voting against the bill and ensuring its defeat in a 49-47 vote.

Shir submitted her resignation letter to Knesset Speaker Yariv Levin on Tuesday. She said she was proud to vote to end a dysfunctional government and that she would be joining New Hope.

When her resignation takes effect on Thursday, Shir will be replaced by the next candidate on the Likud list, Shevah Stern, who was chosen for a slot on the list reserved for a candidate from Judea and Samaria.

Likud MK Sharren Haskel, who refused to come to the vote, has not said when and if she will quit, but she is also expected to join the new party. If Haskel quits, she will be replaced in the Knesset by former minister Ayoub Kara.

Meanwhile, the state budgets, which were the technical reasons for the election, were advanced in the cabinet and Knesset but not passed into law.

“Out of a sense of responsibility to the Israeli people, I have decided that we will approve legislation that will enable a rolling budget for 2021 so that the country can minimally function during election season,” Gantz said. “The prime minister and finance minister have been wildly irresponsible, denying the country a budget for six months in flagrant violation of their commitment and all out of narrow, self-serving personal considerations.”