US warns of preemptive attack against forces allegedly backed by Iran

The predictable result of the Trump administration’s reckless bluster, escalation and miscalculation in the Middle East is that the super power is now hurtling closer to an unauthorized war with Iran. America has the surprising audacity of attributing to Iran the protests of the Iraqi people against (Washington’s) savage killing of at least 25 Iraqis.

The embassy incident came seven years after the 2012 attack by armed militants on the US diplomatic compound in Benghazi, Libya, that resulted in the death of the US Ambassador and three other Americans and led to multiple congressional investigations.

The unprecedented attack on an American diplomatic mission in Iraq marked a sharp escalation of the proxy conflict between the United States and Iran - both influential players in the country - and plunged US relations with Iraq to their worst level in years.

Mark Esper, US Defense Secretary said on Thursday that there were indications Iran or the forces it backs may be planning additional attacks and said it was possible the United States might have to take preemptive action to protect American lives.

“There are some indications out there that they may be planning additional attacks, that is nothing new ... we’ve seen this for two or three months now,” Esper told reporters.

“If that happens then we will act and by the way, if we get word of attacks or some type indication, we will take preemptive action as well to protect American forces to protect American lives.”

Iranian-backed demonstrators who hurled rocks at the U.S. embassy in two days of protests withdrew on Wednesday after Washington dispatched extra troops.

Donald Trump, US President, who faces a re-election campaign in 2020, accused Iran of orchestrating the violence. He threatened on Tuesday to retaliate against Iran but said later he did not want war.

The unrest outside the US embassy in Baghdad followed US air raids on Sunday against bases of the Tehran-backed Kataib Hezbollah group. Washington said the air strikes, which killed 25 people, were in retaliation for missile attacks that killed a US contractor in northern Iraq last week.

The protests marked a new turn in the shadow war between Washington and Tehran playing out across the Middle East.

“The game has changed and we are prepared to do what is necessary to defend our personnel and our interests and our partners in the region,” Esper said.

During the same press briefing, Chairman of the Joint Chiefs of Staff Mark Milley said there had been a sustained campaign by Kataib Hezbollah against US personnel since at least October and the missile attack in northern Iraq was designed to kill.

“Thirty-one rockets aren’t designed as a warning shot, that is designed to inflict damage and kill,” Milley said.

Motives behind US air strikes in Iraq and Syria

The fighter jets of United States targeted several bases of the Iraqi popular forces of Hashd al-Shaabi at border with Syria on Sunday evening. In a statement, the US defense secretary confirmed the attacks. Now the question is, which objectives had the US wanted to achieve from the attacks?

There is growing perception that the US was not comfortable with the consolidation of relationship between Iraq and Syria, especially in security and economic fields. Therefore, Washington wanted to seal Iraq-Syria common borders and passageways by targeting military positions in Iraq and Syria as well as providing support for the existing terrorists and creating fresh terrorist group.

Keeping the terrorist groups protected and providing backup for them seems to be the main objective of the US  after a number of reports hinted towards relocation of terrorists from Syria into Iraq or vice versa. In the meantime, the US has raided the Iraqi army several times to provide support for the terrorist groups in the country. 

Certainly, weakening Iraq and turning it into a crisis-hit country is aimed at providing the ground for the US to impose its will on Baghdad. Weakening the Iraqi popular forces and damaging relations and cooperation between the country’s army and the popular forces are also among the main objectives of such plots. 

Other dimensions of the US recent plot against Iraq can be mentioned as spreading chaos and turning peaceful protests of the Iraqis into violence, destabilizing Iraq’s political situation by interfering in the trend of forming the country’s new government, weakening Iraq’s security forces through conducting attacks on the Army centers and Hashd al-Shaabi’s bases and cutting Iraq’s ties with its neighboring countries including with Iran.
The new US plot is also aimed at deviating public opinion from critical situation of the Zionist regime of Israel as well as appeasing the Zionist lobby to continue supporting Donald Trump who is facing the congress impeachment.

By acts, the US proves it is the number one supporter of terrorism. Washington’s claim of campaign against terrorism is only a deception that is why their claimed military coalitions in the Persian Gulf and in the Bab al-Mandab Strait have brought about nothing but enhancing terrorism.   

The US has not been a savior but it has been disruptor of the region’s security and stability. The secret trips of the US officials to Iraq have certainly roots in their fear from the Iraqis’ rage against Americans’ crisis-making behaviors.

Widespread supports of popular and political groups as well as the country’s religious authorities for Hashd al-Shaabi against the US aggressive policies shows nationwide trust of Iraqis in the resistance forces which in turn shows failure of the White House’s anti-resistance project.  

Iran Russia China joint naval drill in Sea of Oman

Naval forces from Iran, Russia and China started a large-scale maritime exercise in the northern part of Indian Ocean and Sea of Oman on Friday, 27th December 2019.The joint exercise is being viewed by some analysts as a show of power and solidarity between Iran, China and Russia. The exercise, named “Marine Security Belt”, will last for four days and cover 17,000 square kilometers and consist of "various tactical exercises"

Earlier, speaking at a news conference on Wednesday, Iranian Armed Forces Brigadier General Abolfazl Shekarchi said it was important and vital that security should be established in Indian Ocean and Sea of Oman. Indian Ocean and Sea of Oman are among the world's key trade routes and many countries commute in the (two) regions and therefore establishing security there is important and vital, said Shekarchi.

Iranian Foreign Minister Mohammad Javad Zarif said on Friday that the joint military exercises show that Iran and its partners are committed to secure vital waterways. “Our joint military drills in Oman Sea/Indian Ocean with Russian and Chinese partners make clear our broader commitment to secure vital waterways,” Zarif added. Iran has been insisting that it is ready to work with its neighbors on the southern shores of the Persian Gulf to secure maritime trade in the region based on the Hormuz peace initiative. “Iran has long stated its readiness to work with its neighbors to secure the Persian Gulf.

Since the victory of the Islamic Revolution in Iran in 1979, it is the first time that the country has staged such a large-scale drill participated with two huge naval powers in the world. Certainly those countries share security, economic, political, and defense interests and try to restore collective security in the region. Reinvigoration of international maritime trade, countering piracy, exchange of information and experiences in various fields including maritime rescue and relief are among the main objectives of the drill.

Rear Admiral Tahani said peace, friendship and sustainable security under collective unity and cooperation are the main messages of the current naval drill. The message of this exercise is peace, friendship and lasting security through cooperation and unity … and its effect will be to show that Iran cannot be isolated.

China has sent a guided-missile destroyer to the four-day drills, which it called a "normal military exchange" between the three armed forces. It is not necessarily connected with the regional situation. China has close diplomatic, trade and energy ties with Iran, which has friendly ties with Russia.

Russia had sent three ships from its Baltic Fleet - a frigate, a tanker, and a rescue tug boat - to take part in the drills. It is believed that Russia is participating for the first time in such drills, being held in such a format.

The drills are being held at a time that the United States is resorting to every ploy to pressure Iran and isolate it in the world.  It sends a clear signal to the United States that the Iran issue should be addressed through negotiations based on the previous deal rather than military actions. The US should stop fanning the flames.

Certain quarters say that the drill was in response to recent US maneuvers with its regional ally Saudi Arabia. The trilateral drills are the first of its kind and being held at a time when Iran is facing unprecedented sanctions from the US. The joint drills are likely to be perceived as provocative by Washington. 

Divided Kuala Lumpur Summit

Contrary to the expectations of many Pakistanis, Prime Minister Imran Khan opted not to attend Kuala Lumpur Summit. The overwhelming perception is that that Khan decided to stay away from the Summit under the pressure of Saudi Arabia. It is no secret that the Kingdom has been extending help to the incumbent government to avert the economic crisis, ever since Khan came into power.

Reportedly, Khan had telephoned his Malaysian counterpart Mahathir bin Mohammad to express his regrets for not being able to attend the summit. He also conveyed the same to Turkish President Recep Tayyip Erdogan, who was also one of the driving forces behind the event.

It is worth noting that Pakistan was one of the first countries with whom Mahathir shared his plans for holding the summit, when he met Khan along with Erdogan on the sidelines of the UN General Assembly session in New York in September. Khan formally conveyed his acceptance of the invitation for attending the summit when deputy Foreign Minister of Malaysia called on him in Islamabad on 29th November.

Prior to the commencement of Summit, a statement issued by Malaysian Prime Minister’s Office saying, “Dr. Mahathir appreciates Prime Minister Imran Khan’s call to inform of his inability to attend the summit where the Pakistani leader was expected to speak and share his thoughts on the state of affairs of the Islamic world.”

There is a dire need to read the explanation put forward by Pakistan’s Foreign Minister, Shah Mehmood Qureshi. He confirmed that Saudi Arabia and the United Arab Emirates had concerns about the Kuala Lumpur Summit. They were worried that the event could cause fragmentation of Ummah and lead to setting up of another organization parallel to the existing Saudi-dominated Organization of Islamic Cooperation.

It is on record that prior to the commencement of Summit, Mahathir told reporters in Kuala Lumpur that Saudi King; Salman bin Abdul Aziz was averse to the Summit discussing issues facing the Muslims. Saudi King was of the view that the OIC should continue as the platform for discussing such matters.

In view of the reservations about the event, Qureshi said, it was decided that Pakistan would first attempt to bridge the gap between Riyadh and Kuala Lumpur and if that did not work there would be no participation in the Summit.

Foreign minister explained that Pakistan did attempt to patch up the differences and succeeded not only in getting invites for Saudis and Emiratis, but also convinced Mahathir to personally visit Riyadh and directly invite King Salman. Mahathir’s visit could not be scheduled because the dates proposed by Riyadh were not convenient for him to undertake the trip.

He also informed that Khan visited Saudi Arabia in an attempt to bringing Saudi Arabia and Malaysia closer, and not for getting a permission to attend the summit. Qureshi was of the view that by staying back, Pakistan had underscored its neutrality on the issue and conveyed that it was not inclined towards one side or the other.

According to media reports from the Malaysian capital, Mahathir and King Salman held a video conference to discuss Saudi reservations even after Pakistan had officially pulled out, but no common grounds could be found.

It was anticipated that two of the world's most outspoken leaders, Malaysia's Prime Minister Mahathir Mohamad and Turkey's President Tayyip Erdogan would be giving their views during the four-day summit. Iranian President Hassan Rouhani and Qatar's Emir Sheikh Tamim bin Hamid Al-Thani, two countries having tense relations with Saudi Arabia, were invited to attend the Summit.

Saudi Arabia was of the opinion that Summit was the wrong forum to discuss matters of importance to the world's 1.75 billion Muslims.  Saudi King Salman believed that such issues should be discussed through the Organization of Islamic Cooperation (OIC).

However, some analysts suspected the Kingdom feared being diplomatically isolated by regional rivals Iran, Qatar and Turkey. A quote of James Dorsey, a senior fellow at S Rajaratnam School of International Studies and Middle East Institute in Singapore just can’t be overlooked.

He said, “The issue is that you've got blocs. “You've got a Saudi-UAE bloc, Turkey-Qatari bloc, and Pakistan in the middle trying to hedge their bets.”

Defending the summit, Mahathir's office issued a statement saying there was no intention to create a “new bloc as alluded to by some of its critics”.

“In addition, the Summit is not a platform to discuss religion or religious affairs but specifically to address the state of affairs of the Muslim Ummah,” it said.

However, one just can’t ignore what Mahatir had told Reuters. He had expressed frustration with the OIC's inability to forge a united front and act decisively.

United States having inflicted hunger around the world faces the same fate

In July of 2013, Rose Aguilar wrote a wonderful article for al-Jazeera, discussing the dire hunger crisis prevailing in the United States. In her article, she brought back a memory of something people had long forgotten, an event that so outraged the American public that the government was temporarily forced to respond with more humane policies. That event was a 1968 CBS special hour-long documentary called Hunger in America, in which viewers literally watched a hospitalized child die of starvation. The then president, Nixon responded because the public outrage left him no choice, but Reagan quickly dismantled those improvements.

When Reagan came to power in 1980, there were 200 food banks in the US; today there are more than 40,000, all overwhelmed with demand and forced to ration their dispersals. Before 1980, one out of every 50 Americans was dependent on food stamps. Today, it is one out of four. Before Reagan, there were 10 million hungry Americans; today there are more than 50 million and the number is increasing with the passage of time.

A substantial part of the Great Transformation included not only tax cuts and other benefits for the wealthy, but a simultaneous massive reduction in budgets for social programs – in spite of the fact that Reagan and the secret government were creating the conditions that would desperately require those same social programs.
That 50 million hungry Americans today includes the 25% of all children in the US who go to sleep hungry every night. About 25% of the American population today cannot buy sufficient food to remain healthy, with most of these being hungry for at least three months during each year. It is so bad that many college students have resorted to what is called “dumpster-diving” – looking in garbage bins for edible food.

According to a WFP and FAO investigation, food shortages and food insecurity deteriorate in areas affected by conflict. The most critical situation is recorded in Yemen, plagued by wars and epidemics. Syria and Lebanon are also of concern. Food insecurity and famine in conflict-affected countries, especially in the Middle East, continue to worsen in the face of growing problems in the delivery and distribution of aid to the population.

The latest report prepared by the UN agencies focuses on food insecurity in 16 countries in the world: Afghanistan, Burundi, Central African Republic, Democratic Republic of Congo, Guinea-Bissau, Haiti, Iraq, Lebanon (Syrian refugees), Liberia, Mali, Somalia, South Sudan, Sudan, Syria, Ukraine and Yemen, in addition to the Lake Chad Basin. The joint FAP-WFP survey shows that in over half of these nations, a quarter or more of the population live in crisis situations or in levels of emergency regarding hunger.

Economically destroyed, socially unstable and now hungry, Venezuela is undergoing turbulent times. Known as “Saudi Arabia” of South America, today Venezuela more closely resembles Syria. Economically destroyed and socially unstable, the country is now fighting an ever more alarming specter hunger. In the slum of Petare in the metropolitan area of the capital, Caracas, refrigerators remain empty, supermarket queues grow longer and the necessity of procuring something to eat drives young people to violence. 

Many come together in armed gangs, plunder houses and shops, rob food from passersby and are paid in foodstuffs. Unsustainable inflation has caused prices to double week after week; today, nine out of 10 Venezuelans do not feel they have the sufficient resources to buy food. For some time now the government has been trying to remedy ‘Clap plan’, which distributes food to civilians. But this does not seem to be enough and hunger is now one of the greatest threats to Venezuela’s fragile national security.

Turmoil in China and Iran

From Hong Kong to Tehran to Buenos Aires, the world seems in turmoil. A question is getting louder, what is triggering global unrest. There is so much unrest throughout the world at any point that it would appear to be merely the normal chaos. However, a point is very clear reasons for turmoil are unique for each country and often multiple. China and Iran are very different places, each with its own geopolitical circumstances.

One of the conspiracy theories suggests single element that is common to all countries, economic chaos of 2008 that originated from the United States. More than a decade ago the international economic system got a jolt and the turmoil continues to date. The weakness in the global economy is magnified by the unsolved problems lingering since 2008. It is also evident that economic problems have transformed into political ones. Add to this the shift in US strategy, away from military interventions to economic confrontations. The shift in US strategy is affecting the global economic system in general abut China and Iran in particular.

Let the analysis begin with riots in Hong Kong. In 2008, China was a powerful exporter, but also dependent on exports for social stability. The financial collapse created a profound crisis. An economy built on efficient exporting staggers when its customers are unable to buy its goods. The export crisis compounded the financial crisis, as cash flow from exports contracted. This followed a series of purges designed officially to weed out corruption and unofficially to find scapegoats for China’s problems and to intimidate potential opposition. Chinese government promising prosperity started opting austerity. The purges were the beginning of a systematic repression in China that sought to retain Chinese economic dynamism without an equivalent political dynamism.

Things got worse when the United States, China’s biggest customer, imposed punitive tariffs on Chinese goods and demanded access to China’s markets. There was also an implied demand for political concessions. The pressure from the United States increased the pressure still present from 2008. It in turn intensified suppression. Chinese insecurity compelled the Communist Party to seek increased control over Hong Kong, with an extradition law that would permit China to extract Hong Kong citizens. This triggered the worst instability in Hong Kong.

Let us move from China to Iran, the two countries having no similarities. The 2008 crisis triggered a slowdown in consumption and therefore in production. In the long run, this inevitably caused major declines in the prices of commodities, the most important being crude oil. Iran continued to export despite economic sanctions. However, low oil prices weighed on it, causing pressure on the economy, and eventually restlessness in the society. As with China, the US imposed economic penalties on Iran for reasons that have little to do with the economy. Regardless, the effect of the global shift in oil pricing, coupled with intense economic pressure from the US, over the time generated intense unrest and government repression.

There has been unrest in countries in which the US has strategic interest. Lebanon, Argentina, Chile and others all went into crisis for idiosyncratic reasons – including an emerging global economic slowdown. In all these countries, there are political problems that do not derive from 2008 economic crisis but certainly by US pressure. In some, such as Lebanon, there are economic problems that are mostly caused by external forces.

According to some analysts, while no general theory of unrest seems plausible, a special theory gets credential. The countries most dependent on either industrial exports or the sale of industrial commodities were harmed the most, though some have recovered. The addition of US economic pressure as a tool of foreign policy has compounded this problem, generating unrest. The US pressure would not have been nearly as effective without 2008. It is now triggering internal political consequences that are threatening the ability of regimes to cope.

Iran faces a difficult time and the stakes are high, from potential war with the United States to reversal of its gains across the Middle East to future of its revolutionary state. It is a defining moment for Tehran – perhaps the most critical since the Iranian Revolution of 1979 that has been prompted by the Trump administration’s “maximum pressure” campaign of sanctions. On top of all protests in Iran, Iraq and Lebanon have also charged the atmosphere.

What’s clear is that the growing scale of the challenge makes it difficult for Iran to pursue its earlier approach toward mounting US pressure. It is also not clear how Tehran will respond to this historic test with more military escalation, diplomatic compromise – or a combination of both.

Diplomats in the Middle East argue that the United States has put itself in a good position to shape that choice. They argue Washington could take advantage of Iran’s increased difficulties by working more closely with European and Mideast allies to frame an offer that would ease sanctions but put in place a process that would block Iran’s path to a nuclear weapon and end its foreign policy of regional meddling.

However, that sounds like wishful thinking in the world of Washington’s distractions, transatlantic distrust and Iranian outrage. Trump administration officials are sanguine, arguing that at the very least the sanctions have cut deeply into the resources Iran can invest in its proxies. Protests at home and abroad are usefully soaking up regime energies.

History of protests in Iran spread over four decades

The protests of 1979 which led to return of religious cleric Ruhollah Khomeini to Iran and end to the rule of Shah Mohammad Reza Pahlavi still mesmerize the United States. Over the last four decades the United States imposed economic sanctions, but failed in forcing Iran to accept its hegemony. Over the years United States has sponsored and orchastered movements similar to 1979 protects to bring the change the prevailing administrative structure of Iran, but all in vain. In this article I have used details mostly published in the western media, some of the numbers may look exaggerated.   

Islamic Revolution (1979)

Major protests against the rule of Shah Reza Pahlavi began in January 1978 after an Iranian newspaper, Ettelaat, published a front-page editorial insulting Ruhollah Khomeini, a well-respected cleric, at the direction of the Shah. In reaction to the publication, several thousand protesters attacked symbols of the monarchy and clashed with security forces in the conservative city of Qom.

The opposition movement attracted millions of Iranians from all social strata. The monarchy was brutal, repressive and did not have popular support. Leftists wanted a more democratic system of government. Conservatives opposed the monarchy’s rapid westernization and secular outlook. High unemployment and inflation after 1977 economic collapse exacerbated tensions.

Between March and May 1978, the unrest spread to more than three dozen Iranian cities. On September 8, 1978, a day known as “Black Friday,” the regime imposed martial law and security forces opened fire on demonstrators in Tehran’s Jaleh Square, killing more than 100. By December 1978, protests had spread to nearly all of Iran’s major cities and dozens of smaller towns.

The Shah and his family fled the country for Egypt on January 16, 1979. Khomeini returned from exile and was welcomed by millions of people in the streets of Tehran. Khomeini officially took control of the government after a referendum establishing the Islamic Republic on April 1, 1979.

Price Hike Protests (2019)

In a surprise announcement on November 15, 2019, Iran hiked gas prices—by up to 300 percent—and introduced a new rationing system. The prime objective of the seemed raising funds to help the poor, but it backfired. The protests swept 100 cities over four days. They first broke out in oil-rich Khuzestan province, in Iran’s southwest but quickly spread to other regions, including Mashhad, a conservative stronghold and Iran’s second largest city, in the northwest. Demonstrators reportedly chanted anti-government slogans, including, "Have shame Rouhani, Leave the country alone!"

The regime used tear gas, water cannons and live ammunition to disperse the protesters. The government also nearly completely shut down the internet for five days to prevent images of the protests and crackdown from spreading over social media.

According to an Amnesty International report by December 2, at least 208 protesters had been killed. The Center for Human Rights in Iran estimated that 4,000 people were arrested. Iran rejected the reports by outside groups. The US State Department estimated that the regime killed more than 1,000 people, including at least a dozen children, but acknowledged that verification was difficult. Special Representative for Iran, Brian Hook, said US officials “know for certain” that the death toll was in the “many, many hundreds.”

Economic Protests (2017)

On December 28, 2017, demonstrators in Mashhad, Iran’s second largest city took to the streets to protest the government’s economic policies and the high prices of basic goods and commodities. The demonstrations quickly spread across the country to over 140 cities in every province, organized largely through social media messaging apps. The scope of the protests also expanded from economic woes to Iranian involvement in the Middle East and calls for regime change. Slogans included “not Gaza, not Lebanon, my life for Iran,” “leave Syria, think about us,” “Khamenei, shame on you, leave the country alone!" and "death to the dictator.” The protests were the largest and most intense since the 2009 Green Movement. But unlike the Green Movement, the 2017-18 protests were largely leaderless and disorganized. After two weeks of protests, at least 22 protesters were killed and more than 3,700 were detained. 

Green Scarf Movement (2009)

The Green Scarf Movement took its name from a green sash given to Mir Hossein Mousavi by Mohammad Khatami, Iran’s two-term president and the reform movement’s first standard-bearer. It reached its height when up to 3 million peaceful demonstrators turned out on Tehran streets to protest official claims that Mahmoud Ahmadinejad had won the 2009 presidential election in a landslide. Their simple slogan was: “Where is my vote?” The movement soon embodied the frustrated aspirations of Iran’s century-old quest for democracy and desire for peaceful change.

Over the next six months, the Green Movement evolved from a mass group of angry voters to a nation-wide force demanding the democratic rights originally sought in the 1979 revolution, rights that were hijacked by radical clerics. Every few weeks, protesters took to the streets to challenge the regime and its leadership. But by early 2010, the regime had quashed public displays of opposition. The Green Movement retreated into a period of soul-searching and regrouping.

Riot police and Basij paramilitary forces violently suppressed the demonstrations immediately following the election, which attracted more than 40,000 Iranians. Between June 2009 and February 2010, more than 30 protesters were killed and 4,000 were arrested.

Student Protests (1999)

On July 8, 1999, students at Tehran University gathered to protest the government’s closure of a popular reformist newspaper, Salaam. The student groups supported then President Mohammad Khatami (1997-2005) and his reformist political faction, the Association of Combatant Clerics, which operated Salaam. The demonstrations were initially peaceful. But later that evening, security forces attacked a Tehran University dormitory where the student protesters were holed up. Riot police beat the students with clubs and set several rooms on fire. At least one student was killed and hundreds more were wounded. Police arrested more than 1,500 of the protesters. The attack on the student dormitory sparked widespread anger and protests that spread across the country. More than 10,000 demonstrators chanted slogans against government hardliners and clashed with police in the streets.

Protests continued for six days. By the end of the unrest, at least four protesters were killed and an estimated 1,200 to 1,400 were detained. Khatami seemed helpless to protect his base of supporters. His silence when security forces and thugs beat up protesting students at Tehran University were indicators that he had lost the initiative. Control had passed to the hardliners. The government finally quelled the protests on July 13 after a ban was announced on rallies. But the student protests laid the foundation for the Green Movement a decade later.

Is OPEC the other name of Saudi Arabia?

A meeting of Organization of Petroleum Exporting Countries (OPEC) is scheduled for 5th December 2019; the day Aramco is also due to announce the final offer price. The producers are expected to extend their supply pact at the meeting. It is anticipated that delegates may discuss deeper supply cuts amid forecasts of supply glut in 2020.

Analysts are pinning hopes on the meeting because oil prices slipped to US$63 a barrel after spiking to US$72 in the aftermath of 14th September 2019 attacks on Saudi oil facilities. The current price is below the levels many OPEC countries need to balance their budgets and below the levels officials say they favor.

OPEC, Russia and other allies, known as OPEC+, had agreed to reduce supply by 1.2 million bpd. OPEC’s share of the cut is about 800,000 bpd, to be shared by 11 members, except Iran, Libya and Venezuela.

United States the game spoiler

Voracious appetite for oil of United States has always been a strategic Achilles’ heel, with that vulnerability put on display to the world to during the 1973 Oil Crisis. A chronic hypersensitivity to oil supply crunches and price volatility helps US shape its foreign policy – it has been the driving force behind US partnership with the historic oil market maker Saudi Arabia. That is the reason the US Navy’s 5th Fleet patrols the critical choke points of the Gulf (the Strait of Hormuz), the Suez Canal and the Strait of Bab al Mandeb – the southern entrance to the Red Sea.

US has reached a record breaking 12.8 million barrels per day (bpd) of oil production in November in 2019 – a new high watermark for the industry. Earlier in September, US had achieved something yet more impressive when it exported more petroleum products than it imported. For the world’s leading oil buyer this is a big deal. America consumes over 20% of the global production of 99 million bpd of daily crude production, with China holding the number 2 spot at 13% and India in a distant 3rd at 5%.

Today the US leads the world in the production of petroleum products, including crude oil, petroleum liquids and biofuels with 17.9 million barrels per day, or 18% of the petroleum market. At present the US is ahead of Saudi Arabia, with 12.4 million bpd or 12% of the world's total output, and Russia producing 11.4 million bpd or 11% of the global market.

According to a Reuters report, oil output by OPEC fell in November mainly because Saudi Arabia kept a lid on supply to support the market before the initial public offering (IPO) of state owned Saudi Aramco. It was also supported by reduced production by Angola due to maintenance.

At an average, the 14-member OPEC pumped 29.57 million barrels per day (bpd) during November, down 110,000 bpd from October’s revised figure. Production from the two other exempt producers, Libya and Iran, was reported unchanged.

During November 2019, Saudi Arabia pumped 9.85 million bpd, down 50,000 bpd from October. Riyadh’s output had jumped by 850,000 bpd in October after the September attacks, but remained below its stipulated quota by OPEC. In November, the country pumped around 400,000 bpd less than the agreement allows.

OPEC’s largest production drop of 140,000 bpd was because Angola exported less crude in November due to maintenance. The African producer was already pumping far below its OPEC quota due to a natural decline in production and a lack of new fields coming online, rather than due to voluntary restraint.

The 11-OPEC members bound by the agreement, which for now runs until March 2020, have easily exceeded the pledged cuts. Compliance has been encouraging, although Iraq and Nigeria remain laggards among larger producers.

OPEC’s second-largest producer Iraq has pumped slightly less, but continues to overshoot its target.

Nigeria, which has consistently pumped more than its OPEC target, continued to do so in November, although output edged lower this month.

Among countries pumping more, the largest increase was in Kuwait, which increased output by 70,000 bpd to 2.72 million bpd, reaching its exact quota level.

Ecuador also pumped more after a decline in October, when protests against government austerity measures led to several fields being shut down.

Venezuela, which is contending with US sanctions imposed on state oil firm PDVSA and a long-term decline in output, managed a small boost to supply with exports increasing in November.

Iran Grain Conference opens in Tehran on 2nd December 2019

Tehran, Iranian capital will host 70 renowned foreign companies during a large international conference on grains, oilseeds and related industries on 2^nd and 3^rd December 2019.

The event titled “Iran Grain Conference 2019” is the largest conference ever held in Iran in the field of grains, Sharif Nezam-Mafi, the Board Chairman of Iran-Switzerland Joint Chamber of Commerce which is organizing the international gathering, said in a press conference.

Nezam-Mafi, who is the secretary of the event, said for the first time in the country a conference on grains includes the complete chain of the related products, technology, equipment, industries and all other related issues. “It is a prominent feature of Iran Grain Conference.”

Referring to the high number of participants and sponsors of the event, he said 450 applicants have registered to participate in the conference, of them 70 applicants are from other countries including Russia, Germany, Switzerland, Denmark, France, China, Turkey, Azerbaijan and Kazakhstan, and the event is sponsored by 35 companies and associations.

He said the foreign participants are all renowned companies in the international level and in fact they are all among the Ten Top companies of their countries in the related fields.

 Networking, major objective of conference

Nezam-Mafi further said that the main objective and role of Iran Grain Conference is “Networking” and in fact it tries to create a proper ground for the Iranian companies to find their foreign partners.

Many of foreign companies think that Iran is an importer of the consumer products, he said, adding, “We intend to let them know that Iran is a major producer in many fields.”

Many specialized panels

Elsewhere in his remarks, Nezam-Mafi referred to holding many specialized panels in various fields on the sidelines of the conference as another prominent feature of the international event and mentioned “Trade” as the subject of the first panel which will discuss international banking during the sanctions.

The panels mainly cover issues related to the future needs and limitations, for example those related to the climate change, and will discuss the possible resolutions, he informed. 

He also named some of the main speakers of the event as Yazdan Seif, Iran’s deputy agriculture minister and CEO of Government Trading Corporation of Iran (GTC), Masoud Khansari, the head of Tehran Chamber of Commerce, Industries, Mines and Agriculture (TCCIMA), Ferial Mostofi, a board member of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA), and Markus Leitner, the Swiss ambassador to Tehran.

 To build a linking bridge

During the same press conference, Hossein Ziaian, one of the Board member of Iran Grain Conference, referred to the status of Iran in the grain market and said that given its potential the country should elevate its status in this field.

“Through inviting private sector and foreign companies we wanted to create a linking bridge through this conference in a way that Iran can promote its status especially during the current condition”, he underlined.

Creating a linking bridge between Iranian companies and foreign ones especially during the sanctions time is in fact a main objective of this international gathering, he noted.

Ziaian further said, “We are planning to hold provincial and regional conferences continuously after holding Iran Grain for further promotion of the country’s status in the field of grains.”

To expand export market

Hossein Yazdjerdi, another Board member of the Conference, who was also present in the press conference, said that Iraq, Afghanistan and North African countries are some major importers of flour in the region and Iran can benefit from this opportunity to expand its export market, adding that Iran Grain Conference is a platform to help the country promote its export status.

The organizers have made many efforts to make this conference as attractive as possible to address many important attendees, he underscored.

Yazdjerdi further elaborated on the status of wheat cultivating in Iran and said, “The good news is that we have achieved self-reliance in production of wheat, but in terms of the quality of this grain we should still try to promote it, as just 40 percent of our produced wheat is of high quality.”

To highlight Iran’s presence

Later in the press conference, Seyed Mohammadreza Mortazavi, the Board Chairman of Federation of Iranian Food Associations and also a Board Member of Iran Grain 2019, mentioned creating stable and effective ties as the major aim of holding this international event and expressed hope that it can highlight Iran’s presence in the global market.

“It is true that we are an importer of many grains, but Iran has a high potential for processing these products”, he further said.

“We have problems in cultivation, import and export of grains, but we hope to find the ways for stable supply of our required grains”, he added.

“There is a 10-year outlook for grain supply, but if the market is not managed properly, we will face serious problems”, the official commented, adding, “We should benefit from our geopolitical status to prevent such problems.”

Such conference missing in Iran

Kaveh Zargaran, Secretary General of Federation of Iranian Food Associations, who is also a board member of Iran Grain 2019, said, “For many years, we have been seeing that the neighboring countries which hold shares very lower than Iran’s share in the grain market, are holding such conferences, but it was missing in our country.”

Now, it is hoped that Iran Grain Conference can highlight the country’s role and status in the grain market, he mentioned in the same press conference.

Analysts using deception to keep oil price high

All the indicators suggest that global crude oil market is suffering from supply glut, mainly because of high shale oil production. Nothing seems to be moving oil price in any way other than Sino-US trade war. The western media is still trying to prove that very thing hinges on the two powerhouses striking a deal, be it global economic growth or oil demand. Any attempt to try to create bullish sentiments seems completely artificial and far away from ground realities.

The markets appear to have turned decidedly bearish with supply/demand imbalances drowning out everything else to the extent that even an epic event, attack on Saudi Aramco oil facilities proved storm in a cup of tea. The event that could have caused the biggest supply disruption in the history only provided a temporary support for prices. 

The western media is still busy in creating illusion by suggesting several scenarios that could induce rally in oil markets and put prices on upward trajectory once again. It is suspected that once a trade deal is reached, then geopolitical risk will again be able to create upsets and the often used recipe will be the rig count, which often creates the highest deception.

During the first week of November 2019, hedge fund bets on US benchmark, WTI that took its price to new highs. Even though US shale producers are pumping crude like crazy and adding to supply, hedge funds see reduced drilling as a sign of lower production next year. 

It can’t be ruled out that western media will use three scenarios for pushing oil prices higher in the near-and mid-term:

Sino-US deal

The long-running trade war between the world’s two biggest economies has brought about a general malaise to the global economy. Negotiations between Washington and Beijing have been long, intermittent and protracted with plenty of confusion.

It is often said, all’s well that ends well - finally, there seems to be some light at the end of the tunnel after the Trump-led team announced they have finalized ‘Phase One’ of the trade negotiations. Oil markets have largely remained indifferent, underlining just how much damage the trade spat has wrought on the global economy. Maybe all those platitudes about confidence bouncing back after an initial deal were a touch optimistic.

Geopolitical Risk

Rising geopolitical risks, particularly in the Middle East - home to more than 60 percent of the world’s oil reserves is bullish for oil. Tensions between Iran and Saudi Arabia reached a boiling point following the 14th September attacks on Aramco’s oil facilities. The New Iran Deal remains a highly emotive issue. Western media alleges Iran has kicked off another round of uranium enrichment. The International Atomic Energy Agency will release a new report, which will clarify whether Iran has been complying with its commitments or not.

The European Union is desperate to forge a new nuclear deal with Iran to replace the 2015 deal that Trump had quit last year. The EU is trying to create a Special Purpose Vehicle that can help the bloc circumvent US sanctions and continue buying Iranian oil. So far, it’s clear the sanctions are working, with oil exports from Iran on a continuous decline.

In the highly likely event that Trump and his European allies are unable to forge a new deal, tensions between Iran and Saudi Arabia are likely to escalate. While chances of an all-out war with the US or Saudi Arabia appear slim, tensions in the region are likely to remain high and increase the supply risk.

Declining inventories and rig count

In late October, oil prices surged 3 percent after the US Energy Information Administration reported a surprise decline in US crude inventories. The organization revealed that on a seasonal basis, gasoline demand in the US has been at its highest since 1991. Meanwhile, US oil rig count has been trending south for many months now. The latest Baker Hughes report showed a decline of 5 rigs from the preceding week to 817, and a massive fall from the 1,057 rigs reported at a corresponding point last year. So far, production has continued to rise amid the rig count collapse only because drillers are focusing on bringing the considerable fracklog of uncompleted wells online. Obviously, this can only go on for so long, and at some point, production is bound to get compromised. Right now, it’s the perfect time to play the short-term buy and sell game, buying on the dip and selling on the spike, as long as WTI is trading at a bottom range of between US$49 to US$55.

Can sustainable peace be established in Middle East?

One wonders why Middle East and North Africa (MENA) continue to suffer from internal turmoil as well as proxy wars. Some analysts say the single largest reason behind ongoing turmoil can be ongoing attempts to keep crude oil prices high to facilitate other countries to boost their domestic oil production.

The latest evidence was attack on Aramco facilities in Saudi Arabia to attract high subscription to Initial Public Offering (IPO). The immediate success was, China opting to take US$10 billion stake in one of the largest energy production facility in the world.

Reportedly, Saudi Arabia is making efforts to negotiate an end to the Yemen war by initiating a dialogue with Iran. This move is not likely to be approved by US President Donald Trump, the biggest proponent of maximum pressure on the Islamic republic.

Saudi officials hope that talks mediated by Oman and Britain between the kingdom and Houthi rebels will lead to a revival of stalled talks between the Yemeni insurgents and the Saudi-backed, internationally recognized government of Abed Rabbo Mansour Hadi.

 Saudi crown prince Mohammed bin Salman has tasked his younger brother and Saudi deputy defense minister, Khalid bin Salman, with engineering an end to the Yemeni war as part of a broader revamp of Saudi foreign policy.

The revamp involves a return to a more cautious foreign and defense policy that embraces multilateralism after several years in which the kingdom adopted an assertive and robust go it alone approach that produced several fiascos, including the Saudi-led intervention in Yemen initiated four and a half years ago. The revamp was prompted by attacks in September on two of the kingdom’s key oil facilities as well as doubts about the reliability of the US defense commitment to the Gulf.

The kingdom’s return to a more cautious approach is also intended to project itself in 2020 as president of the Group of 20 (G20) and repair its image tarnished by the Yemen War, the killing of journalist Jamal Khashoggi in 2018, and a domestic crackdown on dissent.

 Trump’s response to the September drone and missile attacks for which the Houthis were blames claimed in some ways was the clearest indication that Gulf States may not be able to count on the United States in times of crisis.

Trumph said that the attack was on Saudi Arabia and the US would certainly help them, but his adoption of a transactional attitude towards Gulf security did upset Saudi Arabia.

 It is being propagated by the US that the attacks on Saudi Arabia suggests that escalation of US-Iranian tensions would make them targets in an environment in which the United States may not wholeheartedly come to their rescue.

The US officials are also suggesting that now the Saudi policy is to lessen their involvement in Yemen and to stop Yemen being some version of a proxy so they (the Saudis) can deal directly with Iran.

United Nations Yemen envoy Martin Griffiths told the UN Security Council this week that the number of air attacks by the Saudi-led coalition had dropped by nearly 80% lately.

Griffiths said, “We call this de-escalation, a reduction in the tempo of the war and perhaps a move towards an overall ceasefire in Yemen,". He also expressed hopes that a negotiated end to the war could be achieved early next year.

However, the efforts to end war as well as gestures towards Iran in recent months by the United Arab Emirates did not stop senior Saudi and UAE officials from adopting a hard line.

“Appeasement simply cannot work with Iran. We hold Iran responsible for the attack on Abqaiq. We do not want war, but Iran needs to be held accountable” said Saudi Minister of State for Foreign Affairs Adel al-Jubeir at a Bahrain gathering.

Al-Jubeir’s UAE counterpart, Anwar Gargash added, “The key to stability is deterrence and steadfast resolve of the international community was that Iran must change. If not, sanctions must be increased, not loosened.”

Trump's favors to Netanyahu

Washington has always been Israel’s main ally, but support to Tel Aviv during the tenor of President Donald Trump is unprecedented. The US President has offered more favors to Israel and Benjamin Netanyahu, from recognizing al-Quds as Israel’s capital to backing settlements.

It may not be wrong to say that Trump has provided Netanyahu all the favors for which former Israeli prime ministers were eager to receive. One should not forget that all these favors are in contravention of international law and UN Resolutions,

For Israel, there was no time more pleasant than 13-year premiership of Netanyahu which coincided with Trump’s presidency. No US president has served the Israeli government like Trump.

Netanyahu, who has been facing corruption trial, has remained in power only because of Trump’s assistance. Despite his failure to form a cabinet in the second parliamentary elections in a year, Netanyahu continues to remain in power.

By shifting the forty-year US stance on Israel’s settlements in the occupied territories, Trump dealt his last blow to the Palestinian-Israeli peace process despite talking about the peace project propagated as “deal of the century”.

From 1979, President Jimmy Carter all US presidents have opposed the settlement, but Trump changed the forty-year policy. In 2016 and last days of Barack Obama’s presidency, the UN passed a resolution against Israel, which condemned the settlements in the West Bank.

The settlement policy was so inconsistent with international law and against peace with the Palestinians that even the United States refused to veto the UN Security Council resolution, contrary to what it had been doing for decades.

An extraordinary favor by Trump was to recognize Israel’s sovereignty over occupied Golan Heights. The action also was in line with reinforcing Netanyahu’s position in the election, a move which was objected by his rivals, who viewed it as interference in Israel’s internal affairs.   

The Golan Heights belong to Syria. Israel occupied the Golan Heights in 1967 and formally annexed it to the occupied territories in 1981. The annexation has been opposed by the international community. The US is the first country that has recognized Israel’s sovereignty over the Syrian territory.

A month later, Netanyahu, in a heavily propagandistic way and in line with his approach of luring Trump, announced that a city will be built after the name of Trump in the Golan Heights. Although, the plan was passed in the Knesset, no budget was approved for its implementation; it did not go beyond propaganda.

 Former US Secretary of State Rex Tillerson, in a speech at Harvard University, called Netanyahu “an extraordinarily skilled” politician and said that Trump has been played by Israel’s prime minister.

Trump’s another favor to Netanyahu, but a blow to Palestine was recognition of al-Quds as Israel’s capital and to move the US embassy to the city. The action was considered as a huge success for Netanyahu, especially at a time that he was under political and judicial pressure.

All Palestinian groups, such as Hamas and the Islamic Jihad, as well as the Palestine Liberation Organization (PLO) opposed Trump’s action, and the relations between United States and Palestinian National Authority nosedived. Palestinian National Authority President Mahmoud Abbas called al-Quds the eternal capital of Palestine.

Now, one should wait and see whether Netanyahu, who has failed to form a cabinet in the last two elections, will remain in power or face the trial.

Afghanistan eyes boosting transit through Iranian Chabahar Port

According to an IRNA report, Afghanistan Ambassador to Iran, Abdul Ghafoor Liwal said his country plans to increase commodity transit through Iranian Chabahar Port. He made these remarks in a meeting with Abdolrahim Kordi, Chairman, Board of Chabahar Free Trade Industrial Zone Organization.

In the meeting, Liwal said expansion of all-out relations won’t be possible without stronger economic ties and “we are determined for stronger presence of our businessmen and traders in Chabahar Port.” 

“Chabahar is an economic and a transit bridge for Afghanistan and we are going to expand our economic relations through increasing exports and imports through Chabahar,” he said.

According to the official, following the country’s plans for boosting trade in Chabahar, setting up an Afghan bank branch in the port is one of the plans that Afghanistan is pursuing along with other programs to resolve issues like residency and certification problems.

Kordi underlined some of the port’s capacities and investment potentials, saying more than 176 Afghan companies have registered with Chabahar Free Trade Industrial Zone Organization for trade activities in the port, however only 32 of them are currently active.

“Chabahar is a strategic port and Afghan businessmen and traders need to have a greater presence in it and increase their investment,” emphasized Kordi.

If one can recall, in 2016, Iran, India and Afghanistan had decided to jointly establish a trade route for landlocked Central Asian countries. India committed up to US$500 million for the development of Iran’s Chabahar Port along with associated roads and rail lines. India launched a trade route to Afghanistan via Iran through shipping its first consignment of wheat to Afghanistan in late October 2017, bypassing longtime rival Pakistan.

Is Lebanon the next target of US lust for oil?

The protests and political upheavals in Lebanon and apprehensions by United States must be read very carefully. The developments in Lebanon have to be viewed with a different perspective after Lebanese Energy and Water Minister Neda Boustani announced the start of drilling of country’s first oil well in the waters off the coast of Beirut.

The oil well is to be drilled in the Mediterranean 30 kilometers from the Lebanese capital in the north. About a year and a half ago, Lebanon awarded its first offshore gas and oil exploration and production agreements to a consortium of France’s Total, Italy’s Eni and Russia’s Novatek for two blocks out of ten.

Ten oil blocks have been identified in the coastal waters of Lebanon with an area about 18,000 square kilometers.

The Americans, who have shown that the smell of oil drives them to the oil-rich countries, these days, pretend that they are really concerned about the situation in Lebanon and its people. Mike Pompeo, US secretary of state, has recently claimed that Iraqi and Lebanese people want their countries back from Iran.

The expression of concerns by the US over the situation in Lebanon, in the light of Boustani’s announcement, has led various Lebanese groups, especially Hezbollah, to feel the danger very well. Hezbollah Executive Council Deputy Chief Sheikh Ali Da’mush has warned that the US and its allies are seeking to undermine the political system in Lebanon and restructure it in their own favor.

The US wants a government comes to power which would be under its own control and implement Washington’s plans. For example, it wants Lebanon agree to demarcation of borders based on Israel’s wishes, grant projects for oil and gas extractions to US companies, permanently house the displaced Palestinian people, and target the axis of resistance and its missile power.

In addition to the United States, the Zionist regime is also happy with the unrest because Israel has disputes with Lebanon over common borders as well as oil and gas resources. Such an uprising provides the opportunity for Tel Aviv to plunder Lebanese natural resources.

The Zionist regime which is violating the Lebanese land, airspace and territorial waters frequently will take advantage of the protests in the country while Lebanese officials are doing their utmost to improve and calm the situation. Consequently, the officials will not be able to pay attention to regional issues, which is a matter that Hezbollah has repeatedly warned about.

Undoubtedly, one cannot have a positive view of sudden unrest in oil-rich countries in the Middle East under the shadow of US intervention. History has shown that oil-rich countries have always suffered from domestic tensions and crises so that Western powers, that usually lead the riots, can easily plunder their oil resources. 

In any case, it seems that after Syria, the US has specified Lebanon as its next destination for oil robbery, and US officials are expected to make specific comments on the developments in the country in future days.