Is turmoil in Persian Gulf aimed at containing Beijing’s access to energy resources of the region?

Though, I often reject conspiracy theories, but at time I also tend to pay attention to these, which provide me an opportunity to get a better perspective. One such theory demands little probe, is United States creating turmoil in Persian Gulf region to contain China’s access to energy resources of the region?

Since commencement of economic growth in 1993, China has become heavily dependent on imported oil from other countries. At present, it is the second largest energy consuming and the third largest oil importing country in the world. Despite Beijing’s efforts to ensure its energy security by diversifying its energy sources during the past years, the country is still heavily dependent on energy import from the Arabian Peninsula.

China has left its rivals far behind and became the second biggest economy of the world after the US. It seems that due Beijing is likely to leave behind the US in near future and become the world’s biggest economy. The White House has kept an eye on China’s development, its plans and initiatives and never been negligent in monitoring its ambitions and achievements.

Ever since Donald Trump, became President, conflicts between China and the sole surviving super power have widened from economic and trade to political and security conflicts. Now, the increase in Chinese power and global influence has become a major challenge for the White House. As a first step, Trump initiated trade and economic war against Beijing and in the next stage Trump wants to restrict China’s influence globally, particularly among the US allies.

To contain China, the US has resorted to many strategies and tactics such as destabilizing west borders of China with Afghanistan and Pakistan and trying to spread to central Asia aiming at thwarting Chinese ‘One road-One belt’ initiative that many experts believe will enable China to determine the word trade orders in the future.   

China imports crude oil from the following countries:

• Russia: US$37.9 billion (15.8%)
• Saudi Arabia: $29.7 billion (12.4%)
• Angola: $24.9 billion (10.4%)
• Iraq: $22.4 billion (9.4%)
• Oman: $17.3 billion (7.2%)
• Brazil: $16.2 billion (6.8%)
• Iran: $15 billion (6.3%)
• Kuwait: $11.9 billion (5%)
• Venezuela: $7 billion (2.9%)
• United States: $6.8 billion (2.8%)
• United Arab Emirates: $6.7 billion (2.8%)
• Congo: $6.4 billion (2.7%)
• Colombia: $5 billion (2.1%)
• Malaysia: $4.8 billion (2%)
• Libya: $4.7 billion (2%)

Crude oil is the driving engine of Chinese economy and any threats to energy security will inflict a heavy blow to the country’s economic growth. The statistics show that some 43% of the crude oil imported by China passes through the Persian Gulf. Another 4.6% goes from Libya and Venezuela, the US destructive polices have already created a chaotic situation in these two countries.

Many experts believe that the US withdrawal from Iran’s nuclear deal not only aims at pressurizing Iran, but also to pressurize China to compromise in the trade war that Washington has waged against it. Any conflict or tension in the Persian Gulf region means a great blow to China’s economy. Therefore, many suspicious incidents and tensions created by Washington and its proxies in Persian Gulf can be termed as the White House measures to contain China in order to guarantee the US hegemony.

With its provocative actions and sanctions, Washington not only aims to buttress its support for Israel and its Arab allies by punishing Iran, but also intends to deny Chinese access to Iranian oil.  The fear of and rivalry with China is today one of the primary drivers of American foreign policy.  Interruption of the oil flow in the Gulf is one way to directly hurt Chinese interests.  The Trump administration is, therefore, playing with fire in Iran and a potential conflagration with China.

The rising tensions between the US and Iran are mainly caused by Tehran’s policy and Washington’s intolerance. Iran's resistance to the US pressure is in fact shaping an equation in which the Islamic Republic indirectly contributes to the interests of China and even Europe. In a long-term strategic perspective, the dangers of insecurity in the Persian Gulf region, and the proximity of Europe and China to the region, heighten the need for greater coordination between Iran, China and Europe in countering the US hegemony.

There also seems a close relation between US created tensions in the Persian Gulf and containment of China, as Washington wants to exclude China from the region. Therefore, containing Iran is of crucial importance as China buys its oil. Therefore, China is likely to revisit its policy of balancing Iran and the US. Beijing may respect the latest sanctions on Iran, but resist any possibility of the US military attack on Iran. In my opinion the issue is not about Iran, but about China. I am convinced that the efforts are aimed at exploiting serendipitous opportunity.

Iran shoots down intruding US spy drone

In a statement issued early Thursday, the IRGC said the US-made Global Hawk surveillance drone was brought down by its Air Force near Kouh-e Mobarak region, after the aircraft violated Iranian airspace. The downing came after repeated violations of Iran’s airspace by US reconnaissance drones in the Persian Gulf region.

Reacting to the news, the US military claimed it did not fly over Iranian airspace on Wednesday. “No US aircraft were operating in Iranian airspace today,” said Navy Captain Bill Urban, a spokesman for the American military’s Central Command.

However, according to Associated Press an American military drone had been shot down in “international airspace” over the Strait of Hormuz by an Iranian surface-to-air missile. The drone was a US Navy MQ-4C Triton, which builds on elements of the RQ-4 Global Hawk with minor changes.

The RQ-4 Global Hawk unmanned aircraft system (UAS) can fly at high altitudes for more than 30 hours, gathering near-real-time, high-resolution imagery of large areas of land in all types of weather. The Northrop Grumman MQ-4C Triton is a maritime derivative of the RQ-4B Global Hawk and the airborne element of the US Navy’s Broad Area Maritime Surveillance Unmanned Aircraft System.

 Interestingly no MQ-4C is supposed to be in the Middle East. The deployment must have been secret. Update: This specific drone seems to have arrived in Qatar only a few days ago.

The incident is another piece of evidence that Trump's "maximum pressure" campaign against Iran now works against him.

In December last year, Secretary of Defense Leon Panetta had told Fox News that the US will "absolutely" continue the drone campaign over Iran, looking for evidence of any nuclear weapons work. But the stakes are higher for such surveillance, now that Iran can apparently disrupt the work of US drones.

During an appearance with Canadian Prime Minister Justin Trudeau, Trump said, “Probably Iran made a mistake – I would imagine it was a general or somebody that made a mistake in shooting that drone down.”
According to officials in Jerusalem, Israel is closely monitoring the situation, although the IDF has not moved to a heightened alert status. Prime Minister Benjamin Netanyahu addressed the issue briefly in a statement, saying, “In the last 24 hours Iran has intensified its aggression against the US and against all of us. And I repeat my call for all peace-loving countries to stand by the US in its effort to stop Iranian aggression. Israel stands by the US on this.”

Netanyahu’s comments were similar to what he said lately, following last week’s attacks on two tankers in the Gulf of Oman. He had urged all peace-seeking nations to support the US and Trump in their efforts to ensure freedom of navigation in international waterways.

US State Department announcement of ending war in Afghanistan is yet another big lie

Lately, the US Department announced, “The top US priority in South Asia is to end the war in Afghanistan through a sustainable political settlement.” It informed the Congress that any political settlement must also ensure Afghanistan’ never again serves as a haven for terrorist attacks against the United States or its interests.”

Ambassador Zalmay Khalilzad, a US diplomat of Afghan origin who is negotiating a political settlement with the Taliban, said that the US-backed peace plan could be “A springboard for regional connectivity, development, and economic integration.”

Earlier, the State Department and the Afghan government agreed to focus US assistance on America’s highest priority, “Furthering the peace process, ensuring Afghanistan does not serve as a terrorist safe haven, promoting Afghan self-reliance, and maintaining Afghan stability.”

I have no option but to term the statement of US Department a lie on the following grounds:

1) Afghans Taliban had neither played any role, whatsoever in 9/11, nor do they have the capacity to hit US interests or its allies. Taliban were used by the US to repel USSR attack on Afghanistan, which they did successfully.

2)  The US had announced to pull its troops from Afghanistan in 2014, which were not. It seems US is adamant at keeping its troops in Afghanistan because of ‘other reasons’. Over the years the US had failed in bringing peace and ushering development in the country, as it was never an objective.

3) One of the conspiracy theories is that the division of Taliban into good and bad is based on the support for or resistance against cultivation of poppy in Afghanistan. It seems that those resisting cultivation of poppy in Afghanistan and demanding withdrawal of US troops have been termed ‘Bad Taliban’.

4) The persistent stay of US troops in not for the development of Afghanistan but for the protection of drug trade, which allows CIA to make billions of dollars every year and use it on proxy wars in South Asia, Middle East and North Africa.

5)  After the recent hype in US-Iran confrontation, it seems more probable that US will increase its troops in Afghanistan and use them in the assault against Iran.

Therefore, all the favors the US intent to offers to Afghans are nothing but cover up, these include: 

1)       US working with the Afghan government to define the parameters of a sustainable, long-term partnership, a shift from military to civilian assistance.

2)       State Department’s 2020 budget seeking resources to help Afghanistan to maintain and expand the gains it has made over the last 18 years.

3)       Earlier, the World Bank held a donors meeting in Kabul on to arrive at and cement a peace agreement that allowed increasing economic well being and prosperity.

4)       Promoting self-reliance by developing internal resources, attracting investments, and reducing security costs.

Seven Reasons one should not trust US narrative on Gulf of Oman Incident

One should have not been surprised the way US Secretary of State Mike Pompeo blamed Iran for the damage done to two vessels in the Gulf of Oman recently, without offering any credible evidence.

Pompeo told the press in a statement, “This assessment is based on intelligence, the weapons used, the level of expertise needed to execute the operation, recent similar Iranian attacks on shipping, and the fact that no proxy group operating in the area has the resources and proficiency to act with such a high-degree of sophistication,”.

Pompeo concluded, “The US will defend its forces, interests, and stand with our partners and allies to safeguard global commerce and regional stability. And we call upon all nations threatened by Iran’s provocative acts to join us in that endeavor.” Following are the seven reasons to reject whatever Secretary has said:

1) Pompeo is a known liar, especially when it comes to Iran.

The entire world knows that Pompeo has a well-established history of circulating blatant lies about Iran. He recently told an audience at Texas A&M University that when he was leading the CIA, “We lied, we cheated and we stole. We had entire training courses.”

2) The US administration is known to use lies and false flags to start wars.

The US centralized power alliance has an extensive and well-documented history of advancing preexisting military agendas using lies, false flags and psyops to make targeted governments appear to be the aggressors. This is such a well-established pattern that “Gulf of Tonkin” briefly trended on Twitter after the Gulf of Oman incident. Any number of government agencies could have been involved from any number of the nations in this alliance, including the US, the UK, Saudi Arabia, UAE or Israel.

3) John Bolton has openly endorsed lying to advance military agendas.

The Trump administration had already begun rapidly escalating against Iran in ways that happen to align perfectly with the longtime agendas of Trump’s psychopathic Iran hawk National security adviser. At that time people were so aware of the possibility that Bolton might involve himself in staging yet another Middle Eastern war based on lies.

4) Using false flags to start a war with Iran is already an established idea in the DC swamp.

Back in 2012 at a forum for the Washington Institute of Near East Policy think tank, the group’s Director of Research Patrick Clawson openly talked about the possibility of using a false flag to provoke a war with Iran, citing the various ways the US has done exactly that with its previous wars.

5) The US State Department has already been running psyops to manipulate the public Iran narrative.

Lately, State Department officials admitted to congressional staff at a closed-door meeting that a US$1.5 million troll farm had gone “beyond the scope of its mandate” by aggressively smearing American critics of the Trump administration’s Iran policy as propagandists for the Iranian government, according to a new report from The Independent. That “mandate” had reportedly consisted of “countering propaganda from Iran,” also known as conducting anti-Iran propaganda.

6) The Gulf of Oman narrative makes no sense.

One of the ships damaged in the attacks was Japanese-owned, and the other was bound for Japan. This happened just as Japanese Prime Minister Shinzo Abe was in Tehran attempting to negotiate de-escalation between the US and Iran with Trump’s blessing, and just after Iran had released a prisoner accused of conducting espionage for the US in what many took to be a gesture of good faith.

Iran has been conducting itself with remarkable restraint in the face of relentless sanctions and provocations from the US and its allies. It wouldn’t make much sense for it to suddenly abandon that restraint with attacks on sea vessels, then rescue their crew, then deny perpetrating the attacks, during a time of diplomatic exchanges and while trying to preserve the nuclear deal with Europe. If Tehran did perpetrate the attacks in order to send a strong message to the Americans, it would have been a very mixed message sent in a very weird way with very odd timing.

7) Even if Iran did perpetrate the attack, Pompeo would still be lying.

Pompeo’s statement uses the words “unprovoked” twice and “Iran’s provocative acts” once, explicitly claiming that the US empire was just minding its own business leaving Iran alone when it was attacked out of the blue by a violent aggressor. Sometimes the things put out by the US. State Department feel like they’re conducting experiments on us, just to test the limits of our stupidity

The US has been provoking Iran with extremely aggressive and steadily tightening sanctions, which means that even if Tehran is behind the attacks, it would not be the aggressor and the attacks would most certainly not have been “unprovoked.” Economic sanctions are an act of war; if China were to do to America’s economy what America is doing to Iran’s, the US would be in a hot war with China immediately. It could technically be possible that Iran is pushing back on US aggressions and provocations, albeit in a strange and neo-conservatively convenient fashion.

Either way, we have seen no evidence supporting Pompeo’s claims, so anyone hastening to blame Iran for the Gulf of Oman incident is either a war whore or a slobbering moron, or both. Knowing what we know about the US-centralized empire and its pre-existing regime change agenda against Iran, there is no reason to believe Pompeo and many reasons not to.

Strait of Hormuz: Most important oil artery of the world

Three weeks ago I wrote an article ‘Brewing turmoil in Pakistan’s backyard’ and the concluding remarks were, “The fact remains that none of the country (United States or Iran) wants to get the blame for initiating a conflict, but it doesn’t mean that the threat of eminent war is not there. There is a fear that miscalculation or misunderstanding can trigger confrontation and an outbreak of war. As the US expands its military presence in the region, the risk of beginning an accidental war rises further.”

The apprehension came true last Thursday when two oil tankers were attacked and left adrift in the Gulf of Oman. Washington was prompt in accusing Tehran of being behind a similar incident on 12^th May when four tankers were attacked in the same area, a vital oil shipping route. Russia was quick to urge caution, saying no one should rush to conclusions about Thursday’s incident or use it to put pressure on Tehran, which has denied the US accusations. There were no immediate statements apportioning blame after Thursday’s incidents, nor any claims of responsibility.

WHERE IS STRAIT OF HORMUZ LOCATED?

The strait lies between Oman and Iran, It links the Gulf north of it with the Gulf of Oman to the south and the Arabian Sea beyond. It is 21 miles (33 km) wide at its narrowest point, with the shipping lane just two miles (three km) wide in either direction. The UAE and Saudi Arabia have sought to find other routes to bypass the Strait, including building more oil pipelines.

WHY DOES IT MATTER?

Almost a fifth of the world’s oil passes through the Strait - some 17.4 million barrels per day (bpd) versus consumption of about 100 million bpd in 2018. OPEC members Saudi Arabia, Iran, the UAE, Kuwait and Iraq export most of their crude via the Strait. Qatar, the world’s biggest liquefied natural gas (LNG) exporter, sends almost all of its LNG through the Strait.

CURRENT POLITICAL TENSION

The US has imposed sanctions on Iran aimed at halting its oil exports. Iran has threatened to disrupt oil shipments through the Strait of Hormuz if the US tries to strangle its economy. The US Fifth Fleet, based in Bahrain, is tasked with protecting commercial shipping in the area.

MAJOR PAST INCIDENTS

During the 1980-1988 Iran-Iraq war, the two sides sought to disrupt each other’s oil exports in what was known as the Tanker War.

In July 1988, the US warship Vincennes shot down an Iranian airliner, killing all 290 aboard, in what Washington said was an accident and Tehran said was a deliberate attack.

In early 2008, the US said Iranian vessels threatened three of its Navy ships in the Strait.

In July 2010, Japanese oil tanker M Star was attacked in the Strait by a militant group called Abdullah Azzam Brigades linked to al Qaeda claiming responsibility.

In January 2012, Iran threatened to block the Strait in retaliation for US and European sanctions that targeted its oil revenue in an attempt to stop Tehran’s nuclear program.

In May 2015, Iranian ships seized a container ship in the Strait and fired shots at a Singapore-flagged tanker which it said damaged an Iranian oil platform.

In July 2018, President Hassan Rouhani hinted Iran could disrupt oil trade through the Strait in response to US calls to reduce Iran’s oil exports to zero.

In May 2019, four vessels - including two Saudi oil tankers - were attacked off the UAE coast near Fujairah, one of the world’s largest bunkering hubs, just outside the Strait of Hormuz.

Europe might give up on saving JCPOA

Iran’s former ambassador to Norway has warned that Europe might give up on saving the 2015 nuclear pact and the financial mechanism of Instrument in Support of Trade Exchanges (INSTEX), which was established to do business with Iran.

German Foreign Minister Heiko Maas was in Tehran for talks on ways to keep the nuclear deal, officially called the JCPOA in English or Barjam in Persian, alive. 

“It is possible that Europe would no more attach any significance to [saving] Barjam,” Mehr on Monday quoted Abdolreza Faraji-Rad as saying.

Faraji-Rad expressed doubt about the future of Iran-Europe relations, especially due to the growth of far-right groups in European countries manifested in the latest European Parliament elections.

He further said the person who will succeed European Union Foreign Policy Chief Federica Mogherini might not share her insistence on cooperating with Iran and salvaging the JCPOA.

Also the person who will succeed British Prime Minister Theresa May can be more of a hardliner compared to May, which could create a gap within Europe, Faraji-Rad remarked.

“This could mean that Europe might no longer place any importance to Barjam,” he said, underlining that such facts must be taken into careful consideration.

The JCPOA was signed between Iran and six international mediators (the United Kingdom, Germany, China, Russia, the United States, and France) in July 2015. Under the deal, Iran undertook to curb its nuclear activities in exchange for termination of the sanctions imposed previously by the United Nations Security Council, the European Union and the United States over its nuclear program.

On May 8, 2018, the United States unilaterally withdrew from the deal despite worldwide objections and followed the move with a “maximum pressure” policy against the Islamic Republic.

Likely facets of forthcoming Bangladesh Budget

Finance Minister of Bangladesh, Mustafa Kamal is scheduled to announce the budget for financial year 2019-20 in parliament on 13^th June 2019, a few days after the announcement of Pakistan's Budget for the next financial. I have just picked up news from a leading Bangladesh newspaper, which may give Pakistanis a chance to see what is being done there. 

Aiming to invigorate the promising export sector, an ailing stock market and cooling property markets, the upcoming budget is likely to announce a number of incentives to rekindle the business and investment environment, said sources involved in preparing this year’s national budget for parliamentary approval.

The incentives include enhanced subsidies, tax cuts and fiscal stimulus to take the economy to an 8.5% growth rate in financial year 2019-20.

Realtors and land developers have long been demanding a reduction of registration fees, including the Value Added Tax (VAT) and other taxes on the sale and transfer of property, like apartments or land, so as to stimulate the slowing real estate market. According to sources, the upcoming budget is likely to almost halve the current aforementioned costs.

Currently, total fees for flat registration are 14% to 16%, and 17% for land registration. The fee is imposed on the deed value of property.

A budgetary measure is also likely to be announced for the first time for the resale of existing (not new) flats.

National Board of Revenue (NBR) officials think a secondary property market boom would stimulate the economy further if registration fees for used flats were rationalized.

Presently, registration costs remain the same for both new and used flats.

The proposed budget is set to raise the tax-free income ceiling for cash dividend income from stocks to Tk50,000, up from the current ceiling of Tk25,000.

“The Finance Minister is serious about reviving the morale of stock investors in the upcoming budget. A number of budget incentives are in the offing to streamline capital markets,” said a top NBR official. “The market (capital market) will act positively after the announcement in the proposed budget,” he hoped.

Officials concerned at the finance division under the Ministry of Finance said the subsidy outlay in the budget would be around Tk45,000 crore for the next fiscal year, up from Tk38,500 crore earmarked for the current fiscal year.

The highest subsidy amount of Tk9,000 crore is likely to be allocated for the agricultural sector, with some allocation expected to be earmarked for farm mechanization.

The budget is also likely to announce a one percent export subsidy for the apparel sector, in addition to the 4% now applicable for receipts coming from non-traditional markets. The amount to be earmarked is likely to be Tk9,000 crore, which is now around Tk3,500 crore. Presently, 26 export-bound items, including apparel goods, get export subsidies of anywhere between 2% and 20%.

In the current budget, export sector subsidies amount to Tk5,000 crore. Of the total, Tk500 crore is allocated for jute and jute goods.

The power sector subsidy is likely to be earmarked at Tk10,000 crore, and the energy (including LNG) sector is likely to get Tk9,000 crore.

The proposed budget is reportedly set to announce an incentive for foreign exchange remitters, as the government is desperate for more remittances to handle the foreign exchange demand to manage rising import payments.

A subsidy of 2-3% is likely to be offered in the budget for remitters. Under the planned scheme, recipients of remittance will get 2-3% extra local currency on the remitted amount. For this purpose, an amount of Tk3,000 crore will be allocated in the budget.