What after Fakhrizadeh assassination?

If the reports are true that Israel was involved in Mohsen Fakhrizadeh’s killing, the manner in which it was carried out – in broad daylight and without anyone being caught – shows again Israel’s tremendous capabilities, that is something Iran would be wise to take into consideration while weighing its next moves.

Friday’s assassination of Iran’s top nuclear scientist Fakhrizadeh led to predictable concern from those who prepared the Iranian nuclear deal in 2015. Former CIA head John Brenner was furious, “This was a criminal act and highly reckless,” he tweeted. “Such an act of state-sponsored terrorism would be a flagrant violation of international law and encourage more governments to carry out lethal attacks against foreign officials.”

Ben Rhodes, President Barack Obama Deputy National Security Advisor for Strategic Communications was indignant, “This is an outrageous action aimed at undermining diplomacy between an incoming US administration and Iran,” he tweeted. “It’s time for this ceaseless escalation to stop.”

Jeremy Ben-Ami of the left-wing J Street lobbying group was furious. “The assassination of a senior Iranian nuclear scientist appears to be an attempt to sabotage the ability of the incoming Biden administration to re-enter the Joint Comprehensive Plan of Action (JCPOA), as well as the chances of further diplomacy, either by limiting the political leeway of Iranian officials who want to restore the deal, or by triggering an escalation leading to military confrontation,” he said.

Each of these reactions pushed the same theme: whoever carried this out – and all fingers are pointed at Israel – intended to limit President-elect Joe Biden’s space for maneuvering and sabotage any possible diplomacy with Iran.

The unstated subtext of this type of criticism is the same, Prime Minister Benjamin Netanyahu still leading the way, trying to sabotage diplomatic efforts to solve the Iranian nuclear dilemma and undermine the Biden presidency from the get-go.

But that is wrong, the assassination of Fakhrizadeh is not about Biden, it is about Israel’s nearly three-decade effort to prevent Iran from getting a bomb. It is Israel trying to demolish a threat for its existence.

The assassination is just the latest in a series of steps over the last three decades taken to prevent Iran from getting the ability to do it. The killing of Fakhrizadeh will set back Iran’s efforts to attain the bomb because he was a key player in the nuclear program.

Iran has been unable to realize its nuclear ambitions up until now, though it has been trying since the end of the Iran-Iraq War in 1988, is not because of a lack of trying, or because they are any less capable than any of the other countries that have nuclear weapons. Rather, it’s because of actions that Israel and others in the West have taken over the years to bar their path.

These actions included setting up straw companies selling damaged goods to the Iranians so that when they would spin their centrifuges, they would blow up; computer worms and cyber sabotage; mysterious explosions; and assassinations.

Most people, when imagining how Israel might stop Iran from getting a bomb, imagine it will be via bombs or missiles falling from the skies, as was the case when Israel destroyed the Iraqi nuclear reactor in 1981, or the Syrian one in 2007. It has to be a new strategy and a new game plan in 2020.

Iran has been kept from reaching its nuclear goals through numerous actions, of which the killing of Fakhrizadeh is just the most recent one, through one big dramatic explosion. To present the killing of Fakhrizadeh as a move intended simply to make things more complicated for Biden is to fail to fully appreciate the degree to which the Israeli government genuinely believes a nuclear Iran is an existential threat that must be stopped at all costs.

The killing need not undermine the diplomacy that Biden might want to pursue. The hit was carried out under the outgoing Trump administration. If Iran does indeed want to turn over a new leaf with the new administration – which it is very much in its interests to do – then it would only be counterproductive to let this killing stand in the way.

Israeli perspective that the JCPOA is a non-starter because under its terms, Iran will be able to produce as much nuclear fuel as it wants in 2030 is worth noting. And as steps such as Friday’s assassination show, Israel – if it was involved – is not going to sit idly by and allow what it deems to be an existential threat to develop, regardless of who is the US president.

OPEC plus leaning towards oil cut extension

According to media reports, OPEC and allies (OPEC plus) are leaning towards delaying next year’s planned increase in oil output to support the market during the second wave of COVID-19 and rising Libyan output, despite a rise in prices.

OPEC plus was due to raise output by 2 million barrels per day (bpd) in January 2021, about 2% of global consumption as it moves to ease this year’s record supply cuts. With demand weakening, OPEC plus has been considering delaying the increase.

Russia is likely to agree on a rollover of current output for the first quarter if needed, a source familiar with the issue said, and would prefer to decide later on extending for the second quarter.

“It looks like the extension is needed,” the source said, citing “possible price drops and demand uncertainties” amid the second wave of the virus.

Oil has rallied in the past weeks, rising to its highest since March this year, near US$49 a barrel, on hopes that coronavirus vaccines will lead to higher demand. This hasn’t changed OPEC plus thinking around the extension.

 “This increase in prices is about sentiment, but we need to extend to have solid market fundamentals to support the prices,” said one. “So far, the best choice is the three-month extension.”

Still, enthusiasm for extended cuts is not universal, delegates and analysts say.

A potential complication is the United Arab Emirates’ wish for a higher OPEC plus quota, Goldman Sachs said this week.

Nigeria also wants a higher quota, and Iraq has talked about being exempt from 2021 reductions.

Goldman said it did not expect such a push from the UAE to derail the extension, and Iraq has said it will support any unanimous OPEC plus decision.

There are several technical meetings this week to prepare the ground for ministerial gatherings on Monday and Tuesday. All meetings are virtual due to the pandemic.

Christyan Malek, Managing Director and Head of oil & gas research at J.P. Morgan, said he expected OPEC+ plus to delay the increase by up to six months despite the price rally, with Saudi Arabia possibly offering deeper voluntary cuts until March next year.

“Inventories are not coming down as quickly as expected. Lockdowns are moving east to west, with more lockdowns expected in the US,” he said.

Malek said the departure of Donald Trump as US President, who was seen by some in OPEC as a friend after he helped bring Russian President Vladimir Putin into the OPEC plus output cut in April, would actually boost the producer alliance.

“Without Trump, OPEC plus is getting stronger rather than weaker,” he said. “Putin is using OPEC plus to get closer to Saudi Arabia, as the departure of Trump creates a bit of a vacuum in the US-Saudi relations.”

According to another report, Saudi Arabia and Russia summoned OPEC plus ministers who oversee their oil production cuts for last-minute talks on Saturday, as the cartel prepares for a decision on whether to delay January’s output increase.

A clear majority of OPEC plus watchers expect the group to maintain their supply curbs at current levels for a few months longer due to lingering uncertainty about demand. However, the decision is by no means certain amid public complaints from Iraq and Nigeria, and private discord with the United Arab Emirates.

The two leading members of OPEC and its allies, Russia’s Deputy Prime Minister Alexander Novak and Saudi Energy Minister Abdulaziz bin Salman, requested an informal video conference with their counterparts from the Joint Ministerial Monitoring Committee, which includes Algeria, Kazakhstan, Iraq, Nigeria and the UAE, according to a letter seen by Bloomberg.

The unscheduled gathering comes just two days before a full OPEC ministerial meeting on November 30, which will be followed by OPEC plus talks on December 01. The JMMC met online as recently as November 17, but that ended without any kind of recommendation about delaying the January supply increase.

On Thursday, Algerian Energy Minister Abdelmadjid Attar, who this year holds OPEC’s rotating presidency, told Bloomberg that the group must remain cautious because the recent surge in oil to US$45 a barrel in New York could prove fragile.

A separate meeting of a committee of OPEC technical experts considered data that pointed to the risk of a new oil surplus early next year if the cartel and its allies decide to go ahead with the production increase. The 23-nation OPEC plus is scheduled to ease its 7.7 million barrels a day of production cuts by 1.9 million barrels a day from January 01, 2021

Can Iran become a dependable source of copper for Pakistan?

Pakistan imports substantial quantity of refined/purified copper to meet its industrial demand. At present the metal is being imported from far-flung countries, costing huge freight cost. Pakistan can’t import copper from Iran due to the sanctions imposed on the country by the United States.

Production of copper cathode in Iran increased six percent during the first half of the current Iranian calendar this year as compared to the same period last year. Copper cathode output was recorded at about 139,900 tons during the period under reviews, while the budgeted figure was 130,015 tons. Monthly copper cathode production was 24,198 tons or 10 percent higher than the figure of the same month in the previous year.

Production of copper cathode this year is budgeted at 280,000 tons as against reported production of 250,000 tons last year.

In early May, four development projects worth slightly more than US$952 million were inaugurated in the copper sector of Kerman Province in the southeast of Iran.

The projects inaugurated in Khatoon Abad Copper Complex included increasing the capacity of copper smelting in the complex, building a copper concentrate storage, construction of a sulfuric acid production plant, and an oxygen supplying unit. 

By putting the first project into operation, the complex’s capacity for producing copper anode rose by 50 percent to 120,000 tons, and the country’s copper smelting capacity rose to 400,000 tons. This project created jobs for 120 persons.

The second project, which was the construction of a 60,000-ton storage facility, was implemented at the cost of about US$3.7 million plus three million euros, creating jobs for 250 people. The third project was valued at about US$17.8 million plus 100 million euros and the fourth one was put into operation at the cost of about US$4.5 million plus 31 million euros.

Iran has seen its copper exports doubled in the past Iranian calendar year despite a series of bitter sanctions imposed by the United States aimed at hampering the Islamic Republic’s trade of metals.

RCEP a wakeup call for the West

The Pan Asian trade pact between 15 countries including Japan, China, and South Korea, the Regional Comprehensive Economic Partnership, or RCEP is a wakeup call for the West, writes Lionel Barber, former Editor of The Financial Times.

With the US conspicuous by its absence, RCEP is the latest sign of a shift in economic power eastward. China's stunning third-quarter rebound from COVID-19 contrasts starkly with the relatively feeble recovery in Europe, where governments are still struggling with a second wave of the pandemic.

China has become the European Union's most important trading partner, a remarkable achievement given Beijing only joined the World Trade Organization 19 years ago. "China is catching up even faster," says Herman Van Rompuy, former Belgium Prime Minister, President of the EU council, and leading member of the European Policy Centre in Brussels.

Van Rompuy, a devotee and publisher of haiku poetry knows Asia well. He observes that China's rise and Donald Trump's "America First" protectionism has created a new term in the EU's political lexicon: strategic autonomy. Europe is eager to escape being sandwiched between the two superpowers, but "strategic autonomy" is more easily said than achieved.

First, the EU must judge where best to carve out freedom of maneuver. Should it focus on nurturing specific industrial sectors to create "European champions?" Or is it better to set standards like the General Data Protection Regulation, or GDPR, which are later adopted by the US and the rest of the world?

The EU has a far more developed internal trading bloc, the single market, than the RCEP model. But the single market, in turn, requires a "level playing field" that limits individual countries' discretion to subsidize sectors. Strategies aimed at protecting sectors against U.S. or Asian competition can therefore fall foul of EU rules on competition and the application of state aid.

Between 2014 and 2019, the European Commission antitrust authorities, led by the formidable Margrethe Vestager, blocked six mergers in six different sectors: telecoms, financial services, cement, copper, steel and, most notably, railways. In the last case, the Danish commissioner scuppered a combination between Siemens and Alstom to create a European champion to combat the rapid emergence of China's state-backed train maker CRRC.

The Chinese colossus, itself a fusion of two big rail equipment groups, had revenues of US$30 billion in 2017 and 12% of the worldwide market in trains, services, and signaling. Siemens and Alstom together would have sales of US$15 billion and about 9% of the market. Verstager's decision provoked outrage in Berlin and Paris, where mercantilist instincts go back to the late 17th century.

Diesel multiple units for Sri Lanka manufactured by a CRRC subsidiary at the dockyard in Qingdao: the Chinese colossus had 12% of the worldwide market in trains, services and signaling in 2017.

The political tides have, however, shifted since the outbreak of the COVID pandemic. Governments have been forced to provide billions of euros of financial aid to keep companies afloat. The state is suddenly in the front and center in the economy.

Second, the coronavirus pandemic has turbocharged the internet, highlighting Europe's digital gap with Asian countries. Most European governments have a long way to go to catch up with Singapore, Taiwan and South Korea in terms of data management for reliable tracking and tracing. The lag on the development and application of artificial intelligence compared to mainland China is even more serious.

Third, the brutal lobbying campaign by both China and the U.S. over the adoption of Huawei Technologies' fifth-generation, or 5G, superfast broadband technology was a sober reminder that Europeans had no technological alternatives. Huawei wiped out competition from the likes of Alcatel more than a decade ago.

Finally, there is the "British question." Having exited the EU (Brexit), the UK government has proclaimed the need for a new industrial policy. Prime Minister, Boris Johnson is insisting on maximum flexibility, without being bound by EU rules. Last week, he unveiled a 10-point plan to wean the economy off carbon, with state support for the wind industry and new nuclear plants. "We will make the UK the Saudi Arabia of wind," Johnson promised.

Continental Europe fears that an unfettered UK could use state aid to become a formidable competitor -- which is why the EU is playing hardball in the final phase of the Brexit negotiations on a future trade deal. Member states also want to draw on the 1.8 trillion euro summer rescue package for their pandemic-ravaged economies, including provisions for common borrowing on the bond market. This will include tens of billions of support for "strategic" industries, notably in digital technology.

Europe is also signaling the willingness for a closer relationship with the incoming Biden administration. In a speech this month, Ursula von der Leyen, EU commission president, said the US and Europe enjoyed power and influence "indispensable" to global cooperation. A common agenda would cover climate change, trade and digital issues -- including the taxation of big data giants like Amazon, Facebook, and Google.

Twenty years ago, European politicians employed similar heady rhetoric with the launch of "Agenda 2000" to make Europe "the most competitive, dynamic and knowledge-based economy in the world." Most of the goals were not achieved. The difference today is that China has become an economic force scarcely imaginable at the turn of the century. Europe cannot afford another lost decade.

Iran says won’t negotiate terms of JCPOA

Mahmoud Vaezi, Chief of Staff of Iranian President said, the nuclear agreement, formally known as the Joint Comprehensive Plan of Action (JCPOA) which was signed in July 2015, is not open to new rounds of negotiations. The negotiations were held in the past that led to the deal, Vaezi told reporters after a cabinet meeting.

Vaezi also said while Iran has welcomed US President Donald Trump’s defeat, but it is not optimistic about the US administration unless it acts differently.

“President Rouhani announced that if the other JCPOA parties return to January 20, 2017, the day Trump came to power, Iran is ready to step back to the same date as well,” the presidential chief of staff said.

Vaezi, who was a high-ranking diplomat in the Rafsanjani administration, said Trump has disturbed the international order and ruined international relations, including those in the Middle East. “He has put intense pressure on the Iranian people over the past three years,” he added.

Tensions soared between Tehran and Washington when Trump unilaterally withdrew the US from the JCPOA on May 8, 2018. The US president not only exited the deal but has since targeted Iran with a series of harsh economic sanctions Trump has called the sanctions his “maximum pressure” campaign aimed at forcing Iran to renegotiate the nuclear deal. However, Tehran has rejected renegotiating the terms of the deal.

Foreign Minister Mohammad Javad Zarif has insisted that “under no circumstances” would Tehran consider renegotiating the terms of the deal which was adopted as a UN Security Council Resolution.

“If we wanted to do that [renegotiate], we would have done it with President Trump four years ago,” Zarif told CBS News earlier this month.

Former European Union foreign policy Chief Catherine Ashton has said there will be resistance to further “asks” of Iran, especially if the US is not offering more in return.

“Yet the Iranians will be relieved to have survived the Trump administration’s ‘maximum pressure’ campaign and undoubtedly many will hope Biden’s election represents the opening of a new chapter,” Ashton wrote in an article published by Time magazine on Monday. “But there will be little appetite in Tehran to do more, if asked.”

She confirmed that until President Trump withdrew the US from the nuclear deal, Iran kept to its side of the bargain.

Ashton added, “Finding a way to get support in Congress will be challenging when, as things stand, the Democrats may not have control of the Senate. To put a revived JCPOA on firm foundations, he needs to be able to guarantee that if Iran sticks to its part of the bargain, the US will too.”

She also called on the incoming Biden administration to work with Congress, saying, “Returning to the JCPOA with only Presidential authority to keep it in place might work for the short term, but it is not a sustainable approach.”

Israeli mantra against Iran aimed at convincing Saudi Arabia to buy more arms

Saudi Arabia is vehemently denying normalization of relationship with Israel, but Iran is being projected a threat by Jerusalem, Riyadh and Washington. Analysts term Israeli mantra against Iran aimed at convincing Saudi Arabia to buy more arms. Over the years Israel has brainwashed the monarchy by constantly hammering, “Iran is a bigger treat as compared to Israel.

Following the weapons deal signed between the UAE and the US, many analysts have raised concerns that it would bring about a new cycle of arms proliferation in a region already flooded with weapons and where major powers have no reservations about using proxy groups to fight their wars.

With Iran being portrayed as a global threat by Jerusalem and Riyadh, the United States may once again succeed in making another large scale arms sale to the kingdom to tilt the power balance even further against Tehran.

Over the years, Saudi Arabia's appetite for weapons has grown and with normalization with Israel no longer being a pipe dream, the Kingdom will likely ask for something from Washington in return.

Though Washington has been selling billions of dollars military hardware to Saudi Arabia, the US has been bound to preserve Israel’s Qualitative Military Edge (QME) in the Middle East before selling any advanced weaponry to regional states.

But this summer, following normalization of relations between Israel and the United Arab Emirates, the administration of US President Donald Trump announced an arms package to UAE valued at almost US$23.4 billion, which includes F-35 stealth fighter jets, drones with anti-submarine warfare kits, stealth cruise missiles and more.

A March report published by the Stockholm International Peace Research Institute found that arms imports by states in the Middle East increased by 61% between 2015–19 over 2010–14. Saudi Arabia received 35% of all arms transfers to the region followed by Egypt (16%) and the UAE (9.7%).

American arms exports to the Middle East increased by 79% over the last decade and accounted for 51% of total US arms exports during 2015-19.

Last year the Institute found Middle East arms imports almost doubled in the previous five years, with Saudi Arabia becoming the world’s largest arms importer during 2014-18.

Arms sales to Saudi Arabia are nevertheless controversial, as the Kingdom has an atrocious human rights record and is leading an alliance of Arab states (including the UAE) in a war in Yemen. That war has sparked one of the worst humanitarian crises in the world and has led to dozens of countries imposing bans on arms sales to the Saudis.

But Riyadh imports most of its arms, such as fighter jets, tanks, missiles, advanced intelligence-gathering equipment and more, from the United States, and Washington has not imposed any restriction yet.

Not only are the Saudis’ arms purchases taking place against the background of war in Yemen, but Iran’s increasing hostility has led the Kingdom to procure more and more weapons.

With Israel giving Washington the green signal to sell the F-35 to the UAE, Saudi Arabia will likely demand the same. In addition to advanced precision missiles, Riyadh has also expressed interest in active protection systems for its armored vehicles, missile defense batteries, electronic interference systems and advanced radar and other detection systems. It might also want advanced armed drones like the MQ-9 Reaper drones and maritime weaponry.

Chabahar port of Iran an emerging hub of transit trade and foreign investment

Transit of goods through Southeastern Chabahar port of Iran has increased significantly in recent years due to offered incentives and the development of the port’s infrastructure. Loading and unloading figure have reached two million tons, while it was merely 200,000 tons just a few years ago. The port aimed at attracting regional markets that include India and Afghanistan as well as the Commonwealth of Independent States (CIS).

Iran's Ports and Maritime Organization (PMO) Deputy Head for Ports and Economic affairs said, transit of goods through Southeastern Chabahar port has increased significantly in recent years due to offered incentives and the development of the port’s infrastructure.

“A 70% discount on tariffs and lowering transit costs through Chabahar port have been so effective that Chabahar loading and unloading figure has reached two million tons, while it was merely 200,000 tons just a few years ago,” Farhad Montaser Kouhsari told IRNA. According to Kouhsari, many of the country’s neighbors are currently choosing Chabahar port as the main route to ship their imported and exported goods, as well as raw material.

He emphasized that the goal of the port is now to attract regional markets including India and Afghanistan, Iran's big trade partners, and also the Commonwealth of Independent States (CIS) which can use Chabahar port to transit their goods with an average of 70% discount.

Montaser Kouhsari went on to say that the costs of commodity transit through Chabahar have been lowered and at the same time the infrastructure of the port has been improved so that it could load and unload all varieties of goods in a reasonable time.

Although, Chabahar is not directly on the US list of sanctions, it has been affected by them, he said adding that the PMO has identified potential customers and various incentives are offered so that they choose Chabahar as their main base.

Chabahar is Iran’s only ocean port, which is located in the southeastern Sistan-Balouchestan Province near the Indian Ocean. The port provides unique opportunities for investment of the private sectors of Iran and other regional countries.

In line with the development of the port, five big projects were recently started. The projects include petrochemical storage reservoirs, a goods warehouse, two oil products tanks, and a decontamination terminal of trucks. Implementation of eight other big projects in the port is in progress as well.

Managing Director of Chabahar Free Zone Organization said that through implementation of development programs, this organization is preparing the ground for the attraction of investors. Abdul-Rahim Kordi said these programs are creating trust for the investors in the zone.

Located on the coast of the Gulf of Oman in Iran’s southeastern Sistan-Baluchestan Province, Chabahar is the country’s only oceanic port and given its strategic location in the International North-South Transport Corridor (INSTC) development of the port is of high significance for Iran. The government has some major projects to create multi-dimensional transportation facilities in this port.

In addition, Chabahar Free Zone has been suggested as a transit and logistic gateway for Iran's domestic market which, while reducing the cost and time of transportation it has also provided profitable economic opportunities in the development of logistics facilities. It is a multi-purpose zone with educational, industrial, tourism and transportation sectors.

Chabahar Free Zone Organization has a plan for the development of specialized industrial parks with the participation of the private sector in the fields of industry, logistics, education, healthcare, tourism, etc., which the establishment of logistics industrial park is followed in the framework of upstream programs and documents.

At present Chabahar Free Zone is considered as a transit gateway in eastern Iran and based on national plans and also the interest shown by international parties, it is noteworthy as a center for providing logistics support, transportation and transit services.

Chabahar Free Zone with the aim of facilitating trade and minimizing transportation costs and focusing on services has allocated 150 hectares of land to create a logistics industrial park. This industrial park will be assigned to the international investors and or Iran-foreign joint venture.

Considering the geographical location, this industrial park can be connected to the Chabahar railway and will be established to have full support services. Centers such as public warehouses, cold storages, special warehouses for storing liquid and bulk goods, container warehouses, required laboratories, as well as personnel service facilities have been predicted.

Chabahar-Zahedan railway is expected to become operational in the next Iranian calendar year (begins in March 2021). Keeping in view the important role that the free zones play in promoting the country’s export and employment, Iran is seriously pursuing development of its existing free zones and establishment of new zones as well.

More development measures in this field have been taking since the US re-imposition of sanctions on the Iranian economy in November 2018, as Iran is reducing its dependence on the oil income, while elevating its domestic production and non-oil exports.

Although, the sanctions have disrupted Iran’s economic activities, they could not impede the development of Iranian free zones; in fact, the development of these zones has been even accelerated. Many strides made for increasing activities in the free zones have played a significant part in boosting the country’s non-oil exports and brought prosperity in the other economic sectors.