Iran Seizes Korean Tanker

According to Bloomberg, Iran has seized a South Korean-flagged oil tanker in the Strait of Hormuz. The Islamic Revolutionary Guard Corps said it detained the Hankuk Chemi vessel on Monday “due to repeated violations of marine environmental laws.”

Concerns of further conflict have grown in the final weeks before Joe Biden takes over in Washington, especially around the recent assassination of a top Iranian nuclear scientist and this week’s first anniversary of the killing of the country’s leading general.

“In the short run, these tactics run the risk of turning into a just cause for war in the waning days of the Trump administration, and in the longer run can poison the well with Biden’s team,” said Ali Vaez, Director of the Iran Project at the International Crisis Group.

That announcement came shortly after Washington decided to keep the USS Nimitz in the Persian Gulf because of “recent threats” from Iran’s leaders against Trump. The aircraft carrier had been set to leave the region.

South Korea has sent an anti-piracy unit to the strait, the Seoul-based Yonhap News Agency reported, citing the country’s Defense Ministry. The Hankuk Chemi’s operator denied it had broken any environmental rules.

The vessel was carrying 7,200 tons of petrochemicals from Jubail in Saudi Arabia when it was intercepted, the IRGC said. The guard corps took it to Bandar Abbas port in Iran, the semi-official Fars News Agency said. Crew members from Korea, Indonesia, Vietnam and Myanmar were arrested, according to Iran’s Tasnim News Agency.

Relations between Tehran and Seoul have been strained since the United States re-imposed tough sanctions on Iran and banned countries, including major Asian customers, from buying its petroleum.

Iran says it has at least US$7 billion from oil sales trapped in South Korea and the money is needed to purchase humanitarian goods, including coronavirus vaccines. Seoul’s deputy foreign minister was scheduled to visit Iran to discuss the trapped funds, a spokesman for Iran’s Foreign Ministry said just before the tanker was seized.

South Korea is not a member of the International Maritime IMSC Security Construct (IMSC), a maritime force created in 2019 in response to Iranian attacks and to protect sea lanes in the Middle East. Seoul has previously indicated a willingness to work with, though it has not requested assistance from the alliance so far, said an IMSC spokesman.

The Hankuk Chemi was sailing to the United Arab Emirates port of Fujairah after loading at Jubail, according to ship-tracking data compiled by Bloomberg. It veered off course in the Strait of Hormuz, a narrow stretch of water between the tip of Oman and Iran, and headed toward Bandar Abbas.

UK Maritime Trade Operations, which serves as a link between the Royal Navy and commercial vessels operating in high-risk areas, said there had been “an interaction” between a merchant vessel and the Iranian authorities in the Strait of Hormuz between 6:15 a.m. and 7:33 a.m. London time.

The U.S. Fifth Fleet, which is based in the region, is “monitoring the situation,” spokeswoman Commander Rebecca Rebarich said.

Year 2020 has changed our lives for ever

It has truly been a year like no other, with the pandemic dominating not just every news cycle but each of our lives. From work to family life, where we went, and what we did, nothing was untouched by COVID-19. But as people got used to phrases like “self-isolate” and “social distancing”, there were plenty of other news too. 

Coronavirus

The year began with a new virus originating from Wuhan, China. Wei Guixian, a 57-year-old shrimp seller, is thought to have been the first person infected. “Every winter I always suffer from the flu,” she later told Chinese media. “So I thought it was the flu.” We now know it wasn’t. COVID-19, as it has since been named, first took hold in the Chinese city then swept the globe. In Wuhan, some citizens have decided to sue the government for what they believe was suppression of the news in the early days of the virus. By January, the first case was in the UK and by March the world witnessed lockdown, focused on maintaining distance and washing hands repeatedly. As cases mounted across the world, there were unexpected issues, like those who wanted to believe that Covid-19 was in fact a hoax. As well as the terrible human cost, with tens of thousands dead in Britain and more than 100,000 still suffering with long-term effects, the pandemic has delivered the largest economic shock to the UK in three centuries – and it isn’t over yet. But with a vaccine now being given to the most vulnerable, even with Christmas plans derailed by another surge, there is still hope for 2021.

Brexit

When Boris Johnson won last December’s election, he succeeded on a series of slogans. First up was to “Get Brexit Done”, which he did, taking Britain out of the European Union on 31 January. After that, it gets a bit more tricky. He pledged to “level up” the country, and, after coronavirus hit, suggested a “Rooseveltian approach”, invoking FDR’s New Deal, though there’s little sign much has changed yet in the “red wall” seats the Tories took from Labour. However, the most pertinent of his soundbites now appears to be the promise that he had an “oven-ready deal” with the EU over Brexit. With time running out, there’s still no trade deal in sight. In the pantheon of prime ministers, Johnson’s currently far from the top of the pile after a whirlwind 12 months. But falling at the final hurdle with Brexit could make things far worse for both the prime minister’s legacy and, more importantly, the country.

US politics

Even by the standards of Donald Trump’s presidency, 2020 has provided some eye-opening moments. Questionable presidential pardons were perhaps to be expected, as were outrageous election claims. Suggestions of injecting bleach into the body to stop coronavirus, on the other hand, were not something anyone expected of a president. As 2020 progressed, the protests in the wake of George Floyd and Breonna Taylor’s deaths took hold across the United States and with them questions over the response from heavy-handed police. Along with coronavirus, it became the big issue of American politics, neither of which Trump had any real solution too, other than to stoke flames. By summer, the Republicans were already preparing for life after Trump. Stuck in campaign mode, the president pressed on, maskless, with rally after rally, and even planned to go ahead with a Republican convention as normal. Now, with Joe Biden set to come into power in a few weeks, the question is how much havoc Trump can wreak before leaving the Oval Office – and what he does next.

Climate crisis

The year began with bushfires blazing across Australia, killing 500 million animals and more than a dozen people, with acres upon acres left scorched in their wake. But it could end on a hopeful note, as the UK looks ahead to hosting the Cop26 climate summit in November. Joe Biden’s election, and his pledge to sign the US up to the Paris Agreement again, will surely help – with climate an issue that could bring him together with British leaders. In the UK, the government’s independent climate advisers have put together recommendations for how the country can limit its carbon emissions to keep temperatures down, and it’ll take more than sending fewer emails. Instead, they say that by 2050 almost every element of our lives will have to change, from the cars we drive to what we eat, if we’re to reach net-zero emissions. But can it really be done while building a third runway at Heathrow airport?

Arabs Israel relations

Many countries have established diplomatic relations with Israel in quick succession. The decision to establish diplomatic relations by itself cannot create alliance. In case of the Arab world, the matter is different. Within each country, there are factions that are hostile to Israel. Any regime that opens relations with Israel will have to face this reality. Each state that has recognized Israel has broken a barrier. Among many Arabs, it is a violation of a fundamental principle. This process, which began with the UAE, is rooted partly in the US Middle Eastern policy that has played an important role in implicitly endorsing the process and occasionally adding a sweetener. The US also made it clear that it was withdrawing its forces from the region and reducing its commitments. That left the region without the power that held it together. These countries could and did work together, but only through secret contacts and US coordination. Without the United States, each state was left to either go it alone or form meaningful relations on the whole. The US policy forced the countries of the region to face a reality they had tried to hide.

Iran may avenge Soleimani killing after Joe Biden takes over as US President, says Former Mossad Director Shabtai Shavit

Two former Mossad chiefs and a former national security council chief all said on Sunday that Iran had failed to avenge the assassination of one of its most senior officials in 2020 and likely would not do so prior to US President-Elect Joe Biden taking office. However, they all told The Jerusalem Post that the Islamic Republic would eventually find a moment to avenge the killing of Islamic Revolutionary Guard Corps Quds Force Chief Qasem Soleimani exactly one year ago. Former Mossad director Shabtai Shavit told the Post that, “the Iranians’ patience is never-ending.”

Shavit said that the killing of Soleimani in January 2020 along with the assassination of Iran military nuclear program Chief Mohsen Fakrhizadeh in November was “a double blow against its military activity in the Middle East” which it has not recovered from.

The Mossad Chief during 1989-1996 said that Esmail Ghaani who replaced Soleimani “isn’t at a level even close to the same capabilities and importance and managerial ability.”

Whereas Shavit said there is a continuous debate about whether assassinations make sense, he said in the cases of Soleimani and Fakrhrizadeh, there was no doubt.

“Some say they are not useful because one goes and the next one comes into line and replaces him…the level of talent of the one who entered his [Soleimani’s] shoes disproves that argument,” said the former spymaster.

In terms of retaliation, Shavit said that even though Tehran has not successfully retaliated in a big way so far (it did fire missiles on US bases and has failed at some other attempted plots), “we must take into account that they will respond. They will wait for an opportunity to attack a high quality target.” He gave the example of Iran and its proxies’ attacks on the Israeli Embassy and Jewish Community Center in Argentina in 1992 and 1994.

Questioned if his example meant he believed Iran would attack Israel or Jewish targets outside of the Jewish state, he responded, “When they do an operation, they use the strategy of deniability. This way, legally no one can bring them to court, but publicly everyone knows they did it.”

Former Mossad director Danny Yatom told the Post, “the assassination [of Soleimani] was a very impressive one of strategic value covering the full field with Iran.”

Yatom said, Soleimani, “was much more than just the leader of the Quds Force. He was more important than the commander of the IRGC who supposedly was his commander. He was very close to the supreme leader” Ayatollah Ali Khamenei.

The former Mossad chief from 1996-1998 said that the death of Soleimani was “a harsh blow to both morale and actual operations…the Quds Force is still licking its wounds.”

Yatom said that “since Ghaani relieved Soleimani, there is a feeling that the Quds Force still hasn’t returned to the status it had before the killing and I doubt if it can get back.”

“There are reports that Iran is looking for the chance to attack an Israeli target or an American target. I don’t say that it is impossible…but they have waited a full year and have not succeeded to avenge one of the most important people in Iran,” he said.

He explained that, “this teaches us about the weakness of the Quds Force and of the IRGC today now that they don’t have Soleimani.”

Yatom added that, “even under his [Soleimani’s] command, attempts directly against Israeli territory itself were not successful,” including years in which he tried to create a capability to attack Israel using Shi’ite militias on the Syrian side of the Golan.

Former National Security Council Chief and Maj. Gen. (res.) Giora Eiland said at a virtual Jerusalem Press Club event that Iran has, “no interest today in resuming a large-scale confrontation with anyone, especially not with the US in the next two weeks before the transition of the presidency.”

“So I don’t think anything dramatic will happen in the next few days or hours just because it is the anniversary of the death” of Soleimani, said Eiland. He continued, “But Iran feels that at some point, it will have to retaliate, if not against the US, then against Israel or Israeli interests.” Like Shavit, Eiland mentioned Iran’s proxies worldwide, including in South America, which could attack Israeli and Jewish targets that are less well-defended than Israel itself.

He added that, “They would probably prefer to do it after Biden takes over. Trump is unpredictable,” and the Islamic Republic is hoping they can lure Biden into rejoining the 2015 nuclear deal at a low price.

Despite heightened threats surrounding the one-year anniversary of Soleimani’s death, he said both sides have taken actions to reduce friction, such as the US moving an aircraft carrier out of the area.

Shavit concurred, saying that, “they won’t forget to retaliate. Maybe the timing will be not when they are in negotiations with the Americans…They would be foolish to carry out an attack [during negotiations] just because they have an opportunity. But they are very shrewd people, you can’t underestimate them.”

Further, Shavit warned that even if the assassination of Soleimani worked this tool for fighting enemies must not be overused.

He said it could only be used for a very high quality target whose removal achieves a major purpose or there could be a danger of Israel losing some of its own ethics and humanity as well as facing increased global criticism.

Eiland warned that Israel still needed to watch out for “a cloudy Saturday morning when [mainland] Israeli targets may be attacked by cruise missiles from Iran, Iraq, Yemen, or with ballistic missiles from Hezbollah.”

US Spending Bill Offers Five Gifts to Israel

An enormous US spending bill that accompanied the COVID-19 relief package contains many financial and political perks for Israel. The US Congress passed an enormous US$2.3 trillion spending bill including foreign aid in billions of dollars to Israel.

Social media posts stating that Israel was receiving coronavirus stimulus money sparked outrage, especially since average Americans will only be getting a modest sum of US$600.

In reality, while assistance to Israel is included in the legislation, it is part of the so-called omnibus spending bill, which covers Pentagon funds; it is not COVID-19 related. Still, the bill offers political and financial gifts to Israel at a time of increased domestic and international scrutiny over Israel's human rights record.

While some of the pro-Israel provisions in the 2021 spending legislation have appeared in previous bills, the fact that they passed again un-amended signals the uncompromising support the Israeli government still enjoys in Congress ahead of the inauguration of President-elect Joe Biden later this month. Below are five rewards for Israel in the spending bill.

Military aid

Authorizing the usual annual aid with no strings attached, the bill allocates US$3.3 bn in military assistance to Israel, to be dispensed in the next 30 days. The law specifies that funds must be spent to purchase weapons and defence systems sold by the US government.

An additional US$500 million is allocated to Israeli cooperative programs, a Pentagon-funded initiative to bolster Israel's missile defence systems' capabilities, including the Iron Dome. 

The approval of the assistance comes despite more than a dozen US lawmakers threatening to impose conditions on aid to Israel over its plans to annex large parts of the West Bank and its ongoing occupation and settlement expansion in the Palestinian territories.

"Members of Congress should not be expected to support an undemocratic system in which Israel would permanently rule over a Palestinian people denied self-determination or equal rights," the letter, led by Congresswoman Alexandria Ocasio-Cortez, read at the time.

Defunding UN Human Rights Council

The legislation calls for withholding US funds from the UN Human Rights Council "unless the Secretary of State determines... that participation in the Council is important to the national interest of the United States and that such Council is taking significant steps to remove Israel as a permanent agenda item".

This particular provision has consistently appeared in omnibus spending bills. But President Donald Trump already pulled Washington out of the UN Human Rights Council in 2018, citing what his administration called "bias against Israel".

President-elect Joe Biden has pledged to re-engage in multilateral agreements and international bodies that Trump abandoned; at the same time, his designated Secretary of State Tony Blinken said earlier this year that the administration would oppose "singling out" Israel at the UN.

Encouraging normalization

The legislation instructs the president and secretary of state to work to ensure normalization between Israel and Arab countries. "All Arab League states should normalize relations with their neighbor Israel," it says. It also condemns the Arab League's boycott of Israel, calling on the administration to take "concrete steps" to demonstrate its rejection of the boycott. 

The President and the Secretary of State should continue to vigorously oppose the Arab League boycott of Israel and find concrete steps to demonstrate that opposition by, for example, taking into consideration the participation of any recipient country in the boycott when determining to sell weapons to said country," the legislation says. 

The bill comes at a time when the UAE, Bahrain, Morocco and Sudan have agreed to establish diplomatic ties with Israel. 

Abu Dhabi was rewarded for normalization with a mammoth weapons deal, including killer drones and F-35 fighter jets, despite growing concerns over its human rights record and military involvement in Yemen and Libya.

Legislators also take a page out of Trump's "peace to prosperity" framework that focuses on the economic benefits of normalization between Israelis and Palestinians.

"Congress encourages cooperation between Palestinian, American, and Israeli business sectors in order to benefit the Palestinian, American, and Israeli peoples and economies."

Conditions on Palestinians

The same legislation that hands Israel billions of dollars without any mention of Israeli policy imposes stern conditions on assistance to the Palestinian Authority.

The bill prohibits aid to Palestinians if they unilaterally seek member-state status in UN agencies unilaterally or pursue International Criminal Court charges against Israeli war crimes.

Moreover, the bill instructs the administration to work to prevent so-called Palestinian "incitement" against Israel. 

"Not later than 90 days after enactment of this Act, the Secretary of State shall submit a report to the appropriate congressional committees detailing steps taken by the Palestinian Authority to counter incitement of violence against Israelis and to promote peace and coexistence with Israel," it said.

Conditions on UNRWA funding

Although Trump halted US funding for UNRWA more than two years ago, the 2021 spending bill included a recurring passage from previous years calling for imposing conditions on funding to the UN agency for Palestinian refugees.

The bill calls for a report from the secretary of state ensuring that the agency and its employees, most of whom are Palestinians, adhere to "policies on neutrality and impartiality".

The report must also certify that the agency is "taking steps to ensure the content of all educational materials currently taught in UNRWA administered schools and summer camps is consistent with the values of human rights, dignity, and tolerance and does not induce incitement."

Biden has vowed to restore US assistance to Palestinians, including the aid to UNRWA. 

The incoming president can issue waivers to bypass the provisions of the spending bill, which had appeared in previous legislation when the assistance was ongoing. But the language in the law highlights the political challenges that Biden may face in undoing some of Trump's policies towards Israel.

 

Can Abraham Accords lead to more peace deals with Israel?

It was hard to predict in January 2020 that, by the end of the year, Israel would have relations with four more Arab countries. In Israel, January’s news cycle in some ways looked the same as today’s – the country was heading toward election in a March, but the diplomatic agenda was drastically different.

There were three big stories: 1) Naama Issachar, the Israeli woman in a Russian prison for alleged drug smuggling; 2) preparations for the Fifth World Holocaust Forum, which brought leaders of 49 countries to Israel; and 3) speculation about the Trump peace plan, which came out at the end of the month. A week later, Prime Minister Benjamin Netanyahu’s trip to the White House to hear about the peace plan, along with a quick stop over in Moscow to give Issachar a ride home, there was a small hint at what was to come.

Netanyahu went to Uganda, ostensibly on a regular diplomatic visit to Africa of the kind the prime minister has made before, but there was a surprise, Netanyahu met with Sudanese leader Abdel Fattah al-Burhan. Sudan authorized Israel to fly over its airspace, shortening flights to South America, but in the ensuing days, Burhan said this was not a step toward normalization.

A week and a half later, Jason Greenblatt, who had resigned months earlier from his position as US President Donald Trump’s envoy to the Middle East, announced that he was “very inspired” by ties between Israel and Gulf states and planned to promote them – but still said time was needed for them to move into the open. Meanwhile, the Trump peace plan train was chugging along, with the emphasis on application of sovereignty, as its supporters called it, or annexation, as its detractors said.

Netanyahu promised in one campaign speech and statement after another that he would take the plunge, with the Trump “Peace to Prosperity” plan supporting Israeli sovereignty over up to 30% of the West Bank, including all settlements and the Jordan Valley. Blue and White leader Benny Gantz made statements that were vague enough to make voters think he may support annexing the Jordan Valley, as well.

But COVID-19 got in the way, and the plan could not be implemented as speedily as Netanyahu intended. Whether he ever intended to extend Israel’s sovereignty or not is a matter of great debate, but he certainly spoke and, to some extent, behaved like he did. Israel and the US established a committee to draw an annexation map, and it met a couple of times, but didn’t get very far. At the time, senior US sources said talks between Jerusalem and Washington were much more focused on joint coronavirus policy than anything else, and those kinds of comments continued even after a so-called unity government between the Likud and Blue and White was formed. A clause in the coalition agreement said Netanyahu could bring sovereignty moves to a cabinet vote in July.

That unity coalition was anything but united, and the Trump peace plan was one of many areas where Netanyahu and his partners didn’t see eye to eye. Gantz, who was defense minister at that point, and Foreign Minister Gabi Ashkenazi spoke enthusiastically about the Trump plan – but they wanted it all, as a whole. The plan itself would have allowed for Israel to extend its sovereignty as a first step, so what they were really saying was they needed major adjustments. Ashkenazi especially worked to block the annexation element. Netanyahu had the votes in the cabinet to push it through without Blue and White’s support, but the Trump administration wanted a more united Israeli front.

In June, the world was watching Israel to see what its next steps would be, in swooped United Arab Emirates’ Ambassador to the US Yousef al-Otaiba. In an op-ed for Yediot Aharonot, which in and of itself was a unique event, Otaiba dangled the possibility of normalization of ties between Abu Dhabi and Israel if the latter would drop its annexation plans.

Since 2015, there had been more and more steps, public and secret, toward ties between Israel and Gulf states, including intelligence sharing and cooperation in combating the Iran nuclear threat, ministers and other officials visiting the United Arab Emirates and Bahrain, Israeli athletes participating in sporting events in Arab states, and tens of thousands of Israelis touring Morocco each year. But these were gradual and had been happening for years. While Netanyahu and some other politicians talked openly about warming ties with Gulf States, the statements were vague.

So Otaiba’s op-ed, offering what he called the “carrots” of greater normalization and expanded ties in the Middle East, came as a surprise to many observers of the Middle East – though apparently not to Trump’s peace team. Looking back at Greenblatt’s statements and remarks by Trump’s Senior Advisor Jared Kushner, it seems they were hinting at what was coming all along and what seemed like bluster or campaign rhetoric from Netanyahu was the real deal. Kushner and Avi Berkowitz, who replaced Greenblatt, saw an opportunity in what Otaiba wrote, and jumped on it.

July 1 came and went without any sovereignty moves and very little talk on the matter. There was an oblique reference here and there by Netanyahu and US Secretary of State Mike Pompeo, but no movement. And then came the moment that changed everything, A phone call between Trump, Netanyahu and Abu Dhabi Crown Prince Mohammed bin Zayed Al Nahyan, leading to the announcement of peace on Trump’s Twitter account. The deal was called the Abraham Accords, named after the forefather of Jews and Arabs.

The love affair between Israelis and Emiratis began immediately. There was an effusive outpouring of support and excitement on social media from regular people in both countries. On the diplomatic level, the governments immediately took action to make normalization a reality. Less than two weeks later, the first-ever Israeli delegation to the UAE landed in Abu Dhabi, led by National Security Adviser Meir Ben-Shabbat. Israeli flags waved in the airport where an El Al plane landed in Abu Dhabi for the first time.

The ensuing months have brought a flurry of business, cultural and diplomatic exchanges, and, of course, many thousands of Israeli tourists in Dubai this month, when the UAE was one of the only “green” countries Israelis could visit without having to quarantine when they arrived home.

Even the talk of a deal to allow the UAE to buy F-35 planes could not mar the excitement. The US, Israel and the UAE have all said that the fighter jets were not part of the peace deal and never came up between the two Middle Eastern countries. At the same time, the US and UAE pointed out that Israel lifting its opposition to the sale – after Gantz met with his American counterpart and they reached an arrangement that satisfactorily maintained Israel’s qualitative military edge – was what greased the wheels on something the UAE had been seeking for the past six years.

Over the last few months, the world has seen a veritable domino effect. It took the UAE’s courage to be the first Arab country in decades to take the plunge and establish diplomatic relations with Israel to inspire more to follow. Bahrain’s announcement came less than a month later, and its foreign minister took part in a peace-signing ceremony at the White House a few days later.

In mid-October, Ben-Shabbat led another delegation, this time to Manama. The Bahrain peace deal didn’t come with any strings attached to date, and has been purely about normal diplomatic and business ties, which have moved at a rapid pace, as with the UAE. The next two dominoes to fall were Sudan and Morocco, but in a somewhat different way. In both cases, ties with Israel came together with a major shift in US policy in favor of those countries.

Normalization with Sudan is highly symbolic for Israelis. Khartoum was the site of the Arab League’s “three noes” of 1967: no negotiations, no recognition, no peace with Israel. For Khartoum to overturn those three is truly momentous. The business opportunities in Sudan are fewer for Israelis, but Israel has already offered help in the areas of agriculture, water use, solar energy and more.

For Sudan, the normalization story was something else entirely. The announcement of steps toward ties with Israel came in late October, after pressure from Pompeo during negotiations to remove the African state from the US list of state sponsors of terrorism. That removal came over a year and a half after Sudanese dictator Omar al-Bashir was removed and Burhan, a Sudanese Army general, and civilian leader Abdalla Hamdok formed a government aimed at transitioning toward democracy. Getting off the list will likely drastically help Sudan’s economic recovery and access to international aid.

While the US denied making an ultimatum – recognize Israel or you stay on the list – it’s clear that Khartoum felt serious pressure. Hamdok was opposed to ties with Israel, while Burhan was more in favor – after all, he had met Netanyahu already – and both realized it was risky while their country’s situation was so shaky, but in the end they did it. Normalization with Israel was a small step to take toward something that was much bigger and more important for Sudan.

The same could be said about normalization between Israel and Morocco, announced in December. In King Mohammed VI’s announcement, a few short bullet points on renewing diplomatic relations with Israel came after seven lengthy paragraphs on the Trump administration’s agreement to recognize Moroccan sovereignty over Western Sahara. That recognition is the big prize Morocco wanted.

If the king had not been holding out for a big prize – as he saw Sudan and to some extent the UAE received – ties with Israel would have been easy. Israel and Morocco had secret ties, including intelligence sharing, for decades, and partial diplomatic relations in the 1990s. Those relations were officially suspended in 2000, but some level of ties has always continued, and many Israelis visit Morocco each year.

Still, since a million Israelis have roots in Morocco, and many have fond, positive feelings for the country and its royal family, this move was celebrated in Israel. And Morocco’s tourism minister expects 200,000 Israeli visitors a year, post-corona.

With 2020 behind us and 2021 beginning, there is discussion of even more dominoes falling, and even more countries joining the Abraham Accords. Trump administration officials have said they’re working to even make it happen in the next three weeks, before President-elect Joe Biden takes office.

Mauritania, Oman and Indonesia are the names on Israeli and American officials’ tongues these days, which makes sense, because Israel has or has had some level of ties with all of them.

Mauritania declared war on Israel in 1967, but the countries established diplomatic relations in 1999, which were suspended in the wake of Operation Cast Lead in 2009.

Former prime minister Yitzhak Rabin visited Indonesia, the most populous Muslim country, and thousands of Israeli and Indonesian tourists visit each other’s countries each year.

Netanyahu visited Oman in 2018, and Israel and Oman are part of the anti-Iran axis in the Middle East.

But the big hope is for Saudi Arabia. This is where Biden comes into play. Biden and his foreign policy advisers have spoken positively about the Abraham Accords, without commenting on the strings attached. At the same time, they have been very critical of Saudi Arabia’s human rights record. If the Trump administration doesn’t find a way to quickly make it worth Riyadh’s while in the next few weeks, which seems unlikely, MBS and King Salman will probably wait to see what benefit they can exact from the Biden administration to go with peace with Israel. After all, the thought is, why shouldn’t they get something out of the deal, as the UAE, Sudan and Morocco did?

A very senior official told The Jerusalem Post that Riyadh is expected to get on board in 2021. Netanyahu and MBS met in the Saudi city of Neom weeks ago. Salman is still reticent on the matter, holding on to the Arab Peace Initiative, also known as the Saudi Initiative, which requires peace with the Palestinians before normalization with the Arab League.

Looking ahead at the unfolding 2021, it seems likely that the Abraham Accords domino rally will continue, and it seems almost inevitable that it will feature the biggest coup of all, Saudi-Israel peace. But if there’s anything we learned from 2020, it is that January can be drastically different from December in ways we never expected.

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

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

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

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

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

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

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

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

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

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

China and Russia emerging key players of energy markets

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

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

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

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

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

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

China Iran joint drilling

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

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

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

Iran-Russia

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

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

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

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