… by Alexander Orlov, …with New Eastern Outlook, Moscow
[ Editor’s note: Mr. Orlov has a great article for us today on Obama’s trip to pow wow with the Saudi King. It is a sad story in some ways, as once again the US finds itself in a tangled relationship.
The initial strategy was to make the Saudis dependent on the US (totally), the pendulum on that situation has swung back. Now we see the US dependent upon the Saudis.
That is why our Founding Fathers warned us of foreign entanglements. And it seems today that these are a main goal of our foreign policy.
The situation reminds me of Thomas Jefferson’s memorable line about slavery, that it was like holding a wolf by the ears. You want to let it go, but then again… you are afraid to. Israel comes to mind on that note, also.
It is nice to see a Russian writer who can write about the Gulf Energy exports through a northern Syrian pipeline. Western media writers don’t seem to be allowed to touch that. The people might think our military was being used as muscle for commercial business interests owned by our elites. Oh heaven forbid!
And then of course, no one will talk much about what that pipeline might pick up as it passes over the Eastern Med off shore fields. We hear so little about those reserves you would think they were on the moon… but they are not.
Would European leaders be willing to use terrorists to help kill countless Syrians and put millions more into tents and destroy their country to save Europe’s hanging-by-a-thread economies by bringing low cost gas in from the Gulf? You bet they would, in a New York minute… Jim W. Dean ]
– First published April 2, 2014 –
The deterioration of the situation in Ukraine changed the agenda of talks between U.S. President Obama and Saudi leadership on March 28 in Riyadh.
The main subject of the discussion included the situation around Ukraine, possible joint steps to decrease energy prices to weaken Russia’s economy, promotion of Iran’s moving to a more pro-Western position to weaken Tehran’s cooperation with Moscow, and finally about Syria and the situation in the GCC.
Obama’s support of the coup in Ukraine and the tough American opposition towards Russia in Ukrainian affairs, led to Washington developing the idea of urgent mobilization of the resources of its rich Arab allies to oppose Moscow. This is because the U.S. and its allies in NATO and the EU had no financial or political leverage for exerting pressure on Russia.
This explains the White House’s urgent need to revive its relations with those major Arab partners, with whom they have recently not been close.
Athough Riyadh and Washington had differences in the approach to some international and regional issues, the two countries reduced neither their energy nor military cooperation, as well as intelligence interactions in the war being conducted by the United States and the Kingdom of Saudi Arabia against Iran and Syria.
The White House decided to try to form a united front with the leading country in the Arab world against Moscow, and to neutralize Tehran at the same time.
In the course of the conversation, Obama suggested that the Saudi dynasty “take vengeance” on Russia for Crimea by making strikes on three fronts. Strike Syria, in order to take it out of the orbit of influence of Moscow and Tehran, and to put the whole Levant under the U.S. and Saudi control.
Second, to provide financial assistance to the new government in Kiev, in order to make Ukraine an outpost of anti-Russian activity. Third, to decrease oil and gas prices significantly, which would be a serious blow to Russia’s state treasury, and to achieve substantial reduction in the consumption of Russian oil and gas by the West.
Obama cannot act in any of these areas without Riyadh, especially in terms of using the “energy weapon” against Moscow. In exchange, Obama offered to “give a free hand” to the KSA in the Middle East and the Persian Gulf.
The more so, now that Riyadh has been granted the right to build a special relationship with Egypt after the overthrow of Mursi’s government.
The U.S. and the West have turned a blind eye to the crushing of the protests of Shiites in Bahrain and the Eastern Province of the KSA. The Saudis received the right to carry out an operation to “subdue” Qatar and to defeat the Muslim Brotherhood.
Additionally, the White House has authorized Riyadh to work on the question that is the most important issue for it and Israel, i.e., the Israeli-Palestinian settlement, by giving the Saudis the green light to work with Jordan, which now has a special role in the new scheme to settle the Palestinian issue.
Above all, the rulers of the KSA want Assad’s regime to be destroyed and America to help stop the growing influence of Iran, as well as to form a “Shiite Arc” in the region. Only then can Riyadh recover from the strongly shaken position of the kingdom in the Islamic world.
The overthrow of Assad and capture of Damascus by the pro-Saudi Islamist opposition in Damascus are the only things that can strengthen the position of KSA as a leader among the Arab states. This would allow the implementation of its plans for further regional expansion – from establishing a Jordanian-Palestinian federation to the formation of an anti-Shiite league from the Arabian Peninsula to India.
In addition, the Saudis have their own logic here, since Syria can play a key role in supplying Qatari gas to Europe. In 2009-2011, Damascus was the main geographical obstacle to the implementation of a project for the construction of a pipeline from Qatar’s North Field to the EU, which would have allowed a strike at “Gazprom”, via a sharp increase in supplies of cheap Qatari gas to Europe.
For various reasons, Damascus did not consent to laying of a gas pipeline through its territory from Qatar to Turkey and the Mediterranean coast of the SAR for further transit to the EU.
Thus, while Assad stays in power, the construction of the gas pipeline from Qatar to the Mediterranean coast of Syria is impossible. Energy experts calculated back in 2009-2010, that if Sunnis came to power in Syria, instead of the Alawite regime of Bashar Assad, the gas pipeline ‘Qatar – Saudi Arabia – Jordan – Syria – Turkey’ would be built in two years.
This would result in huge financial losses for Russia, whose gas cannot compete with the low cost of Qatari gas. Hence, Saudi Arabia is trying to subdue Qatar through a conflict within the GCC, in order to cut off another option – the construction of a gas pipeline from Iran (South Pars) through Iraq and Syria, which could be a joint project with Russia. Doha would play only a supportive secondary role, being dependent on Tehran.
In negotiations, the KSA sought U.S. consent to a large increase in the assistance provided to Syrian rebels, in particular, to supply heavy weapons and man-portable air defense systems (MANPADS), which would reduce to naught the superiority of the Syrian government forces in terms of firepower and its complete superiority in the air, and tip the military balance to the rebels.
After that, it would be possible to act under the time-tested scheme: the creation of no-fly zones near Turkish and Jordanian borders, turning those areas into a stronghold of militants, supplying arms, sending large mercenary forces, and organizing a march on Damascus.
In this case, according to the logic of the Saudis, Iran would be forced to move to a strategic defense, which would satisfy Riyadh at this stage before the next move – arranging a coalition aimed at stifling the Islamic regime in Tehran.
In return for making these strategic moves possible, Obama asked the Saudis to give $15 billion to support current Ukrainian authorities, explaining that the KSA would be compensated for these financial costs and a temporary drop in oil prices later by the energy “isolation” of Russia and Iran.
There is a precedent for this when, in the mid-1980s as a response to Soviet troops being sent into Afghanistan, President Reagan and the Saudi King caused a sharp decline in oil prices by dumping Saudi oil on the world market, which ultimately led to the disintegration of the Soviet Union due to their subsequent economic problems.
Today, a much smaller decrease in oil prices – from the current $107 per barrel to around $80-$85 — would be enough to make Russia suffer huge financial losses. This would allow the U.S. president not only to get revenge for Crimea, but to undermine the economy of the Russian Federation, which would be followed by negative domestic political consequences for the current Russian government.
Earlier, American billionaire George Soros said that the U.S. strategic oil reserves are more than twice as large than the required level, and the sale of a part of these reserves would allow pressure to be exerted on Russia. Hence, the blows would hit Moscow from two directions – from the United States and from the Persian Gulf. However, later on, the U.S. Secretary of Energy denied this possibility.
However, there is the question: Did the U.S. President manage to agree with Saudi Arabia to increase oil supplies to the world market to bring down prices? Can the KSA offer significant volumes of oil on the world market, for example, up to 3-4 million barrels per day?
The fact is that the price of $110 per barrel is what Saudi Arabia needs, because the leadership of the kingdom has extensive socio-economic obligations. If the Saudi standard of living were to decrease due to a fall in oil prices, the country would be at risk to fall into the situation of the “Arab Spring,” as was the case in Tunisia, Libya, Egypt. And the Saudis are afraid of a repetition of the Arab revolutions.
Apparently, the Saudis are not motivated to offer additional oil on the market to bring down the price, merely due to the hatred of the United States for the Russian Federation, since this is not profitable for them at all. They could agree on other things, including Qatari gas, Syria and Iran. In addition, the KSA’s production capacity of about 4 million barrels per day is not engaged now. It could take up to one month to increase the production. This is about as much as Iran produced at one time.
Iran is now going to increase its production, due to lifting a part of the sanctions, and the Saudis would want to reduce their oil production to keep prices high. So the prices will remain within the range they have been for a long time.
They will be in the range from $100 to $110, as this is the most comfortable range for both consumers and producers. Many countries, especially those that can influence the prices via some supply manipulations, are extremely interested in having high prices. Socio-economic programs are carried out in Venezuela at a price level of about $120 per barrel. In Iran, this figure is $110, and the same in Saudi Arabia. Thus, no one is interested in bringing down prices.
As for Iran, only one thing is clear for the time being: President Barack Obama has reassured Saudi King Abdullah that he would not agree to a “bad deal” with Iran on the nuclear issue. That is, Riyadh did not get what it wanted even on the Iranian issue.
After the two leaders discussed their “tactical disagreements,” they both agreed that their strategic interests coincide, said an administration official. The White House statement on the two-hour talks reads that Obama reaffirmed the importance of Washington’s strong ties with the world’s largest oil exporter, KSA. At the same time, the administration official said that the parties had no time to discuss the situation with human rights in Saudi Arabia during their negotiations.
In addition, a trusted source in the U.S. State Department said that Washington and Riyadh discussed the conflict in Syria. According to him, the two countries carried out good joint work aimed at reaching a political transition period, and the support of moderate factions of the Syrian opposition. As for a possible supply of man-portable air defense systems to opposition militants, an informed source in Washington said that the U.S. was concerned about providing such weapons to the rebels.
Yet, there is information that Obama’s administration is considering the possibility of lifting the ban on the supply of MANPADS to the Syrian opposition. According to this source, the recent successes of the Syrian Army against the opposition forces may force the U.S. president to change his point of view.
Riyadh is well aware that Moscow and its partners on energy matters have things with which to respond to Saudi Arabia if the kingdom is led blindly on a string by the White House. And KSA is aware that Moscow has levers of political influence in the Middle East and the Persian Gulf. The U.S., in turn, is not ready to resume its confrontation with Iran, now that Tehran is fulfilling agreements to freeze its uranium enrichment program. Washington cannot work actively on Syrian affairs with the ongoing tensions in Ukraine, and in addition, the chemical arsenal of the SAR has been half destroyed, as planned.
Apparently, Obama saw during his short stay in the kingdom that great changes are coming there, associated with the upcoming replacement of the current elderly generation of rulers by another one, which might be accompanied by an unpredictable internal perturbation in the KSA. Hence, there is an almost complete absence of victorious statements about the “historical” success of the U.S. President’s visit to Saudi Arabia.