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Russia and Saudi Arabia: A case of ‘PEACE FOR OIL and OIL FOR PEACE’

Russia is fast becoming the Middle East’s provider of a geo-political insurance policy.

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Yesterday witnessed the first arrival of a Saudi monarch on Russian soil and today, the largest Saudi delegation ever to visit Russia, is currently thrashing out the details of multiple bilateral deals in energy and other commercial areas.

The event has confounded many expectations as well as confused many pundits who view geo-political relations, purely on ideological terms. In reality, Saudi Arabia needs Russia and Russia is happy to work with any business partner whose relations can bring something positive to the Russian economy.

A $1 billion joint investment fund related to energy projects has already been established between Saudi and Russia, the details of which will likely emerge this week. Furthermore, a statement from Russia declares, “the leaders (of government and businesses) will consider joint steps to further develop bilateral cooperation in the trade, economic, investment and cultural-humanitarian areas”.

Earlier this year, Russia made a deal with OPEC to freeze oil production in an attempt to stabilise falling oil prices. With the United States rapidly becoming a major factor in energy export markets, Saudi Arabia now finds itself as a kind of competitor with its Washington ally, when it comes to selling oil.

Reuters reports,

“Russian President Vladimir Putin said this week that a pledge by the Organization of the Petroleum Exporting Countries and other producers, including Russia, to cut oil output to boost prices could be extended to the end of 2018, instead of expiring in March 2018.

 Russian Energy Minister Alexander Novak said on Thursday that Moscow would support new countries joining the agreement to restrict oil supply.

The statement came as Saudi Arabia’s King Salman visited Moscow”

Russia could have indeed bucked the OPEC deal and increased production, thus creating a price war between OPEC, of which Saudi is a founding member and non-OPEC energy producers including the US and Russia.

However, Russia opted not to do this for several reasons.

Russia has a natural interest, as most key energy exporters do, in not engaging in a race to the bottom with would-be, let alone actual competitors. In this sense, while Russia as a military and geo-political superpower does not need the protection of OPEC that less powerful energy producers do, it is nevertheless in Moscow’s interest to cooperate with OPEC on a case by case basis. In this sense, Russia has made the decision to value stability of international oil prices more than a would-be ability to undercut competitors and win on volume, while prices plummet in all directions.

Saudi Arabia, for its part, is happy to work with the implied understanding (that may well have been voiced in private) that in exchange for Russian cooperation with OPEC, Saudi will use its surplus sovereign wealth funds which are almost entirely derived from the energy trade, to invest in the Russian economy.

In this sense, Russia’s technology, scientific expertise and growing Eurasian trading routes make a good partner for Saudi’s copious amounts of sovereign wealth.

There is another factor that is also at play. Future Saudi King and current Crown Prince  Mohammad  bin Salman, is eager to diversify the Saudi economy. His pet project, Vision 2030, is already seen as overly ambitious and therefore, Saudi needs all the help it can get in becoming less dependant on oil and on foreign expertise to run the domestic economy.

Russia’s key geographic and geo-political placement on China’s One Belt–One Road combined with Saudi’s already (surprisingly to ideologues) good relations with China, means that Russia is a natural economic partner to Saudi in this sense. Saudi wants and needs as much as it can from One Belt–One Road and now Riyadh is officially working on good terms with the two largest countries along One Belt–One Road.

Saudi Arabia may need Russia more than it needs America

As for lingering foreign policy agreements which have the potential to make life difficult for Saudi and Russia, the short answer is that Russia is not concerned about this and increasingly, nor is Saudi, in spite of what Saudi propaganda designed for a regional Arab audience may indicate.

Saudi Arabia’s foreign policy is far more limited than many acknowledge. While expensively armed, the Saudi armed forces are not well trained and by most accounts, not incredibly capable. The Saudi led air-war against Yemen which has created a humanitarian disaster, has not given Saudi any clear geo-political advantage. It has only further antagonised Iran and created bad publicity for Saudi among human rights activists in the west, including some left-leaning political figures like Jeremy Corbyn. Yet at the end of the day, Saudi’s misadventure in Yemen, which is privately criticised by many in the Saudi deep state, has done Saudi more harm than good, but at this juncture, such geo-political harm is mostly limited to Shi’a states in the Middle East.

While Saudi has been notorious for funding terrorism, this too has done little to weaken its Arab rivals, especially compared with decades of sustained Israeli aggression which has done far more to create instability and chaos  in the Arab world.

This is not to say that Saudi foreign policy is moral, ethical or well-intentioned, it is none of those things, but nor has it been particularly effective in the crucial long term perspective. This distinction is often lost in impassioned arguments over the Saudi regime’s tactics.

Finally there is another angle, expert journalist Pepe Escobar has written multiple pieces on the internal power struggle in Saudi. Much of this revolves around the battle between the young Crown Prince Mohammad Bin Salman (MBS) and the former next in line to the throne, Muhammad bin Nayef (MBN).

While MBS is the younger, more ambitious and by many accounts the more frivolous of the two rivals, MBN is considered the more ‘west friendly’ of the two princes. MBN is seen as someone who would have trudged along, preserving the status quo of Saudi having strong relations with the west, decent but ultimately second rate relations with China and limited relations with Russia. By contrast, MBN wants to diversify the Saudi economy, is said to have good relations with Russian officials, but more dangerously, also wants Saudi to have a more pro-active foreign policy.

This worries many ‘Russia watchers’, far more than it worries the Russian political class. Russia is all too aware of how mutual business interests and long-term respectful diplomatic communication can help reduce tensions between regional rivals to mere rhetoric. Turkey’s newfound defence of Syrian and Iraqi territorial integrity, has been as much because of Turkey’s economic reliance on Russia as it is because of Kurdish nationalism in the region. While Kurdish nationalism has angered Turkey, Russia’s partnership has assured Turkey that a balance of power will ultimately be maintained in the Middle East by the Russian geo-political superpower that Ankara has come to both trust and respect. In this sense, Russia’s stabilising hand offers most Middle East actors, a kind of unspoken but equally unambiguous insurance policy.

The Russian geo-political ‘insurance policy’ has also helped to bring Turkey and Iran closer together. Again, while Kurdish nationalism and Israeli aggression has mutually infuriated Ankara and Tehran, it was first and foremost, Russia’s friendship with both powers that allowed Iran and Turkey to develop a newfound sense of trust and mutually beneficial economic relations.

Turkish President Erdogan meets with Iran’s Supreme Leader Ali Khamenei to solidify partnership

Turning to the dispute between Riyadh and Doha, Russia’s genuinely neutral stance on the row between Qatar on the one hand and Saudi Arabia, the UAE, Bahrain and Egypt on the other, has earned Russia genuine respect on all sides of this conflict.

And then one has to necessarily turn to the Saudi/Iranian conflict. MBS is considered one of the more anti-Iranian figures in a Saudi state that is de-facto anti-Iran. While some ideologically motivated commentators think that the Saudi monarch’s visit to Moscow is a betrayal of the Moscow-Tehran partnership, this is no more the case than Russia’s increasingly good relations with Turkey has been a threat to Russia’s Syrian partner.

The slow-moving but increasingly obvious outcome of good Russian relations with Turkey has meant that Turkey is now playing a less destructive and detracting role in Syria.  While Damascus and Ankara still do not have official diplomatic channels, the fact that Damascus welcomed the Turkish policed de-escalation zone in Syria’s Idlib Governorate, is a sign of a small yet significant rapprochement, albeit via a third party.

Likewise, if both Iran and Saudi become increasingly intertwined in an economic partnership with Russia and also China, there will be less of a chance that Saudi would ever make good on its threats against Iran. Even now, the threats against Iran are mostly rhetorical as Saudi simply does not have the ability to even attempt to win a war against Iran’s superior armed forces.

In this sense, Russia is helping create stability in the Middle East by making previous and current rival nations into countries that each have an economic interest in a common partner. That partner is Russia which increasingly also means China, by extrapolation, as well as overriding realities of Chinese investment in the Middle East. There is only one nation that is one good to very good terms with nations as diverse as Iran, Saudi Arabia, Syria, Turkey, Iraq, Egypt, Qatar, Palestine, Israel and in many ways, event the notoriously difficult Lebanon. This country is Russia.

Just as Nawaz Sharif’s ouster from the Premiership in Islamabad has not negatively impacted Pakistan’s close economic and geo-political relations with China, so too would any would-be palace coup in Saudi, or any other Persian Gulf monarchy, not effect relations with Russia as much as some would hope or in other cases, fear. There is only so much that any ideological state can do to resist pragmatism. This far, Russia has quietly made sure that in all such states, pragmatic thinking beats out ideological rhetoric. Saudi Arabia is no exception, it in fact, proves the rule.

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The conclusion of Russiagate, Part II – news fatigue across America

The daily barrage of Russiagate news may have been a tool to wear down the American public as the Deep State plays the long game for control.

Seraphim Hanisch

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Presently there is a media blitz on across the American news media networks. As was the case with the Russiagate investigation while it was ongoing, the conclusions have merely given rise to a rather unpleasant afterbirth in some ways as all the parties involve pivot their narratives. The conclusion of Russiagate appears to be heavily covered, yet if statistics here at The Duran are any indication, there is a good possibility that the public is absolutely fatigued over this situation.

And, perhaps, folks, that is by design.

Joseph Goebbels had many insights about the use of the media to deliver and enforce propaganda. One of his quotes runs thus:

The best propaganda is that which, as it were, works invisibly, penetrates the whole of life without the public having any knowledge of the propagandistic initiative.

and another:

That is of course rather painful for those involved. One should not as a rule reveal one’s secrets, since one does not know if and when one may need them again. The essential English leadership secret does not depend on particular intelligence. Rather, it depends on a remarkably stupid thick-headedness. The English follow the principle that when one lies, it should be a big lie, and one should stick to it. They keep up their lies, even at the risk of looking ridiculous.

If there has ever been a narrative that employed these two principles, it is Russiagate.

A staggering amount of attention has been lavished on this nothing-burger issue. Axios reports that an analytics company named Newswhip tallied an astounding 533,074 web articles published about Russia and President Trump and the Mueller investigation (a number which is being driven higher even now, moment by moment, ad nauseam). Newsbusters presently reports that the networks gave 2,284 minutes to the coverage of this issue, a number which seems completely inaccurate because it is much too low (38 hours at present), and we are waiting for a correction on this estimate.

Put it another way: Are you sick of Russiagate? That is because it has dominated the news for over 675 days of nearly wall-to-wall news cycles. The political junkies on both sides are still pretty jazzed up about this story – the Pro-Trump folks rejoicing over the presently ‘cleared’ status, while of course preparing for the upcoming Democrat / Deep State pivot, and the Dems in various levels of stress as they try to figure out exactly how to pivot in such a manner that they do not lose face – or pace – in continuing their efforts to rid their lives of the “Irritant-in-Chief” who now looks like he is in the best position of his entire presidency.

But a lot of people do not care. They are tired.

I hate to say it (and yes, I am speaking personally and directly), but this may be a dangerous fatigue. Here is why:

The barrage of propaganda on this issue was never predicated on any facts. It still isn’t. However, as we noted a few days ago, courtesy of Fox News’ Tucker Carlson, at present, 53% of US registered voters believe that the Trump campaign worked with Russia to influence the 2016 election.

That means 53% of the voting public now believes something that is totally false.

Many of these people are probably simply exhausted from the constant coverage of this allegation as well. So when the news came out Sunday night that there was no evidence of collusion and no conclusive evidence, hence, of obstruction of justice by the Trump Administration – in other words, this whole thing was a nothing burger – will this snap those 53% back into reality?

Probably not. Many of them may well be so worn down that they no longer care. Or worse, they are so worn out that they will continue to believe the things they are told that sustain the lie, despite its being called out as such.

C.S. Lewis wrote about this peculiarity of human nature, in particular in the seventh book of his Chronicles of Narnia. After a prolonged and fierce assault on the sensibilities of the Narnians with the story that Aslan, the Christ figure of this world, was in fact an angry overlord, selling the Narnians themselves into slavery, and selling the whole country out to its enemy, with the final touch being that Aslan and the devilish deity of the enemy nation were in fact one and the same, the Narnians were unable to snap back to reality when it was shown conclusively and clearly that this was in fact not the case.

The fear that was instilled from the use of false narratives persisted and blocked the animals from reality.

Lewis summarized it this way through the thoughts of Tirian, the lead character in this tale:

Tirian had never dreamed that one of the results of an Ape’s setting up as a false Aslan would be to stop people from believing in the real one. He had felt quite sure that the Dwarfs would rally to his side the moment he showed them how they had been deceived. And then next night he would have led them to Stable Hill and shown Puzzle to all the creatures and everyone would have turned against the Ape and, perhaps after a scuffle with the Calormenes, the whole thing would have been over. But now, it seemed, he could count on nothing. How many other Narnians might turn the same way as the Dwarfs?

This is part of the toll this very long propaganda campaign is very likely to take on many Americans. It takes being strongly informed and educated on facts to withstand the withering force of a narrative that never goes away. Indeed, if anything, it takes even more effort now, because the temptation of the pro-Trump side will be to retreat to a set of political talking points that, interestingly enough, validate Robert Mueller’s “integrity” when only a week ago they were attacking this as a false notion.

This is very dangerous, and even though Mr. Trump and his supporters won this battle, if they do not come at this matter in a way that shows education, and not merely the restating of platitudes and talking points that “should be more comfortable, now that we’ve won!”

The cost of Russiagate may be far higher than anyone wants it to be. And yes, speaking personally, I understand the fatigue. I am tired of this issue too. But the temptation to go silent may have already taken a lot of people so far that they will not accept the reality that has just been revealed.

Politics is a very fickle subject. Truth is extremely malleable for many politicians, and that is saying it very nicely. But this issue was not just politics. It was slander with a purpose, and that purpose is unchanged now. In fact things may even be more dangerous for the President – even risking his very life – because if the powers that are working behind the people trying to get rid of President Trump come to realize that they have no political support, they will move to more extreme measures. In fact this may have already been attempted.

We at The Duran reported a few months ago on a very strange but very compelling story that suggested that there was an attempted assassination and coup that was supposed to have taken place on January 17th of this year. It did not happen, but there was a parallel story that noted that the President may have been targeted for assassination already no fewer than twelve times.  Hopefully this is just tinfoil-hat stuff. But we have seen that this effort to be rid of President Trump is fierce and it is extremely well-supported within its group. There is no reason to think that the pressure will lighten now that this battle has been lost.

The stakes are much too high, and even this long investigation may well have been part of the weaponry of the group we sometimes refer to as the “Deep State” in their effort to reacquire power, and in their effort to continue to pursue both a domestic and geopolitical agenda that has so far shown itself to be destructive to both individuals and nations all over the world.

Speculation? Yes. Needless? We hope so. This is a terrible possibility that hopefully no reasonable person wants to consider.

Honestly, folks, we do not know. But we had to put this out there for your consideration.

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Parliament Seizes Control Of Brexit From Theresa May

Zerohedge

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Schaeuble, Greece and the lessons learned from a failed GREXIT (Video)

The Duran Quick Take: Episode 117.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris examine a recent interview with the Financial Times given by Wolfgang Schäuble, where the former German Finance Minister, who was charged with finding a workable and sustainable solution to the Greek debt crisis, reveals that his plan for Greece to take a 10-year “timeout” from the eurozone (in order to devalue its currency and save its economy) was met with fierce resistance from Brussels hard liners, and Angela Merkel herself.

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Via FT

“Look where we’re sitting!” says Wolfgang Schäuble, gesturing at the Berlin panorama stretching out beneath us. It is his crisp retort to those who say that Europe is a failure, condemned to a slow demise by its own internal contradictions. “Walk through the Reichstag, the graffiti left by the Red Army soldiers, the images of a destroyed Berlin. Until 1990 the Berlin Wall ran just below where we are now!”

We are in Käfer, a restaurant on the rooftop of the Reichstag. The views are indeed stupendous: Berlin Cathedral and the TV Tower on Alexanderplatz loom through the mist. Both were once in communist East Berlin, cut off from where we are now by the wall. Now they’re landmarks of a single, undivided city. “Without European integration, without this incredible story, we wouldn’t have come close to this point,” he says. “That’s the crazy thing.”

As Angela Merkel’s finance minister from 2009 to 2017, Schäuble was at the heart of efforts to steer the eurozone through a period of unprecedented turbulence. But at home he is most associated with Germany’s postwar political journey, having not only negotiated the 1990 treaty unifying East and West Germany but also campaigned successfully for the capital to move from Bonn.

For a man who has done so much to put Berlin — and the Reichstag — back on the world-historical map, it is hard to imagine a more fitting lunch venue. With its open-plan kitchen and grey formica tables edged in chrome, Käfer has a cool, functional aesthetic that is typical of the city. On the wall hangs a sketch by artists Christo and Jeanne-Claude, who famously wrapped the Reichstag in silver fabric in 1995.

The restaurant has one other big advantage: it is easy to reach from Schäuble’s office. Now 76, he has been confined to a wheelchair since he was shot in an assassination attempt in 1990, and mobility is an issue. Aides say he tends to avoid restaurants if he can, especially at lunchtime.

As we take our places, we talk about Schäuble’s old dream — that German reunification would be a harbinger of European unity, a step on the road to a United States of Europe. That seems hopelessly out of reach in these days of Brexit, the gilets jaunes in France, Lega and the Five Star Movement in Italy.

Some blame Schäuble himself for that. He was, after all, the architect of austerity, a fiscal hawk whose policy prescriptions during the euro crisis caused untold hardship for millions of ordinary people, or so his critics say. He became a hate figure, especially in Greece. Posters in Athens in 2015 depicted him with a Hitler moustache below the words: “Wanted — for mass poverty and devastation”.

Schäuble rejects the criticism that austerity caused the rise of populism. “Higher spending doesn’t lead to greater contentment,” he says. The root cause lies in mass immigration, and the insecurities it has unleashed. “What European country doesn’t have this problem?” he asks. “Even Sweden. The poster child of openness and the willingness to help.”

But what of the accusation that he didn’t care enough about the suffering of the southern Europeans? Austerity divided the EU and spawned a real animus against Schäuble. I ask him how that makes him feel now. “Well I’m sad, because I played a part in all of that,” he says, wistfully. “And I think about how we could have done it differently.”

I glance at the menu — simple German classics with a contemporary twist. I’m drawn to the starters, such as Oldenburg duck pâté and the Müritz smoked trout. But true to his somewhat abstemious reputation, Schäuble has no interest in these and zeroes in on the entrées. He chooses Käfer’s signature veal meatballs, a Berlin classic. I go for the Arctic char and pumpkin.

Schäuble switches seamlessly back to the eurozone crisis. The original mistake was in trying to create a common currency without a “common economic, employment and social policy” for all eurozone member states. The fathers of the euro had decided that if they waited for political union to happen first they’d wait forever, he says.

Yet the prospects for greater political union are now worse than they have been in years. “The construction of the EU has proven to be questionable,” he says. “We should have taken the bigger steps towards integration earlier on, and now, because we can’t convince the member states to take them, they are unachievable.”

Greece was a particularly thorny problem. It should never have been admitted to the euro club in the first place, Schäuble says. But when its debt crisis first blew up, it should have taken a 10-year “timeout” from the eurozone — an idea he first floated with Giorgos Papakonstantinou, his Greek counterpart between 2009 and 2011. “I told him you need to be able to devalue your currency, you’re not competitive,” he says. The reforms required to repair the Greek economy were going to be “hard to achieve in a democracy”. “That’s why you need to leave the euro for a certain period. But everyone said there was no chance of that.”

The idea didn’t go away, though. Schäuble pushed for a temporary “Grexit” in 2015, during another round of the debt crisis. But Merkel and the other EU heads of government nixed the idea. He now reveals he thought about resigning over the issue. “On the morning the decision was made, [Merkel] said to me: ‘You’ll carry on?’ . . . But that was one of the instances where we were very close [to my stepping down].”

It is an extraordinary revelation, one that highlights just how rocky his relationship with Merkel has been over the years. Schäuble has been at her side from the start, an éminence grise who has helped to resolve many of the periodic crises of her 13 years as chancellor. But it was never plain sailing.

“There were a few really bad conflicts where she knew too that we were on the edge and I would have gone,” he says. “I always had to weigh up whether to go along with things, even though I knew it was the wrong thing to do, as was the case with Greece, or whether I should go.” But his sense of duty prevailed. “We didn’t always agree — but I was always loyal.”

That might have been the case when he was a serving minister, but since becoming speaker of parliament in late 2017 he has increasingly distanced himself from Merkel. Last year, when she announced she would not seek re-election as leader of the Christian Democratic Union, the party that has governed Germany for 50 of the past 70 years, Schäuble openly backed a candidate described by the Berlin press as the “anti-Merkel”. Friedrich Merz, a millionaire corporate lawyer who is the chairman of BlackRock Germany, had once led the CDU’s parliamentary group but lost out to Merkel in a power struggle in 2002, quitting politics a few years later. He has long been seen as one of the chancellor’s fiercest conservative critics — and is a good friend of Schäuble’s.

Ultimately, in a nail-biting election last December, Merkel’s favoured candidate, Annegret Kramp-Karrenbauer, narrowly beat Merz. The woman universally known as “AKK” is in pole position to succeed Merkel as chancellor when her fourth and final term ends in 2021.

I ask Schäuble if it’s true that he had once again waged a battle against Merkel and once again lost. “I never went to war against Ms Merkel,” he says. “Everybody says that if I’m for Merz then I’m against Merkel. Why is that so? That’s nonsense.”

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