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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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‘I will take over as Brexit Party leader’: Nigel Farage back on the frontline

Nigel Farage says that if the UK takes part in European elections, he will lead his new Brexit Party.

RT

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Former UKIP leader Nigel Farage has announced that he will lead his new Brexit Party into the European elections if UK MPs decide to delay Brexit beyond May 22.

Farage, who has ostensibly appointed himself leader, told various media, including the BBC and Sky News on Friday morning: “I will take over as leader of the Brexit Party and lead it into the European Elections.”

It comes after the Brexit Party’s leader, Catherine Blaiklock, quit over a series of alleged Islamophobic statements and retweets of far-right figures on social media.

It is not yet thought that Farage has officially been elected as leader, as the party does not, as yet, have a formal infrastructure to conduct such a vote.

The right-wing MEP vowed to put out a whole host of Brexit Party candidates if the UK participates in the upcoming EU elections in May, adding: “If we fight those elections, we will fight them on trust.”

On Thursday night, the EU agreed to PM May’s request for a delaying to Brexit beyond the March 29 deadline. Brussels announced two new exit dates depending on what happens next week in the UK parliament.

The UK will have to leave the bloc on April 12 unless British MPs agree to May’s Brexit deal. If the withdrawal agreement is passed by next week, EU leaders have agreed to grant an extension until May 22.

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Baltics cannot rely on Germany any more

The matter is NATO today is not as strong as it is supposed to be. And it is not only because of leadership blunders.

The Duran

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Submitted by Adomas Abromaitis…

On March 29 Latvia, Lithuania and Estonia will celebrate 15 years of becoming NATO member states. The way to the alliance membership was not simple for newly born independent countries. They have reached great success in fulfilling many of NATO demands: they have considerably increased their defence expenditures, renewed armaments and increased the number of military personnel.

In turn, they get used to rely on more powerful member states, their advice, help and even decision making. All these 15 years they felt more or less safe because of proclaimed European NATO allies’ capabilities.

Unfortunately, now it is high time to doubt. The matter is NATO today is not as strong as it supposed to be. And it is not only because of leadership’s blunders. Every member state does a bit. As for the Baltic states, they are particularly vulnerable, because they fully depend on other NATO member states in their defence. Thus, Germany, Canada and Britain are leading nations of the NATO battle group stationed in Lithuania, Latvia and Estonia respectively.

But the state of national armed forces in Germany, for example, raises doubts and makes it impossible not only defend the Baltics against Russia, but Germany itself.

It turned out, that Germany itself remains dissatisfied with its combat readiness and minister of defence’s ability to perform her duties. Things are so bad, that the military’s annual readiness report would be kept classified for the first time for “security reasons.”

“Apparently the readiness of the Bundeswehr is so bad that the public should not be allowed to know about it,” said Tobias Lindner, a Greens member who serves on the budget and defense committees.

Inspector General Eberhard Zorn said (https://www.reuters.com/article/us-germany-arms/germany-not-satisfied-with-readiness-of-submarines-some-aircraft-idUSKBN1QS1G7) the average readiness of the country’s nearly 10,000 weapons systems stood at about 70 percent in 2018, which meant Germany was able to fulfill its military obligations despite increasing responsibilities.

No overall comparison figure was available for 2017, but last year’s report revealed readiness rates of under 50 percent for specific weapons such as the aging CH-53 heavy-lift helicopters and the Tornado fighter jets.

Zorn said this year’s report was more comprehensive and included details on five main weapons systems used by the cyber command, and eight arms critical for NATO’s high readiness task force, which Germany heads this year.

“The overall view allows such concrete conclusions about the current readiness of the Bundeswehr that knowledge by unauthorized individuals would harm the security interests of the Federal Republic of Germany,” he wrote.

Critics are sure of incompetence of the Federal Minister of Defence, Ursula von der Leyen. Though she has occupied the upper echelons of German politics for 14 years now — and shows no sign of success. This mother of seven, gynecologist by profession, by some miracle for a long time has been remaining in power, though has no trust even among German military elites. Despite numerous scandals she tries to manage the Armed Forces as a housewife does and, of course, the results are devastating for German military capabilities. The same statement could be easily apply for the Baltic States, which highly dependent on Germany in military sphere.

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Crimea: The Geopolitical Jewel Russia Continues to Polish

As Putin continues to polish his Black Sea jewel, Europe has to decide if it is going to continue playing the U.S’s games over Ukraine or begin the next phase of its independence.

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Authored by Tom Luongo via The Strategic Culture Foundation:


With all that is happening in the world Crimea has taken a bit of a backseat recently. Yes, the US, EU and Canada just added more sanctions on Russia via the odious Magnitsky legislation but this is inconsequential.

There’s been a flurry of good news coming out of Crimea and the Black Sea recently that bears discussion. Let’s start with the most important. President Vladimir Putin was in Crimea earlier this week to celebrate the fifth anniversary of the peninsula’s reunification with Russia. There he also officially inaugurated two major upgrades to Crimea’s power grid.

Located in Simferopol and Sevastopol, two new power plants will produce 940 megawatts and secure Crimea’s energy needs for now and into the future.

Power has been Crimea’s Achilles’ heel since breaking off from Ukraine in 2014. It received almost 90% of its power from the mainland. In November 2015, the trunk lines into Crimea were sabotaged by Ukrainian nationalist radicals, encouraged by President Petro Poroshenko plunging it into darkness as winter took hold.

Does this sound familiar? A place that defies US edicts geopolitically is first hit with a full trade embargo, sanctions and threatened militarily by proxies before having its electricity shut off?

*Cough* Venezuela *Cough*

And there are reports that the US has game-planned a similar fate for Iran as well. For Crimea it was easy because of the single-point-of-failure, the trunks from the mainland. For Venezuela it was as well, with the Guri dam, which affected nearly 70 percent of the country.

So, Putin timing the fifth anniversary of reunification with the announcement of the plants moving to full operational status was yet another smooth bit of international political maneuvering.

A not-so-subtle poke in the eye of the Gang Who Can’t Sanction Straight in D.C. as well as lame duck Poroshenko. Elections are at the end of the month and this celebration by Russia and Crimea will not sit well with many Ukrainians, especially the diaspora here in the US which is virulently anti-Putin in my experience.

Secure and stable power generation is a hallmark of a first world territory. Without that economic growth and stability are impossible. This is why to first help stabilize the situation in Crimea after the blackout Russia brought in 400 MW of power across the Kerch Strait from Krasnodor.

Tying Crimea to the mainland via the Kerch Strait bridge was a masterstroke by Putin. The initial power lines were simply a necessity. For those that complain he isn’t doing enough to counter US and European aggression need only look at the Kerch Strait bridge.

Not only did the Russians not seek international approval given the nearly universal refusal to recognize Crimea as Russian they built the thing in a time frame that defies description.

Imagine if this had been an EU project. They would still be debating the initial engineering plans and the political effects on some protected minority.

Not only does it open up the Eastern Black Sea to trade via Crimea but it ends the use of the Sea of Azov as a potential staging ground for naval provocations as last fall’s incident proved. Ukraine is cut off from acting aggressively and cannot count on any help from the US and Europe.

Moreover, Crimea is now permanently Russia’s. And every bit of infrastructure Russia builds there ties the two further together and weakens any bonds Crimea had with Ukraine. The resultant growth and modernization will make its way, economically and culturally back into southern Ukraine and erode the hard border over time.

This is far more important than striking out and metaphorically punching Poroshenko in the mouth, that many of Putin’s detractors wish for.

Presidents change, after all. Patience and attrition is how you beat an aggressive, distant enemy like the US

To remind everyone just how insane the Trump White House has become on matters international, no less than Vice President Mike Pence lobbied Germany to provoke another naval incident at the Kerch Strait.

If there was ever an example of how little Trump’s gang of moldy neocons think of Europe it is this bit of news. In effect, Pence was saying, “We can’t start a war with Russia because it would go nuclear, but you can because Russia can’t live without your trade.”

This coming after the US unilaterally pulled out of the INF treaty and is now flying nuclear bombers to eastern Europe. The message is clear. If the EU doesn’t get with this open-ended belligerent program against Russia and China of John Bolton’s they will be the ones paying the price when chaos breaks out.

On the other side there is Putin; building bridges, pipelines, power plants and roads.

He’s making it clear what the future holds not only for Europe but the Middle East, central Asia and India. We will defend Crimea at all costs, develop it not only into a tourist destination but also a major trade hub as well.

You are more than welcome to join us. But, we don’t need you.

These power plants will raise Crimea’s power output well beyond its current needs, allowing first export of power as well as providing the foundation for future growth.

And as if it weren’t coordinated in any way, the Chinese, on the morning of Putin’s speech, announced that Crimea would be an excellent fit for investment projects attached to the Belt and Road Initiative (BRI).

That’s according to the head of the association of Chinese compatriots on the peninsula, Ge Zhili. “Our organization is bolstering cooperation ties, exchanges and friendly contacts with the Crimean society,” he said at an event dedicated to the fifth anniversary of Crimea’s reunification with Russia, which was held in the Russian Embassy in Beijing on Monday.

It is also ready to contribute to the establishment of “reliable partner ties” and the explanation of legal details of business cooperation with Crimea, Ge Zhili said. “The Chinese society hopes for the development of friendly cooperation with Crimea; we are ready to overcome difficulties for fruitful results.”

Again this is a direct challenge to the US who has Crimea under strict sanctions in the West. China is happy now to move forward with integrating Crimea into its plans. It’s just another example of how Russia and China simply ignore Trump’s fulminations and move on.

I can’t wait until I get to write this article all over again, this time about North Korea, now that Bolton has thrown Russian and Chinese assistance in getting North Korea to the negotiating table back in their face by destroying the Hanoi talks.

This announcement is not to be underestimated given that Chinese Premier Xi Jinping is in Rome this week to open up relations with the new Italian government. Five Star Movement’s Leader Luigi Di Maio said he would welcome becoming a part of BRI, much to the consternation of Trump, German Chancellor Angela Merkel as well as his coalition partner Lega Leader Matteo Salvini.

It’s already well known that Salvini is interested in ending sanctions on Crimea and re-opening trade with Russia. Italy is desperate for new markets and opportunities, currently stifled under the euro itself as well as Germany’s insistence on austerity hollowing out Italy’s economy and its future prospects.

These issues as well as energy security ones are coming to a head this year with Brexit, the European Parliamentary elections in May and the completion of the Nordstream 2 pipeline later this year.

As Putin continues to polish his Black Sea jewel, Europe has to decide if it is going to continue playing the U.S’s games over Ukraine or begin the next phase of its independence. Salvini will lead a Euroskeptic revolt within the European Parliament in May. It may be big enough to finally defy Merkel and end EU sanctions on Russia over Crimea.

At that point the US will also have a choice, burn down the world economy with even more sanctions, tariffs and acts of war or accept the facts on the ground.

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