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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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Rod Rosenstein resigns from his post before President Trump can fire him

Rosenstein’s comments about secretly recording the President backfire, and resignation may throw the Mueller Russiagate probe into question.

Seraphim Hanisch

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The Washington Times broke the story that Deputy Attorney General Rod Rosenstein resigned from his post. He submitted his resignation to Chief of Staff John Kelly.  At present the breaking story says the following:

Deputy Attorney General Rod Rosenstein is out at the Department of Justice.

Axios reported that Mr. Rosenstein verbally resigned to White House Chief Of Staff John Kelly, but CNN said that he is expecting to be fired.

Sarah Isgur Flores, a Department of Justice spokeswoman, declined to comment on the reports.

Mr. Rosenstein’s departure immediately throws Special Counsel Robert Mueller’s Russian collusion probe into chaos.

Attorney General Jeff Sessions recused himself from the investigation, leaving Mr. Rosenstein in charge.

President Trump mulled firing the No. 2 at the Department of Justice over the weekend.

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This report came after Fox News reported that the Deputy AG was summoned to the White House. Fox reported a little more detail:

Deputy Attorney General Rod Rosenstein is heading to the White House expecting to be fired, sources tell Fox News, in the wake of a report that he suggested wearing a wire against President Trump and invoking the 25th Amendment to remove him from office last year.

This is a developing story, however one major factor that comes under consideration is the fate of Robert Mueller and his Russiagate investigation, which was authorized by Rosenstein. CNBC had this to say in their piece:

Deputy Attorney General Rod Rosenstein is resigning Monday, according to Axios, which cited a source familiar with the matter.

NBC News’ Pete Williams, however, reported that Rosenstein would not resign of his own accord, and that he will only depart if the White House fired him. He will refuse to resign if asked to do so, Williams added.

Rosenstein was at the White House when Williams reported this on the air. However, President Donald Trump is in New York for the United Nations General Assembly.

Bloomberg later reported that the White House accepted Rosenstein’s resignation, citing a person familiar with the matter.

Rosenstein’s expected resignation will immediately raise questions about the fate of the ongoing investigation by special counsel Robert Mueller, who is probing Russian interference in the 2016 presidential election, and possible obstruction of justice by President Donald Trump.

Rosenstein’s job security was called into question after The New York Times reported last week that the No. 2 DOJ official had discussed invoking the 25th amendment to remove Trump, and had also talked about surreptitiously recording the president.

Rosenstein oversees the special counsel investigation, and has appointed Mueller to run the Russia probe last year, after Attorney General Jeff Sessions recused himself from the case.

The special counsel’s office declined to comment on the report.

The White House did not immediately respond to CNBC’s request for comment on Axios’ report. The Justice Department did not immediately respond to CNBC’s inquiry.

Trump has repeatedly blasted Mueller’s inquiry, which also is focused on possible collusion with Russia by members of the Trump campaign.

He has called the investigation a “witch hunt,” and has repeatedly vented frustration about Sessions’ recusal, which directly led to Mueller’s appointment by Rosenstein.

Rosenstein’s expected departure comes on the heels of a guilty plea by Trump’s former campaign manager Paul Manafort to conspiracy charges related to his consulting work in Ukraine, which predates his role on the campaign.

As part of the investigation, Mueller’s team has been locked in an ongoing back-and-forth with Trump’s legal team over an in-person interview with the president.

Trump’s lawyers, including former New York Mayor Rudy Giuliani, have signaled that Trump is unwilling to sit for an interview, calling it a “perjury trap” and setting up a potential challenge for Mueller to subpoena the president.

This story is developing. Please check back for updates.

 

 

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European Council crushes Theresa May’s soft Brexit dream (Video)

The Duran – News in Review – Episode 116.

Alex Christoforou

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UK Prime Minister Theresa May hoped that the European Council was ready to see things her way, in terms of proceeding with a soft Brexit, which was essentially no Brexit at all…at least not the hard Brexit that was voted on in a democratic referendum approximately two years ago.

Much to May’s surprise, European Council President Donald Tusk delivered a death blow verdict for May’s Brexit, noting that EU leaders are in full agreement that Chequers plan for Brexit “will not work” because “it risks undermining the single market.”

Without a miracle compromise springing up come during the October summit, the UK will drift into the March 29, 2019 deadline without a deal and out of the European Union…which was initially what was voted for way back in 2016, leaving everyone asking, what the hell was May doing wasting Britain’s time and resources for two years, so as to return back to the hard Brexit terms she was charged with carrying forward after the 2016 referendum?

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss what was a disastrous EU summit in Salzburg for UK PM Theresa May, in what looks to be the final nail in May’s tenure as UK Prime Minister, as a hard Brexit now seems all but certain.

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Via Zerohedge

Tusk was speaking at the end of an EU summit in Salzburg, where the leaders of the 27 remaining states in the bloc were discussing Brexit. He said that while there were “positive elements” in May’s Chequers plan, a deal that puts the single market at risk cannot be accepted.

“Everybody shared the view that while there are positive elements in the Chequers proposal, the suggested framework for economic co-operation will not work, not least because it is undermining the single market,” Tusk said. He also said that he could not “exclude” the possibility that the UK could exit the EU in March with no deal.

May has been urging her European counterparts to accept her controversial Chequers plan which has split both the Conservative party and the broader UK population after it was thrashed out back in July. However, despite the painfully-slow negotiation process, which appears to have made little headway with just a few months left, the UK is set to leave the EU on March 29 2019 – with or without an exit deal.

The main sticking point that has emerged, and left May and the EU at loggerheads, has been how to avoid new checks on the Irish border. May has claimed that her proposals were the “only serious, credible” way to avoid a hard border in Northern Ireland. She said during a press conference after the Salzburg meeting that she would not accept the EU’s “backstop” plan to avoid a Northern Ireland hard border. She said the UK would shortly be bringing forward its own proposals.

May also said that there was “a lot of hard work to be done,” adding that the UK was also preparing for the eventuality of having to leave the EU without a deal. Tusk, meanwhile, said that the upcoming October summit would be the “moment of truth” for reaching a deal, and that “if the conditions are there” another summit would be held in November to “formalize” it.

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Russia makes HUGE strides in drone technology

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The US and Israel are universally recognized leaders in the development and use of unmanned aerial vehicles (UAVs) or drones. Thousands of American and Israeli UAVs are operating across the world daily.

The US military has recently successfully tested an air-to-air missile to turn its MQ-9 Reaper drone into an effective long-endurance, high-altitude surveillance unmanned spy aircraft capable of air-to-surface as well as air-to-air missions. This is a major breakthrough. It’s not a secret that Russia has been lagging behind in UAV development. Now its seems to be going to change with tangible progress made to narrow the gap.

Very few nations boast drones capable of high-altitude long endurance (HALE) missions. Russia is to enter the club of the chosen. In late 2017, the Russian Defense Ministry awarded a HALE UAV contract to the Kazan-based Simonov design bureau.

This month, Russian Zvezda military news TV channel showed a video (below) of Altair (Altius) heavy drone prototype aircraft number “03”, going through its first flight test.

Propelled by two RED A03/V12 500hp high fuel efficiency diesel engines, each producing a capacity of 500 hp on takeoff, the 5-ton heavy vehicle with a wingspan of 28.5 meters boasts a maximum altitude of 12km and a range of 10,000km at a cruising speed of 150-250km/h.

Wingspan: about 30 meters. Maximum speed: up to 950 km/h. Flight endurance: 48 hours. Payload: two tons, which allows the creation of a strike version. The vehicle is able to autonomously take off and land or be guided by an operator from the ground.

The UAV can carry the usual range of optical and thermal sensors as well as synthetic-aperture ground-surveillance radar with the resolution of .1 meter at the range of 35km and 1 meter at the range of 125km. The communications equipment allows real-time data exchange.

Russia’s UAV program currently underway includes the development of a range of large, small, and mid-sized drones. The Orion-E medium altitude long endurance (MALE) UAV was unveiled at the MAKS 2017 air show. Its developer, Kronstadt Technologies, claims it could be modified for strike missions. The one-ton drone is going through testing now. The Orion-E is capable of automatic takeoff and landing.

It can fly continuously for 24 hours, carrying a surveillance payload of up to 200 kg to include a forward looking infra-red (FLIR) turret, synthetic aperture radar and high resolution cameras. The drone can reach a maximum altitude of 7,500 m. Its range is 250 km.

The Sukhoi design bureau is currently developing the Okhotnik (Hunter) strike drone with a range of about 3,500km. The drone made its maiden flight this year. In its current capacity, it has an anti-radar coating, and will store missiles and precision-guided bombs internally to avoid radar detection.

The Kazan-based Eniks Design Bureau is working on the small T-16 weaponized aerial vehicle able to carry 6 kg of payload.

The new Russian Korsar (Corsair) tactical surveillance unmanned aerial vehicles (UAV) will be upgraded to receive an electronic warfare system. Its operational range will be increased from 150km to 250km. The drone was revealed at Victory Day military parade along with the Korsar unmanned combat helicopter version.

The rotary wing drone lacks the speed and altitude of the fixed wing variant, but has a great advantage of being able to operate without landing strips and can be sea-based. Both drones can carry guided and unguided munitions. The fixed-wing version can be armed with Ataka 9M120 missiles.

The first Russian helicopter-type unmanned aerial vehicle powered by hydrogen fuel cells was presented at the Army-2018 international forum. With the horizontal cruising speed of the drone up to 60 kph, the unmanned chopper can stay in the air at least 2.5 hours to conduct reconnaissance operations. Its payload is up to 5 kg.

Last November, the Kalashnikov Concern reported that it would start production of heavy unmanned aerial vehicles capable of carrying up to several tons of cargo and operating for several days at a time without needing to recharge.

All in all, the Russian military operate 1,900 drones on a daily basis. The multi-purpose Orlan-10 with a range of 600km has become a working horse that no military operation, including combat actions in Syria, can be conducted without. Maj. Gen. Alexander Novikov,
the head of the Russian General Staff’s Office for UAV Development, Russian drones performed over 23,000 flights, lasting 140,000 hours in total.

Russia’s State Armament Program for 2018-2027 puts the creation of armed UAVs at the top of priorities’ list. Looks like the effort begins to pay off. Russia is well on the way to become second to none in UAV capability.

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Via Strategic Culture

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