Iran Deal May Redefine The Middle East

Yves here. This article provides a detailed discussion of how the US-Iran nuclear agreement is leading to considerable changes in alliances and priorities in the Middle East.

By Robert Berke, an energy financial analyst with experience as a government consultant to the State of Alaska. Originally published at OilPrice

One month after the Iran nuclear deal was concluded, the Middle East is still reeling from profound shock. Long and well established alliances have led to bewildering changes, not only in the Mideast, but across the world.

The stark difference is nowhere more strikingly revealed than in the media reports on the recent Iran nuclear deal. In a recent article on the front page of the Tehran Times, the author compared President Lincoln’s battle with a recalcitrant Congress for the passage of the 13th Amendment with Obama’s struggle with the Congressional leadership and hardliners for passage of the Iran nuke deal.

According to the Tehran Times article, the deal liberated Iran from the ‘enslavement’ of international sanctions that caused Iran’s isolation from the world, with the U.S. President, formerly referred to as Satan, now taking on the role of a new Moses.

Obama’s publicly stated view of the deal, similar to Iran’s, is that it is not just about weapons, but also about ending the thirty odd years of isolation and restoring Iran to its traditional place of power, leadership, and influence in the region.

The huge impact of that statement in the Middle East had the newly anointed King of Saudi Arabia hastening to make his first official visit to the U.S., in an effort to gain assurances from Obama that his alliance with the U.S. will not be abandoned in favor of Iran, its longtime adversary.

There is widespread speculation about the visit of the new Saudi King to the U.S. to meet with President Obama, at a time when tensions between the two countries have seldom been higher. The Saudis’ bitter disappointment over the U.S./EU nuclear deal with Iran, their prime geopolitical rival, is no secret.

Serving to heighten Saudi fears of ‘alliance drift,’ was the U.S. refusal to take more than an arm’s length role in the ongoing wars in Syria and Yemen, against Iran’s allies.

Acting against the advice of the U.S. military, the Saudis’ response was to take a direct role in the conflicts in Yemen and Syria, along with support of so call ‘moderate’ jihadist elements fighting against the Syrian government, Iran’s ally.

From the U.S. perspective, the Saudis are adding fuel to a conflict that threatens to engulf the whole region, where the U.S. Administration had been desperately working with Russia, Iran, and regional allies to find a diplomatic solution.

This has led to a new emerging relationship between the Saudis and Russia, where negotiations between Russia and OPEC emerged over the possibility of coordination of oil production levels. OPEC hinted that it was open to coordinated production cuts with non-OPEC members in its latest bulletin report, saying that “if there is a willingness to face the oil industry’s challenges together” then the future would “be a lot better.” Russian officials held meetings with their counterparts from OPEC, fueling speculation of some sort of accommodation.

Despite positive language from the negotiators, the talks so far have not amounted to much. Rosneft’s Igor Sechin seemed to rule out such a scenario on September 7 in comments to the press, in which he said that Rosneft can’t operate the way OPEC can. It would be difficult for Russia to cut back on its production, even if that meant some chance of higher prices. Russia’s economy is hurting, and it needs to sell every barrel that it can.

Although there won’t be a deal on oil output, Saudi Arabia and Russia made more progress on discussions regarding the purchase of Russian nuclear power plants and military equipment, a likely wake-up call to the U.S. and UK, the Saudis’ longtime military suppliers. Still to be determined is whether this is a new alliance or merely a show of Saudi independence.

The nuke deal also led directly to a sudden military alliance between Israel and Saudi Arabia, once thought of as inconceivable. Along with that, the Saudis also promised, for the first time, exports of oil to Israel.

But the real bombshell, reported in the Israeli press, was the Saudis offer to Israel to allow flyovers of Saudi territory in case an attack on Iran became necessary, supposedly in exchange for some form of peace agreement with the Palestinians.

If that were not enough, there was a new diplomatic overture from Iran to the Saudis to end their long enmity and join in a coalition of like-minded countries opposed to radical Islam.

Following that with another surprise, was the Iranian President’s New Year’s greeting to the Jewish people on their High Holiday celebration of Rosh Hashanah.

At any other time, the recent ‘handshake’ between the Saudis and Israelis to coordinate military strategies against Iran and radical jihadists would have been welcomed with open arms in the U.S. and EU. But now things have changed in ways few could have imagined. Now it seems like both countries are preparing policies that are independent of the western alliance, with Netanyahu scheduled to meet with Putin this month in Russia.

The recent frayed relationship between the U.S. and Israel is often reported as a result of embittered personal relations between Obama and Netanyahu, while others believe that Obama no longer views Israel as a major strategic asset, but a burden for the U.S. and a liability in the Middle East.

That seems unlikely with Obama agreeing to large supplies of U.S. advanced weapon systems for both the Saudis and Israelis, while raising direct aid to Israel by $1.5 billion, totaling $4.5 billion for the next five years.

Opponents of the Iran deal in the U.S. suffered a bitter defeat as the Congress failed to muster enough votes to block the deal from going through, a stinging blow to hawkish forces in the U.S. capitol.

The Iran deal has become viciously politicized as election season is now very much underway. During the September 16 president debate, eight of the eleven Republican candidates promised that their first act of business as President would be to revoke the Iran agreement.

Prior to their Washington visit, the ever diplomatic Saudis, keenly aware of Obama gaining the votes needed to win the deal in Congress, have recently softened their public opposition, even going so far as say that they understood its logic and accepted the deal.

It’s a rare event when the powerful and enormously rich Saudis appear as supplicants in DC, where their influence is widely respected, and their favor and money widely sought. But the Saudis may have valid cause for fears of losing leverage with the U.S., its primary defender for some seventy years.

The EIA reports that in the last five years, the U.S. ‘shale oil revolution’ has enabled the U.S. to more than halve its oil imports, making it far less dependent on imports from OPEC, and significantly changing the terms of the relationship.

There is a lively ongoing argument in the world press about the possibility of the nuke deal leading to an entente between the U.S. and Iran, or even the possibility of an actual alliance.

Hardcore opponents of the deal claim that Iran is already in a quasi-alliance with the U.S. in the fight against ISIS in Iraq. And, although both countries hotly deny any intent to form an alliance, there are many in the region who believe that perhaps ‘the ladies doth protest too much’.

The U.S. and its Gulf allies are also well aware that Russia has been trumpeting a proposal to the international community for a power sharing agreement with the Syrian Government, with a call for immediate new elections in which Assad steps aside and accepts a titular role, with development of a new coalition government against radical Islam, aimed at ending the Syrian conflict.

Obama seemed to be giving the Russian proposal some room to run when he recently stated, “I do agree that we’re not going to solve the problems in Syria unless there’s buy-in from the Russians, Iranians, Turks and our Gulf partners.” For the Saudis, whose confidence has been shaken about its U.S. alliance, this statement could hardly be viewed as re-assuring.

It’s no coincidence that on the eve of the King’s visit, the news appeared in the Israeli press that Russian forces have been deployed in Syria to launch attacks against rebels fighting the Assad government. The point of the Israeli reports is that, unbeknownst to U.S. allies, the Russian deployment in Syria is taking place in close consultation and coordination with the United States.

No doubt, the planned news blitzkrieg was meant to discredit Obama as an unreliable ally to his royal visitors. Although there’s never been a secret about the presence of Russian military advisors in Syria, Kerry warned his Russian counterpart, Lavrov, about not sending Russian combat troops to Syria, even though the U.S. is fully aware of Russia’s military assistance to the Assad government.

Few Russian experts believe that Russia has any intention of directly confronting the western alliance that is fighting against the Syrian Government while the Kremlin is seeking to free itself from international sanctions. Nor is Russia in any shape, economically or militarily, to carry on a war on behalf of Syria that is more than 1,000 miles from its borders.

But within days, the story was carried by the Daily Beast, Washington Post, and NY Times, with hardliners attacking Obama for secretly conspiring with Russia. From there the story went viral across the western media, where it now appears as unquestioned fact instead of rumor.

In the same vein, a similar story seems to have taken on permanent residence on the Israeli web site, (often referred to as the voice of the Israeli Mossad) which states that the U.S. has handed off responsibility to Russia and Iran for ending the Syrian war.

Playing into the immense upheaval is the refuge crisis in Europe, leading ‘Old Europe’ to rethink its position on the Syrian war.

German Chancellor Merkel seems to be abandoning NATO’s anti-Assad position and welcoming the help of Russia in Syria, with France and Italy agreeing.

As reported by Nick Cunningham, on these pages, the recently announced agreement with European oil companies to extend Gazprom’s Nordstream gas pipeline into Germany was a clear sign that the EU is willing to do business with Russia again; this despite the Ukraine crisis, which in the face of Middle Eastern conflicts, seems to be fading into the background.

As few would have predicted only a few months ago, the next shoe to drop could be the first meeting in years between Obama and Putin, at this month’s UN meeting in New York, to discuss the prospect of working together to end the Syrian war.

The west’s deal with Iran is causing a monumental upheaval in Middle East relations, threatening some seventy years of reliable and steady alliances. At the same time, the unending Syrian refugee crisis is forcing Europe to consider new alliances.

Where all this will go next is anyone’s guess.

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  1. Vince in MN

    39 paragraphs of cliche ridden breathless rumor mongering. The heart veritably races waiting for the next shoe dropping.

    1. Clive

      Well, what you call “rumour mongering”, I’d call “analysis”. The piece isn’t short on embedded links to substantiate its main points (they are resilient enough for me to be able to label them as “facts”).

      And while we’re talking about things which are incontrovertible, aside from the US-EU-Iran deal (again, this is a fact then shifting U.S. oil independence (however short lived it might be, say 5 to 10 years, it will be more than sufficient to influence events and alliances in the middle east and also vis-a-vis Russia) is again hardly a “rumour”.

      If your critique of a feature is based on it having a supposed lack of evidence, then it is a tad ironic that you don’t provide evidence to justify your stated dismay at the lack of evidence in the article.

  2. EoinW

    In my lifetime, the Middle East has had two problems: Wahabbism and Zionism. We’ve been on the wrong side of both. One can count on western leaders to always be on the wrong side.

    If Putin appears the voice of reason, what does that make Obama? He often seems like a housewife reacting to the dramatic conclusion of his favourite soap opera…with a new episode to follow tomorrow. Almost want to write – same Bat time, same Bat channel – it’s so cartoonish.

    The refugee crisis has made Merkle seem almost like a compassionate human being. But we know she only cares about keeping the EU going on her watch and she can see what a threat the refugee crisis is to EU unity. How worse will that threat be when Ukrainian refugees start coming? Better make nice with Russia!

  3. LInda Amick

    When I got to this sentence:
    “Serving to heighten Saudi fears of ‘alliance drift,’ was the U.S. refusal to take more than an arm’s length role in the ongoing wars in Syria and Yemen, against Iran’s allies.” I had to stop reading as the article lost all credibility at that point.

    1. craazyboy

      That seems like an accurate read of the current situation to me. From the Saudi view. What’s your beef with it exactly?

    2. lord koos

      I would consider “arm’s length” to be accurate – surely some there are some intelligence advisers and CIA involved in Syria and Yemen, but no commitment to “boots on the ground” or military air power.

  4. Bill Smith

    “Saudis offer to Israel to allow flyovers of Saudi territory in case an attack on Iran” This has been reported on and off for several years.

    The “sudden military alliance between Israel and Saudi Arabia” seems overblown. There have been very scattered reports of intelligence cooperation in the past but that is it.

    Of course FARS reports stuff like this:

    “20 Israeli officers and 63 Saudi military men and officials were killed”

  5. likbez

    “39 paragraphs of cliche ridden breathless rumor mongering. The heart veritably races waiting for the next shoe dropping.”

    I would agree. It is clear for me that the quality of reporting about Russia is on the level of presstitutes from WashPost.

    Also it is unclear that is the USA game plan as for Iran and what this article try to communicate does not looks plausible. It might well be that the USA wants to spread their bets by including Iran into the cycle of vassals (the USA does not need allies, only vassal states) but I think Iran elite still remembers years of crippling sanctions pretty well to jump into Uncle Sam embraces. The deal is needed mainly to put additional pressure on oil prices and if it achieves its goals and Russia crumbles, Iran will be thrown under the bus by US neocons very soon and without any hesitation.

    It also looks like SA leadership wants some kind of rebalancing of relations with Russia as after Egypt to rely on US neocons is simply stupid. They proved to be pretty treacherous folks and promises given are not worth the paper they were printed on.

    But if we assume that neocons dominate the USA foreign policy in foreseeable future, then the key policy in Middle East will be usual “divide and conquer” policy like we saw in Iraq, Libya and Syria. And bloodshed financed from usual sources (is not ISIS the USA and friends creation ?) will continue.

    What is interesting is that SA never managed considerably increase their oil exports as their internal consumption grows more rapidly then extraction. They just refused to drop the volume of their exports. Probably with tacit approval of the USA. So it looks like drastic oil price drop is mainly financial markets play (derivative and futures games) — and that means that one plausible scenario is that this is another attempt to hurt Russia and depose Putin, even by taking a hit for own shale industry and decimating Canadian oil sands. Lifting sanctions from Iran is just the second step of the same plan.

    1. EoinW

      If Vietnam can forget over 2 million murdered by Americans and cozy up to Washington then it must be possible to find elites in any society(even Iran) who will sell out for the right price.

      1. binky J. Bear

        Iran went from Shah to Ayatollah while negotiating with GHW Bush to keep hostages until Reagan inauguration per Parry series on October Surprise. From that cooperation through drugs for arms during the Iran Iraq war days there has been a relationship (not an ideal one, perhaps) between DC and Tehran, often including Israel as go-between.
        Why should we be surprised at anything?

    2. tim s

      But if we assume that neocons dominate the USA foreign policy in foreseeable future

      This is not a good assumption. If the neocon’s controlled it even NOW, this agreement with Iran would not have been made.

    3. Carlos

      I tend to agree.

      First we must accept the not unreasonable premise that the USA is aiming for world hegemony. At least we must accept that the objective of the worlds most powerful nation is to persistently further their own interests, which leads to world domination as a logical (though extreme) conclusion.

      Prize #1 China’s people resources.
      Prize #2 Russian/ ex soviet natural resources.

      These are all tactical moves to pursue the main objectives. An unholy set of alliances, regime changes and destabilisation (whatever works) within the Islamic world to put pressure on China and Russia in Central Asia.

      The bigger question for me is how long the US can keep Europe fully aligned with their goals. Right now Europe needs Middle East oil security and the US interfence help them achieve that. As the blowback from Middle East and Ukraine continues to hit Europe expect erosion of support for aggressive confrontation.

  6. susan the other

    I agree with Clive, this is a useful rundown of the facts. And for me it explains a lot of curious behavior on the part of Obama, Kerry and Putin. And now Netanyahu. The most interesting tidbit above was the sentence speculating on the motives of OPEC and the Saudis coming together with Russia to cooperate as oil producers, protect their industry and (my reading between the lines) work to mitigate global warming. In view of Helmer’s latest stuff on MH17, the info above also makes sense. I’m still puzzled about Ukraine in all this – looks like they were just used to strong-arm Russia into a more global cooperation. Maybe Ukraine was ready to explode anyway.

  7. Paul Tioxon

    A Real Politik assessment that only can come from someone who covers the global oil producing nations as a whole industry. Not completely unsurprising, but unusual in that the only constant in the social order is change and the people making sense out of the change have to look ahead to consequences real and unintended from political decisions that impact global energy production, particularly oil. The breakup of the Soviet Union was not just the fall of a single nation, but the fall of one of 2 Post WWII Global Hegemons.

    The failure of the Project for A New American Century as a bid for a unipolar, unilateral Militaristic American Hegemony has resulted in a shift back to the International as opposed to Global relations. The institutions of the Post WWII world, The United Nations, the IMF and the World Bank, with the emphasis on diplomacy as opposed to nation to nation warfare is being resurrected in the Iranian Nuclear Non-Proliferation Treaty. What has been nearly completely absent is the naming of the UN Security Councils permanent members, the victors of WWII were united in staring down Iran until they produced the desired results, namely, giving up on pushing its way into the nuclear power club. The re-establishment of normal diplomatic relations with Cuba is a corroborating development. Russia has worked with the US in Syria to eliminate the chemical warfare stockpiles of Syria as well as patiently worked to conclude a successful Iran re-approachment.

    Unfortunately, the overwhelming jargon of business from the last 4 decades of unrelenting Neo-liberalism likes to refer to ¨deals¨ and Western values, as if we clip money saving coupons to be redeemed at the bargaining table with Iran. And the war party demanded that a better deal could be had, what, they could get it for us WHOLESALE! Nuclear Non Proliferation was what was at stake and the UN Permanent Security Council Members were all present to negotiate the re-integration of Iran into the United Nations.

    Presidents Obama and Putin are more allied than not and the structure of an inclusive international social order are being worked out without the lies of the Bush family´s war party plans. The USA is not falling apart at the seams because other nations are finally enriching themselves, thus putting them beyond the simple command and control of Neo-con warlords. The USA is relatively weaker not due to being hood winked or conquered but because other nations have risen in their own capacity to direct self determination. Iran is welcomed to do so, just not with nuclear weapons. That is a good thing, in the eyes of the Iranians and the rest of world.

  8. Praedor

    I DO so hope it leads to a completely new alignment in the ME. I am sick to death of “Iran the great evil” bullcrap. It has always struck me as purely a childish temper tantrum on the part of the USA because the Iranian people had the GALL to toss out OUR murderous dictator and actually run their own country for their own people. Who do they think they are? How DARE they use THEIR oil for THEIR country rather than to serve Western oil company bottom lines and provide the US with oil that, by rights, belongs to it. Because America! That and the fact that the Iranians held some US neocolonials/neoliberals hostage for a year-ish. That’s unacceptable! Americans can do anything they want to whomever they want, damnit!

    The US still owes the Iranians much more than “regret” for overthrowing the first true and democratically elected SECULAR government ever in the ME (Mossedegh). Imagine what Iran and even the ME could have been by now if Mossedegh had been allowed to stay in rightful power? Iran would be a true beacon of liberty and freedom and modernity in the heart of the ME. Israel doesn’t even come close. They COULD have been a true, natural ally of the West (except for the “privatize everything” schtick the West has been stuck in for the last 30 years). Such a waste. All we’ve left behind us is chaos, jihadis, instability, death.

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