The Real Reason the U.S. Is Interested in Iran

Yves here. This is a straightforward overview piece on Iran. It’s sufficiently bloodless that it might be useful to pass along to friends and family members who might be imbibing a bit much of the “hate Iran” Kool Aid. It also explains why the US would want to dampen Iran oil exports, even with Iran possessing mainly heavy sour crude that generally isn’t economical to pump until prevailing oil prices are pretty high (the figure I’ve seen in the past is over $100 a barrel).

By Kurt Cobb, a freelance writer and communications consultant who writes frequently about energy and environment. His work has also appeared in The Christian Science Monitor, Resilience, Le Monde Diplomatique, TalkMarkets, Investing.com, Business Insider and many other places. He is the author of an oil-themed novel entitled Prelude and has a widely followed blog called Resource Insights. He is currently a fellow of the Arthur Morgan Institute for Community Solutions. Originally published at OilPrice

The American obsession with Iran is about oil and natural gas. If these two resources had been absent, it is hard to imagine such an intense American focus on the country from the time of a U.S. Central Intelligence Agency-backed coup of Iran’s elected government in 1953 to today. The Foreign Policy magazine piece linked above is based on declassified CIA documents and summarizes the coup this way: “Known as Operation Ajax, the CIA plot was ultimately about oil.”

This should come as no surprise. Iran was an oil power back in 1953 and it remains one today. Iran is presumed to have the third largest oil reserves in the world and the second largest natural gas reserves. Even if the numbers cited are somewhat inflated, Iran’s reserves are not small, and the country is likely to play a large role in world energy markets for many years to come.

The recent escalation of tensions between the United States and Iran because of the U.S. assassination of a prominent, popular and by all accounts highly effective Iranian general will allow the advocates of war to trot out all manner of excuses for such a war: terrorism, regime change, the credibility of the United States, Iran’s nonexistent nuclear weapons, and the United States’ geostrategic posture vis-à-vis big power rivals such as Russia and China. (Does anyone really know what the last one means?)

What won’t be discussed are the deep historical antagonisms which have developed starting with the 1953 CIA-backed coup. For example, few people remember that the United States supplied economic aid, dual-use (both civilian and military use) technology, training and arms through other countries to Saddam Hussein in the Iran-Iraq War. Saddam invaded Iran thinking he could take advantage of the chaos in that country right after the 1979 revolution. In this war Iraq attacked major Iranian cities including Tehran with ballistic missiles and used poison gas on the battlefield. Iran is said to have suffered over 1 million deaths during the eight years of conflict which also created a large class of disabled people.

It turns out that the Iranian focus on America and its worldwide military, intelligence (covert and otherwise) and diplomatic operations is but a mirror image of the American focus on Iran and its worldwide network of intelligence and allied surrogates that Iran uses to strike at the United States and its allies.

Behind it all are the vast stores of hydrocarbons that make Iran’s power possible and its importance substantial in the world. What is strange about this American obsession is that successive American administrations, both Republican and Democratic, have told us that soaring domestic production of oil and natural gas from shale deposits in the United States would free us from foreign sources and lighten our military and security burden abroad. “Energy dominance” became the watchword in the U.S. oil and gas industry.

U.S. net imports of crude oil have dropped from 10 million barrels per day (mbpd) 15 years ago to around 3 mbpd today. And, because of its vast refining capacity, the United States exports about 3 mbpd of refined petroleum products. While the United States remains connected to world markets, the country is far less dependent on foreign sources of oil than in the past.

For natural gas U.S. marketed production now exceeds U.S. consumption. The United States has become an exporter of natural gas.

So, why is the U.S. government and national security establishment still obsessing over Iran? Here are three possible energy-related explanations:

  1. There isn’t as much U.S. shale oil and natural gas as we are being told.

This is a real possibility. This independent report—actually an update of previous reports—concludes that forecasts of abundance by the U.S. Energy Information Administration are “extremely optimistic” and “highly unlikely to be realized.” The report is based on actual well histories and not industry hype about future resources.

Others who have started to look closely at the data agree that the industry has overblown the potential from shale. And, investors have finally wised up to the fact that the shale industry as a whole has done nothing but destroy their capital over the last decade, losing 80 percent of its market value as of the middle of 2019.

Free cash flow has been consistently negative for almost all the major players which has forced them time and time again to raise money through the bond and equity markets. Unfortunately for investors, these infusions didn’t stabilized shale players. Investors were just throwing good money after bad. Now those investors are finally pulling back.

In short, the shale boom is not sustainable financially or technologically. The “miracle” technology that is bringing oil and natural gas not previously available out of the ground has never been able to make the industry as a whole profitable. Eventually, that will be reflected in production numbers as investors only finance those few players and few prospects that can actually make money.

  1. Iran is a competitor of the U.S. oil industry.

Despite Iran’s vast oil and natural gas reserves, its exports have fallen dramatically due to sanctions placed on it by the United States and forced on other countries whose companies do business in America.

The cuts in Iranian oil exports have kept low prices in the oil markets from getting even lower and affecting U.S.-based oil operations negatively. By keeping sanctions in place and continually working toward zero exports from Iran, the U.S. administration is also helping to keep oil prices higher than they otherwise would be and this helps the domestic U.S. oil industry whether the administration intends this result or not.

  1. Iranian energy exports are a way for Iran to extend its influence.

Pakistan backed out of a pipeline project last year because of sanctions imposed by the United States on Iran. The pipeline would have brought Iranian natural gas into the country. The pipeline was originally planned to bring natural gas to India as well before that country pulled out of the project. The U.S. government clearly wants to prevent Iran from using its energy exports to give it leverage with other countries.

No one can say for certain whether current tensions between the United States and Iran will spiral into war. But remember: When they tell you it’s not about oil (and natural gas), you can be certain that these resources are at the center of American motives. Absent these resources it would be difficult to understand the United States’ decades-long obsession with Iran.

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94 comments

  1. Geo

    Thank you for this. It’s amazing how few people know this history. Good summary to initiate them.

    On a side note: saw a clip of Ollie North on Fox News complaining about Iran using ballistic missiles. Same thing he sold to them…. What a world.

    Reply
    1. Monty

      What makes a “ballistic missile” different from any other kind of missile? Is it self propulsion a.k.a not a shell, or is there more to it?

      They always describe the missiles we are supposed to be scared/outraged by as “ballistic”, but the adjective ballistic describes the flight of an object through space. So what’s different?

      Reply
      1. curious euro

        For questions like this, one should read wikipedia before posting somewhere.
        First two lines:
        “A ballistic missile follows a ballistic trajectory to deliver one or more warheads on a predetermined target. These weapons are only guided during relatively brief periods of flight—most of their trajectory is unpowered, being governed by gravity and air resistance if in the atmosphere. ”

        As opposed to other missiles, like e.g. a AIM-9 Sidewinder air to air missile which doesn’t have a ballistic course. Ballistic missiles generally have a long range due to their relatively short powering phase. They typically cannot hit a moving target either, only a predetermines coordinate. Due to all this, they are the preferred method to lob a nuclear warhead somewhere.

        Reply
        1. Synoia

          With a nuke moving or not moving target is a little bit irreverent.

          With a non-nuke warhead, buildings and infrastructure are the targets.

          Reply
        2. Tom Bradford

          There’s also the usage of the word ‘ballistic’ to describe a sudden, extreme and unexpected ‘explosion’ of anger, with undertones of unconsidered violence. While no doubt initially adopted from the public perception of ballistic missiles in action it has acquired a meaning of its own; ie “Trump went ballistic at the suggestion.”

          Reply
      2. PlutoniumKun

        I think they use the term simply because ‘ballistic’ sounds cool. All ‘ballistic’ means is that it has a boost which allows it to follow an arc dictated by classic physics, without or without some form of terminal guidance. Arrows, slingshots and javelins are ballistic missiles.

        Reply
        1. Old Jake

          With the introduction of MIRV technologies etc the term ballistic missile has become inaccurate, as most have some form of terminal guidance. The missile in this case, the QIAM series, is derived from Russian SCUD technology which in turn was derived from German (WWII) technology. However it is much more sophisticated than the SCUD, which itself was developed to the point that it had terminal guidance. These are only nominally “ballistic,” they do seem to follow gravity’s rainbow during at least part of the trajectory but they are far from powerred artillery shells.

          P.K. you are right, sounds cool, but only if you know nothing. (obligatory snarky self-satisfied comment)

          Reply
        2. RMO

          I think when most people hear the term “ballistic missile” it immediately brings up one thing in their mind: the Intercontinental Ballistic Missile armed with thermonuclear warheads which can hit and obliterate any given multiple square kilometer part of the planet in less than half an hour’s time from launch. It’s a very effective scaremongering term because of this association.

          Reply
  2. The Rev Kev

    Sorry but I am going to go off track here. So I was reading how the proven oil reserves in Venezuela are recognized as the largest in the world, totaling 300 billion barrels, when a thought occurred to me. What if, back in 1945, President Franklin D. Roosevelt had not gone to Saudi Arabia to meet King Abdul Aziz Ibn Saud to ensure US access to Saudi oil reserves, but had instead gone to Venezuela to meet President Rómulo Betancourt and made the same deal there?

    All this history to do with Iran and Saudi Arabia would have taken a completely different course. Sure the US would have tried to make sure that it was their hand on the oil pump of the middle east but Saudi Arabia would have just been another country. The US may have even bombed the place from time to time to punish the virulent Wahhabis there. But more to the point, there may have been no CIA-inspired take over of Iran and no return of the Shah. No 1979 Revolution then and no American hostages. What a different world that would have been then.

    So yeah, the location – and access – to oil shapes our political world.

    Reply
    1. Yves Smith Post author

      One thing to understand about “proven” reserves is that they are self-reported by OPEC members and that OPEC members have incentives to cheat because how much they are allowed to sell under the OPEC quota system was set on a pro-rata basis in terms of how much the member had v. OPEC total proven reserves. Before he died, peak oil Matthew Simmons had a pretty detailed analysis of how various OPEC members would suddenly and for no apparent reason make really big increases in their estimates of proven reserves.

      In particular, a lot of experts doubt Venezuela’s claims re the size of its proven reserves. For instance:

      During the 1980’s and 1990’s, Venezuela’s proved oil reserves were around 60 billion barrels. At that time this was nearly double the proved reserves of the U.S., but still well behind Saudi Arabia, which ranked led all countries with 260 billion barrels of proved reserves. Russia, Iraq, United Arab Emirates, Kuwait, and Iran all claimed more proved reserves at that time than Venezuela.

      Venezuela’s proved reserves slowly increased to reach 80 billion barrels by 2005, but then they began to grow exponentially as oil prices rose sharply. By 2010 the country’s proved reserves reached 297 billion barrels, leaping over Saudi Arabia to become the country with the world’s largest crude oil reserves.

      Was this massive increase in its proved reserves a result of huge new oil discoveries in Venezuela? No, it was actually a function of how proved reserves are defined…..

      There are many variations of the definition of proved reserves, but most of them are similar to that of the Securities and Exchange Commission (SEC): “Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible–from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations.”

      There are three important qualifiers there. The first, “economically producible”, refers to the portion of the resource that is economic to produce given prevailing oil prices and available technology. The second is “reasonable certainty,” which is generally defined as 90% probability. Finally, “a given date forward” has been clarified by the SEC to mean that undeveloped reserves may be classified as “proved” if the development plan for those reserves provides for drilling within five years of being booked….

      In 2007 the average annual price of Brent crude rose to $72/bbl, and estimates of Venezuela’s proved reserves began to increase. Just as it looked like the investments of Western companies like ConocoPhillips COP +0% and ExxonMobil XOM +0% would pay off, the Venezuelan government expropriated these heavy oil investments.

      By the time oil prices reached ~$100/bbl, the estimate of Venezuela’s reserves had grown to nearly 300 billion barrels. But as shown in the previous graphic, that number has not been adjusted back down as oil prices have declined. The amount of oil that can be economically produced at $50/bbl is definitely a lot lower than what can be economically produced at $100/bbl, so that suggests that at current prices Venezuela’s proved reserves are overstated..

      https://www.forbes.com/sites/rrapier/2016/07/01/venezuelas-oil-reserves-are-probably-vastly-overstated/

      So we have an additional issue with Venezuela: it has way more legitimate “proven” reserves when oil prices are high, but it apparently doesn’t see fit to lower those numbers when oil prices slip.

      Reply
      1. Susan the other

        So”reserves” means profitable reserves. Under normal circumstances (which really don’t exist) the oil market determines profitability. But the oil market is now hostage to demand. I’m wondering if now in our self-induced low productivity world we are looking at self induced stranded assets to maintain profits. If I were looking for explanations for this oil war I might be inclined to blame it on the push to create a monopoly on a diminishing but still strategic resource. As long as there was demand it was easy to set a price, but now how can they do it? One way is to have very few providers. Israel is going for it. Even Turkey jumped in with Libya. (Maybe that means the deal with Russia for Turk Stream is off?) By this logic our interest now in Iran is to prevent Iran from becoming a big player in oil and natgas. And their puzzling ballistic missile attack on Idlib and another northern US base seems to indicate that Iran is interested in running its own pipeline thru Syria. To get themselves out from under our control; a second outlet besides Hormuz. And conceivably it could screw up the planned profits of all the other players.

        Reply
        1. RBHoughton

          I’m with you Susan. Thanks for posting. I think an economic determinant that is fundamental (and all the economists on this site will soon tell me) is that national wealth tracks energy use. Using this determinant back-to-front, we Westerners may feel, if we can reduce the energy consumption of countries we hate, they will become poor and reliant on our largesse.

          This may not entirely explain Iraq, Iran, Syria, Libya and Venezuela but it could very well do.

          Reply
    2. vlade

      In addition to Yves post, Venezuela’s oil is heave-sour, while Saudi’s light-sweet. I.e. Venezuela’s oil is harder to process (it has higher sulphur content – sour – and more complex, long molecule carbohydrates – heavy).

      I believe that since WTI is sweet light oil, most of the US refineries are geared towards that. Although I had heard they were planning to move towards the heavier/more sulphur content but all this is really vague recollection and better commented on by somoene in the US oil industry.

      Reply
      1. Amfortas the hippie

        “Refining capacity in the Gulf Coast has large secondary conversion capacity including hydrocrackers, cokers, and desulfurization units. These units enable the processing of heavy, high sulfur (sour) crude oils like Mexican Maya that typically sell at a discount to light, low sulfur (sweet) crudes like Brent and Louisiana Light Sweet. Many East Coast refineries have less secondary conversion capacity, and in general they process crude oil with lower sulfur content and a lighter density. This lighter, lower sulfur crude oil commands a premium price on world markets. “–(https://www.eia.gov/todayinenergy/detail.php?id=8130)
        (and see:https://www.dallasfed.org/research/economics/2019/0409)

        my dad lives in Clear Lake, Texas, and we get there by passing through Pasadena, etc…miles and miles of refineries and related chem-plants.
        Texas City is on the back road to Galveston, as well.
        There’s been some visible movement at a couple of the larger pipe cities towards re-jiggering refining capability…most visible was a gigantic cracking tower(dad’s words—he’s peripherally connected to oil/gas industry) at one of the larger refineries on US 225….biggest two cranes i’ve ever seen…the tower was the size of some of the buildings in downtown houston. dad said it is intended for venezuelan oil.
        usual caveats, re: second/third-hand anecdote, apply.

        Reply
        1. Susan the other

          My impression has been that the Koch refineries on the Gulf are for heavy crude and that they are anticipating Oil from Venezuela. Can’t remember where I read that, probably here.

          Reply
      2. rd

        Canadian oil sands crude and Venezuela crude are roughly equivalent. Refineries in the Gulf Coast set up for Venezuela’s crude can process Canada’s heavy oil from oil sands. That is why both Alberta and the Gulf Coast refineries are getting frustrated with the inability to get pipelines built from Alberta to the West Coast in BC or down through the Mid-West to the Gulf Coast.

        Reply
      3. rjs

        no, vlade, most of our Gulf-coast refineries are configured to process heavy-sour crude, such as that from Venezuela…the embargo put a big dent in our refinery utilization for half a year as we paid thru the nose for Russian Urals to replace it…

        i touched on that last week when our oil exports hit a record high: prior to January 2017, our oil exports were minimal, because by law they had been outlawed for 40 years, with the exception of oil exports to Mexico and Canada, which were allowed under provisions of the North American Free Trade Agreement (NAFTA)…since that time, however, our exports have steadily risen, often limited only by the number and size of ships that could be loaded in one week and the number of ports which could provide such loading (which also accounts for the volatility you see in the chart above)…note that while we’ve been exporting an average of around 2,981,000 barrels per day this year, up 51.5% from 2018, we have at the same time been importing an average of 6,812,000 barrels per day…the reason for oil coming & going like that is that most US refineries can’t use most of the oil coming from US shale wells, which is light and sweet, because they are configured to use the sour and heavier oil that we had been importing before the shale boom…so we’re exporting what is actually a premium quality oil from our own wells, while at the same time importing the poorer quality, heavier sulfuric oil from overseas that many less complex foreign refineries can’t use…

        Reply
      4. rjs

        a further explanation of what happened to our refineries this year (graph from three weeks ago is linked):
        with US refinery inputs consistently below those of a year ago, we’ll include here a graph of those, so we can try to see what has been happening…

        the above graph of US refinery throughput came from a newsletter emailed daily by John Kemp, senior energy analyst and columnist with Reuters, which you can sign up for free here; it shows US refinery throughput in thousands of barrels per day by "day of the year" for the past ten years, with the past ten year range of our refinery throughput for any given date shown as a light blue shaded area, and the median of our refinery throughput, or the middle of the 10 year daily range, traced by the blue dashes over each day of the year….the graph also shows the number of barrels of oil refined for each week in 2018 traced by a yellow line, with our year to date oil refining for each week of 2019 traced by the red graph…we can thus see that with a few exceptions, 2018’s refining in yellow had been at the top of the historical range for most of the year, and that pace of refining in 2018 was generally beating the records set in 2017 (not shown)…however, with the sanctions imposed on Venezuelan crude at the end of January of this year, US Gulf coast refineries, which are configured to process the heavy sour crude that Venezuela produces, could not come up with adequate replacements for that crude to run at their optimum pace, and as you see, US refineries ran nearly 5% below the prior year’s pace through winter and spring, ​ultimately ​buying boatloads of Urals crude from the Russians to replace the Venezuelan crude they’d lost…then, just when those refineries were starting to get back to near normal early this fall, the Keystone pipeline carrying heavy sour crude from Canada sprung a leak and was shut down, again interrupting the flow of the type of crude those refineries need to run at their optimum...there ha​s been an effort to replace that loss with releases from the Strategic Petroleum Reserve, but that was only marginally successful…but even though the Keystone pipeline has been up and running again for weeks now, US refinery utilization still continues nearly 5% below the prior year’s seasonal norms…..

        Reply
    3. PlutoniumKun

      A key point about SA oil is not just that they have a lot of it – its pretty much the ‘perfect’ oil for extraction and processing. Its close to the surface in very high performing fields and so very easy and cheap to extract, with reserves conveniently close to deep sea ports. Its also a very light and easy to refine grade. Venezuelan oil is heavy crude and generally expensive to extract and process. In reality, most of it can almost certainly never be economically extracted. In fact, much of the problems facing Venezuela right now is that they invested far too much money in trying to develop fields which are only profitable with $100 a barrel oil.

      Iranian oil is not nearly as cheap to produce as SA’s, and much of the best reserves have already been worked out. However, its still seemingly profitable. But the real future for Iran is in gas, it has gigantic reserves most of which are largely untouched.

      Reply
      1. kimyo

        Its also a very light and easy to refine grade.

        World’s Most Important Crude Oil Grades

        Arab Light (5.5 million barrels/day): It is the world’s largest crude grade which is produced by the state-owned Saudi Aramco in Saudi Arabia. Its name is misleading since it is classified as a medium sour grade. Its sulfur content is 1.96% and the API gravity is 33.3°.
        Arab Heavy (1.9 million barrels/day)
        Arab Medium (1.2 million barrels/day)

        if the linked article is correct then the vast majority of saudi crude is medium/sour.

        also see figure 5 (showing essentially zero light/sweet production over the last 6 years) oxford energy (pdf)

        Reply
    4. Felix_47

      When Saudi Arabia wanted to get more money for their oil after JP Getty offered them more the majors refused and they held all the cards since they controlled and owned Aramco. So our state department came up with the idea of having Saudi Arabia tax Aramco with a 50% tax (used with Venezuela during the war) to extract more money and sold it to the majors by getting a ruling from the Treasury that they could write the royalty off their US taxes so it would cost them nothing. Thus the US taxpayer financed the loss of Aramco to Saudi Arabia. And although the powers thought the 50/50 split was fine for Saudi Arabia they did not want to see it in Iran and thus ultimately the takedown of the democratic government. The Saudi dictatorship was created and financed by the US by the long suffering US taxpayer. Had we not had these tax law changes aimed at keeping the Saudis happy with yachts, European mansions and women the majors would have held control of Aramco until something like 2006 (from what I recall) and there was nothing the Saudis could have done about it. The loss of control of oil in Saudi Arabia and the ceding of the oil weapon was done by the US and the secondary effects of worldwide Wahabism were financed by our bad decision making. I urge all to read, once again, Daniel Yergin’s The Prize. It ought to be mandatory reading in every schoolroom in the US.

      Reply
    5. drumlin woodchuckles

      I have read that a lot of that oil reserves is not really oil at all. What it really is is sandy tar and tarry sand, just like the tar up in Alberta.

      https://www.chemeurope.com/en/encyclopedia/Orinoco_tar_sands.html

      Here’s a whole bunch of images. Some of them may come from very good URLs

      https://images.search.yahoo.com/search/images;_ylt=AwrJ6ytwfBZeo7gATzdXNyoA;_ylu=X3oDMTEycHBtMWNzBGNvbG8DYmYxBHBvcwMxBHZ0aWQDQjY4MzNfMQRzZWMDc2M-?p=orinoco+tar+sands&fr=sfp

      Reply
  3. ahimsa

    Iran launched missile attacks on Allied bases in Iraq in the night.

    E. J. Magnier reporting Iran claiming a legitimate retaliatiatory response and it is not the start of war: https://twitter.com/ejmalrai/status/1214824380775223296

    USA reporting no fatalities and no intention to retaliate.

    As Magnier points out, this is really major: a nation state launches missile attacks against U.S. bases. Then stands up internationally and claims responsibility for the attacks.. and expects USA will climb down!?

    Reply
    1. The Rev Kev

      ‘and expects USA will climb down!?’

      Well why not? I can think of another country that tried to sink a US Navy ship, killed 34 Americans, wounded 171 others, and made plain that it wanted to kill the survivors – and America covered it up for them.

      Reply
      1. The Rev Kev

        Meanwhile, the US Air Mobility Command is currently rushing emergency replacement supplies of underwear and briefs to field units at those air bases attacked.

        Reply
    2. Heraclitus

      I heard about the Iranian missile strikes while driving home last night. In my opinion, it is no accident that no Americans were killed (as far as we presently know). Iran wanted to protect its honor, knowing that the US would not escalate if there were no American casualties. I think there is unlikely to be further action on the Iranian or American side.

      This is exactly how dueling worked in the 19th Century. We only remember the duels in which someone was killed, like Hamilton/Burr. In most duels, the seconds altered the guns such that both duelists missed their target. Both parties honor was saved. Both could, in some way, declare victory. It is my understanding that this was the outcome of most 19th Century duels.

      Reply
      1. JJ

        Iran does not want a war. They are focused on preserving their regime, and they know they will be obliterated if retaliation is bloody. This is all a posturing show on both sides to save face, appease the base, and allow Iran and US to slowly with draw from Iraq. With Israel’s blessing of course.

        Reply
    3. PlutoniumKun

      It seems more likely to me that the attack is part of a co-ordinated set of de-escalation actions – attacking a US base allows Iran to save some face in the short term, but with no casualties, Trump won’t feel obliged to retaliate directly.

      Reply
      1. fajensen

        My Syrian colleage insists the whole thing (except the plane crash*) was scripted and signed off from the beginning. He claims that quite possibly someone high-up in Iran wanted Soleimani whacked because he was getting ‘too big to manage’ for those people.

        OTOH – Any Arab can give The Internet a pretty good fight when it comes to conspiracy theories.

        He thinks the plane crashed because it was hit by one of the 20+ missiles that nobody knows they where landed, I think someone no-in-the-loop put the air defences on ‘Paranoid’ and forgot to set the systems to ‘Manual’!

        Reply
        1. Ignacio

          It seems experts do not buy the missile theory. Mine is that the technical service passed by the plane on monday resulted in some mistake that caused the accident.

          Reply
    4. The Historian

      It looks like Iran is just doing what Trump himself did with the Shayrat missile strike in Syria in April, 2017. If Iran really wanted to do serious damage they certainly could have but I think this strike was just Iran’s way of calming down its own war hawks, much like the Shayrat missile strike by the US calmed our warhawks for a while.

      What happens now is dependent on how Trump reacts. Maybe we will hear today in his speech.

      Reply
      1. The Historian

        Just watched Trump’s speech – given this was Trump, he was very restrained. It was the usual, no nukes for Iran, it was all Obama’s fault, the usual puffery about all the amazing things Trump has done, Soliemani was a terrorist, etc.
        The major takeaway was that there will be no escalation – only more sanctions on Iran – like that is new.

        it was interesting that he mentioned Great Britain, Germany, Russia and China though, since they’ve been very quiet lately. And he wants NATO’s help – yes, that same NATO that seems to want to pull out of all of this.

        I did love the looks that general standing over Trump’s left shoulder kept giving him – like he was amazed at what was coming out of Trump’s mouth.

        Reply
        1. PlutoniumKun

          From my quick reading of the news, it looks like Trump, or the people around him, have panicked a little at the hornets nest they’ve stirred up. Somewhere, formally or informally they let Iran know that a proportional attack in which nobody gets killed (or at least, nobody American) would not be subject to a military response. And its in the Iranians interest to be seen to get some revenge.

          Reply
          1. GF

            On NPR this morning a ME correspondent off handedly mentioned that Iran informed NATO before the missiles were lauched that they were coming and where the targets were. Sorry I can’t find the link right now.

            Reply
            1. bernie karpf

              I read that Iran informed the Swiss Embassy (which is the USA communication device with Iran) an hour before of the coordinates. It was on Moon of Alabama.

              It is not clear to be that the escalation has stopped. Not from the Western side anyways. ‘Taking out’ this important Iranian figure, to my thinking, is a whole new ballgame. I don’t trust that the USA is done with false flags. Nothing makes sense as regards the killing except the USA is attempting to drag Iran into a war.

              Reply
  4. Johny Conspiranoid

    Is it not the case that shale oil requires more energy to extract than is present in the oil extracted?

    Reply
    1. Ignacio

      I don’t think so but net energy is lower compared with conventional oil. EROEI of shale oil, according to 2010 estimates varies between 2-16:1. (Wiki) .

      Reply
      1. JTMcPhee

        Not a single mention, in among the economic-geopolitical analysis here, of the environmental-collapse “costs” of all this extraction. Methane, far worse gas re global heating, https://www.thenation.com/article/global-warming-terrifying-new-chemistry/ And of course despite all the promises of perfected technologists that fracking (and pipelining and freight-training) of extracted carbon products) is “good technology” and “well-controlled,” we get this bit of superlative-reporting: Blowout At ExxonMobil Fracking Site Among Worst-Ever Methane Leaks In US
        https://www.naturalblaze.com/2019/12/blowout-at-exxonmobil-fracking-site-among-worst-ever-methane-leaks-in-us.html And of course in the current heightened (incrementally worse than under Obama and prior administrations’ behaviors) “government legitimization by policy” fire sale, there’s this bit on making a bad problem, the externalities resulting from transporting extracted petroleum, even worse:

        As Resistance Halts Pipelines, LNG and Tar Sands Move via Rail
        December 3, 2019

        The Trump administration is considering a proposal to move fracked gas by rail at the behest of a company owned by Milwaukee Bucks billionaire owner Wes Edens, a major donor to the DNC. As tar sands pipelines are halted, more carbon-intensive crude moves along the tracks. https://therealnews.com/stories/resistance-halts-pipelines-lng-tar-sands-rail-train

        Not a bit of a mention of “externality” costs in all of this — costs which insurance people and other actuaries have been quantifying, largely on the sly or at least without a lot of fanfare, for some time. http://blogs.reuters.com/muniland/2012/01/13/frackings-externalities/

        But of course “The spice oil MUST flow.”

        So the Great Power Guys (and Gals, Jeanne Kirkpatrick, Madeleine Albright, Condoleeza Rice, Her Royal Gratingness Hillary Clinton etc.just from the Imperial stable) just keep on with that aptly if unconsciously accurately named Game of RISK! ™, while the biosphere figures out how to chuck us humans off the planet.

        “Not survival-capable” parasitism.

        Just another entry in my list of “stupid human tricks.”

        Reply
    2. PlutoniumKun

      To clarify – ‘shale’ oil requires a lot of energy to extract, but nobody extracts this now as its uneconomic. When people refer to ‘shale’ oil they really mean ‘tight’ oil which is light grade oil within suitable geology which can be extracted through fracking or similar types of operation. Fracking requires more energy that conventional high performance wells, but not by any huge degree, so in answer to your question, ‘no’.

      There is a useful explainer and charts here.

      Reply
      1. Off The Street

        Fracking has seemed to me to be a useful marginal source mainly to achieve some geo-political ends. Achieving some measure of US energy independence, if only for a short or indeterminate term, has been a way to diminish the impact of volatility in the Middle East on world economic affairs. That also helps absorb a lot of excess capital sloshing around seeking returns, so exploitation of distant and marginal plays relies on that cheap capital. The mottoes might as well be Do it while you can, and can finance. If you can drill it, they will come, with buckets of money.

        Combine the independence feature impact with the symbolism and effect of that famous picture of Trump and various sheiks, emirs and such around the glowing orb, and toss in the house arrest sheikdown, er, shakedown, of those Saudis. It isn’t far-fetched to look at the evidence of a greater role for some of those GCC countries in minding their own backyards, whether in Syria, Yemen or Iraq. That is a Middle East variation on the policy of the US billing NATO countries to live up to their agreed budget shares, giving locals more some skin in their mutual defense game. How long will that cooperation last?

        Iran is a chief local destabilizing element due to Hezbollah and other proxies. Getting them more isolated, pliable and eventually compliant with would in theory help the entire region calm down for a while, with benefits to their citizenry that has suffered due to sanctions. Lower geo-political risk, for whatever duration, would also help in the region and throughout the OECD world. Face-saving missile launches, now reported as tapering off, should be a sign of hope. I’m optimistic about the likelihood of lower tensions.

        Reply
  5. Ignacio

    By this time you must have known about a retaliatory attack has been conducted by Iran against US bases in Iraq. Is conflict escalation going according to plan?

    One should be extremely naïve to believe that the main US interests on Iran are others than oil&gas. For me it is obvious that closing the spigot for Iranian oil or Russian gas (Nordstream2 sanctioning) has all to do with economic interests of US producers&consumers as seen by the stablishment. The “molecules of freedom” under US soil become “molecules of evil” in those countries not under direct or indirect control of US. Free-market is what the US dictates FULL STOP.

    It was in the US where the oil industry was initially developed to become what it is now and I guess some minds believe that this gives the US a right to exploit oil resources everywhere. This has also resulted in an economy that is highly dependent on access to cheap oil, like the Chinese economy is now highly dependent on cheap coal. The military and economic strenght of the US cannot hide the weakness of being so dependent on a resource that is being exhausted at a fast rate at home. It seems the US stablishment considers that changing the development model to a less oil intensive one is far more difficult than trying to keep control of fereign oil at whatever cost (human and economic). To be sure there is a part of the US very much interested on reducing this dependence but they are not in charge of foreign policy or the US plays a double game just in case. The US, with about 5% of total world population, consumes 22% of oil and wants secured access without the competence of, for instance, the 17% that China consumed by 2018.

    Bear in mind I am making this comments from a country which is also highly dependent on oil. I am not tempted to signal any country as evil (who isn’t somehow?), but how US governments have pitifully taken a path of domination and confrontation that doesn’t bode well for anybody.

    Reply
  6. Dr Duh

    Nice to see a mention of the role of restricting oil supply in geopolitical decision making.

    I always thought that the narrative around the Iraq war, i.e. that we were after their oil, was kind of over-simplistic. Exxon grosses a billion dollars a year from its share of the West Qurna field in Iraq (1), which while not peanuts, is but a drop in the bucket of it’s $279 billion dollars of revenue in 2018 (2). What was more significant was the effect of the war in goosing oil prices from a low of $28 in 2002, to up above $80 for most of the next ten years after the war.(3) Exxon benefited handsomely with net income almost doubling from $11 billion in 2002 to $21 billion in 2003, and climbing to $45 billion in 2008. (4)

    Now that oil prices are stuck in a $50-60 dollar price rut, while global, Middle East and Iraqi oil production are all at an all time high (5) it seems like taking a little supply off of the table would be convenient for certain parties.

    On a side note, this piece is sort of one sided in the way it underplays the build up to the assassination of Soleimani. As I read it, there was a steady escalation between Tehran and Washington as the US tried to tighten sanctions that the Iranian government (perhaps correctly) views as an existential threat, e.g. steady amping up of Iran’s uranium production, Iran shooting down the US drone in June, cruise missiles hitting Saudi oil production facilities in September, Britain seizing the Iranian tanker in Gilbraltar, followed by the Iranians seizing a British tanker, Pompeo warning Iran over the summer that killing Americans would be a red line, the Iran backed militia launching a rocket attack that killed an American contractor in Kirkuk, a subsequent retaliatory strike against the militia, then militia forcing attempting to overrun the US embassy in Baghdad.

    Pretending that this is all just the Crazy-Orange man’s fault plays well politically but elides the fact that it takes two to tango and, more importantly, there is the possibility of mutual miscalculation when both sides would be better served by avoiding open war. And make no mistake, Trump is well aware that it is in his best interest is to avoid open war and has taken steps to de-escalate, he removed Bolton who was a pro-regime change hawk and he has abruptly cancelled the retaliatory strike in June after the drone was shot down (6)

    In a similar vein the article repeats the conventional wisdom that the CIA overthrew Mosaddeq, when the actual efficacy and importance of the CIA’s efforts versus that of domestic military and religious elements is debated.(7)

    To be clear, I’m not defending Trump much less the CIA, merely advocating for a more nuanced read of the situation that will permit better forecasting, similar to what you provided around Grexit.

    1. https://en.wikipedia.org/wiki/Petroleum_industry_in_Iraq
    2. https://www.statista.com/statistics/264119/revenue-of-exxon-mobil-since-2002/
    3. https://www.macrotrends.net/1369/crude-oil-price-history-chart
    4. https://www.statista.com/statistics/264120/net-income-of-exxon-mobil-since-2001/
    5. https://yearbook.enerdata.net/crude-oil/world-production-statitistics.html
    6. https://www.nytimes.com/2019/09/21/us/politics/trump-iran-decision.html
    7. https://foreignpolicy.com/2019/11/21/dont-blame-washington-1953-iran-coup-mosaddeq/

    Reply
    1. JP

      OK, #7 is especially interesting. No where in these comments do I see what I was given to believe was one of the primary reasons for instituting the regime of the shah. That is the forward listening posts and general containment of the Soviet Union.

      Reply
  7. David

    I’m sure that economics has something to do with this problem, because it always does. But to really understand the origins of the western neurosis about Iran you have to go back to the 1970s and the position that Iran occupied before the revolution. In those days, Iran was what a combination of contemporary Israel and Saudi Arabia would be, so far as its importance went: it was the foundation of western policy in the Middle East and South Asia, a massive market for western technology and weapons, and a shop–window for the modernisation of the region according to western liberal lines. Failure to foresee the 1979 revolution was probably the largest single western policy failure since the Second World War and the shock of it was almost physical at the time to western policy elites. It hasn’t really faded since, in my experience.

    What made it worse was the clever solution that the West came up with to stop Iran falling into the hands of the Communists which was then believed highly likely. The solution was to send back to Iran an obscure cleric living in France, to try to draw popular support away from dangerous radical organisations that might act contrary to western interests. So Khomeini was sent back to Iran on what was basically a French government flight, surrounded by aides and journalists, to safeguard western interests in the country by promoting, it was expected, a conservative and traditionalist political and social message. If the failure to anticipate the downfall of the Shah was a catastrophic mistake, the failure to understand the consequences of the return of Khomeini to Iran was an order of magnitude worse, and more stupid. The West has never forgiven the Iranians for humiliating them in this way, and for the consequences of their own stupidity.

    What made it worse, was that virtually nobody in the West had any idea what an Islamic Republic would actually be like, and there was very little understanding at the time of the nature of political Islam anyway. The threat was from Communism, and that was where the vast majority of the interest and the research went. Moreover, Islam was the one international system of thought which had not originated in the West, or which had not been westernised, like Buddhism. Just by existing, the Islamic Republic and its ideology were an existential threat to the west, and to the assumed domination of western ideas, which became even more a feature after the end of the Cold War. Iran this became a kind of fantasy world which we did not understand, and did not try to, but represented everything which was un-western, un-modern and un-liberal. Even the most experienced foreign policy practitioners in the world today were at university at the time of the revolution, and so what we are seeing is effectively a third generation set of attitudes, largely based on the generational transmission of unthinking hostility and profound ignorance, and which has no obvious endpoint because it’s based on the impossible objective of wiping away a past humiliation.

    Reply
    1. Ignacio

      Do not forget that the islamic revolution had a lot to do with the failures of westernization via the UK-US imposed Shah. Iranians could clearly see the hipocrisy of it when they wanted to nationalise the oil under a non islamic nationalistic regime. The islamic revolution was already underway and would have occured even if the French didn’t pay Khomeini’s fligth tickets. The Shah fled more or less at the same time as Khomeini arrived.

      Reply
      1. David

        There was an important gap of about two weeks between the departure of the Shah and the arrival of Khomeini, during which the PM, Bakhtiar, was desperately trying to put an interim government together. There would not have been a Islamic Republic without Khomeini, because he was the ma who theorized it. None of the other islamic leaders was calling for anything like that, which was contrary to the Shia tradition of political quietism. In Khomeini’s absence, the most likely outcome would have been an uneasy accommodation between liberal political forces, religious leaders and the military, probably opposed by the forces of the radical Left. It was Khomeini’s return that made the difference because he was a skillful politician and knew what he wanted. he disguised his real objectives until it was too late.

        Reply
        1. JTMcPhee

          Maybe sending Khomeini back to Iran was a little like (history rhyming) shipping Lenin back to Russia? https://www.smithsonianmag.com/travel/vladimir-lenin-return-journey-russia-changed-world-forever-180962127/ So much “Western” effort to dominate and loot the world, full spectrum-full-stop, so much stupid grasping effort by the Elites to “win” the Great Game, frustrated by little sparrow wings fluttering here and there — Lenin, Khomeini, others. Hajjis in the mountains of Notagainistan, running on pride and deceit and mastery of terrain and tactics, people who know who they are, kicking empires out of their lands so they can keep their cultural bones intact…

          I recall a jocular piece in Playboy poking fun at Khomeini’s writings to minimize him, writings from his exile in France which contained (as do the sumptuary rules in the Pentateuch) prescriptions on how to remove the stain of uncleanliness after copulation with a goat, a sheep, a dog. https://biblehub.com/leviticus/18-23.htm Then, as noted, the bushy-browed heavily bearded cleric drops like that last crystal into a supersaturated solution, https://sciencing.com/make-supersaturated-solution-4885939.html, and WHAM! An Islamic Republic! Hostages! Constitutional Crisis At Home (Iran-Contra-arms-for-hostages!) lots of history to parse, to try to sort fact from FUD: https://en.wikipedia.org/wiki/CIA_activities_in_Iran

          While examining the entrails, one might ask oneself a bigger question: what kind of political economy do “we” (whoever “we” might be) want? And a follow-up: where do “we” fit into the planetary ecology, and how long can “we” get away with crapping in “our” own nest and eating “our” seed corn?

          Reply
        2. Ignacio

          And Khomeini found very “fertile” discontent after 25 years of the Shah and he was probably radicalized by the US-UK-led coup as well as the following authoritarian Shah regime. He was very vocal when, in the middle of the Shah regime, it was decreed impunity to US citizens for any crime commited in Iran while the Shah’s Savak was commiting tortures (probably lots of them in a daily basis) on iranians. He would almost certainly found his way without any help.

          IMO, the mistake was not to send Khomenei but to believe that by regime change Iran could be “Westernized” through an authoritarian regime, keep calm and politely follow US rules and ruthless resource exploitation.

          Reply
    2. PlutoniumKun

      Yup, I don’t think there is any reason to think that the US’s obsession with Iran has much to do with oil and gas. Its a factor, certainly, but not a central one.

      Apart from the history (and the weird psychology associated with it) you’ve pointed out, the briefest glance at a world map or some reading on history would show that Iran/Persia has always been one of the most important strategic nations/landmasses. The country has been a high grade civilisation and major regional for millennia – for a very good reason related to its strategic position. Every armchair geo-strategist (and Washington seems to be full of them) will know that whoever controls Iran has a finger on a key artery for the entire Eurasian landmass.

      I’d also note another issue which is rarely discussed – the outsized role of the Iranian diaspora. The US attracted pretty much the upper middle class of Iran after the revolution, and just like the same socio-economic group in Cuba, they have a very strong interest in keeping their host country ‘interested’ in the wrong way in their own country. I wouldn’t discount in any way the impact these people have on US politics in keeping the pot boiling.

      Reply
      1. Ignacio

        On the contrary, I believe that UK-US led Operation Boot or Ayax (regime change and removal of Mossadegh) was very much because oil and then the Anglo-Iranian Oil Company (later BP) was created to exploit Iran’s oil extensively. Mossadegh’s government was nationalistic and could not be signalled as pro-Russian in any form. In fact, many consider that this operation was the root cause of the islamic revolution.

        Reply
        1. Watt4Bob

          Actually, Britain had been controlling Irans oil since 1908, the year the Anglo Persian oil co. was founded.

          Coincidently, the year that Britain and the USA decided in concert to fuel their respective naval armadas with oil instead of coal.

          When Mossadegh’s government nationalized it oil, Britain made the decision to share its control over Iranian oil with the USA in return for our help in over throwing Mossadegh and installing the Shah, and by that regaining control over Iranian oil.

          The Russians, Chinese, Iranians, and much of the rest of the ME is Currently engaged in the same effort that led to Muammar Gaddafi’s assassination, that being a plan to sell oil outside of the US dollars reach, a major feature of the New Silk Road and Belt initiative.

          The Saudis, and even Qatar are signaling willingness to cooperate and that is where the USA/Trump’s panic is rooted.

          Mossadegh, Gaddafi, Ali Khamenei, all represent the same threat, and now, due to America’s blundering, almost all the rest of the ME together with Russia and China are scheming to end the Anglo-American empire’s dominion over the world oil market.

          I don’t see any way that the USA can stop this effort, because as I’ve noted before, you can walk from Being to Paris, and the best route, the historic route, will take you through Iran.

          The world is speaking, and they are saying, “we’ve had enough”.

          Reply
        2. PlutoniumKun

          Just to clarify – I meant the present day situation. Historically of course Iran was a strategically vital source of oil to Europe, especially during WWII and the immediate aftermath.

          Reply
        3. David

          The causes of the overthrow of the Shah are still very much debated, but probably have little to do with Mossadegh. Essentially it was an uprising of the urban poor, left behind by modernization and westernization (sounds familiar?) and looking to some extent to the mosque for leadership. It’s in some senses a precursor to the 2011 Arab Spring, and the mass demonstrations of 1978 were directed against the Shah, not the US. The US only really became a direct target when they allowed the Shah into the country as an exile. I always find it amusing that when the US doesn’t see itself as the source of the world’s solutions it still sees itself as the source of the world’s problems. It’s not about you, guys, it’s about them.
          Johnson, by the way, was very good on North Asia, which was his speciality, but I wouldn’t rely on him for other areas of the world.

          Reply
            1. David

              That’s not a bad summary actually (not to say an exhaustive one) and quite properly puts the main emphasis on internal Iranian factors rather than the foreign dimension. My point was (and perhaps I should have included some meta textual indicator of irony) that the West in general, and the US in particular, find it hard to believe that anything happens in the world without them being involved and even responsible. One group proclaims the need and virtue of intervening everywhere, whilst the other sees the hidden hand of the West in every war or revolution. This is why, for example, most books by Americans about Vietnam are not about Vietnam at all, but about America. The Vietnamese are just extras.

              Reply
              1. bob

                From the link-

                “and being deposed in a military coup d’état organized by an American CIA operative and aided by the British MI6. Thus foreign powers were involved in both the installation and restoration of Shah Mohammad Reza Pahlavi. ”

                does not equal

                “quite properly puts the main emphasis on internal Iranian factors rather than the foreign dimension.”

                Foreign governments installing the head of state is not “interal Iran factors”

                The both sides’ing of this is straight up Agitprop. There are a lot more than two alternatives, but one of the biggest reasons, results and objectives of foreign interference, once again-

                “and being deposed in a military coup d’état organized by an American CIA operative and aided by the British MI6. Thus foreign powers were involved in both the installation and restoration of Shah Mohammad Reza Pahlavi. “

                Reply
              2. Ignacio

                Your division on those two groups is unfair. At the end of the day, we cannot call a hidden hand when the US doesn’t find kosher the nationalization of national resources and promotes a coup de etat that ends in an authoritarian regime lasting 25 years, with its fake westernization, later arms and helps financially a war led by a neighbouring country which is in turn later invaded by the US after its failure plus another invasion in another neighbouring country.

                Reply
                1. Ignacio

                  Not to mention the construction of military bases here and there plus the deployment of armadas in the vicinity. A soft hidden hand?

                  Reply
          1. elissa3

            You bring up a valid point. As an apprentice in a French movie production company, I remember the anecdotes of colleagues just returned from an international film festival in Teheran. They had been guests at a gala given by the shah’s wife. By their account, the grounds of the palace had dozens of impressive, beautifully-lit fountains. A (literal) stone’s throw from these fountains lived thousands of people who had to walk a few miles, in the opposite direction, just to secure water to drink.

            Reply
      2. Jean

        You think the Saudi’s will price oil in anything other that $US? I’m doubtful of that, but agree with most of what you wrote. The US doesn’t want Iran’s oil or gas, it wants control of them. That they be priced in US dollars and the industry is opened to corporate interests. US power comes from most resources in the world being priced in $US, and excess $$ from sale of these resources being spent on $US treasuries. This allows the US to run huge deficits and spend huge amounts on the military (to try and get countries like Iran to capitulate)

        Reply
        1. Watt4Bob

          You think the Saudi’s will price oil in anything other that $US?

          The recent attacks on Saudi oil infrastructure was a message, that being the ability to produce oil, that props up the house of Saud, is precarious if you can’t get along with the neighbors.

          Right now the neighbors are exploring the possibility of solidarity with China, Russia, and anyone else who wants in, in establishing an alternative to the exclusive use of American dollars in selling oil.

          All the American efforts to sow chaos are intended to forestall that eventuality.

          If anyone is successful in selling oil for something other than dollars, it means pipelines along the New Silk Road, and yes, the Saudi’s will join the alternative market.

          IMO, it’s obvious that the chaos America is now visiting on the ME, far from enforcing our position, is going to drive the region away from us and into the arms, pun intended, of Russia and China.

          And BTW, it’s not yet clear whether the US can convince the EU to turn away from a deal for energy from Russia. It makes a lot of sense to rely on pipelines as opposed to tankers.

          Reply
    3. NotTimothyGeithner

      The 1979 Revolution and 1953 coup are fundamental attacks on American mythology. For conservative types, they can’t cope with the responsibility for 1953 or having American power challenged successfully.

      Like Cuba, Iran is a demonstration American power is limited. Iraq, our favorite whipping boy, had just come off a 10 year war in 1991 and faced a coalition that included the USSR. They were totally isolated and then faced 10 years of sanctions. Libya had disarmed before it was attacked. If Cuba and Iran in 1979 can toss the US, anyone can. My God taxes could be raised on american investors.

      Theocrats, communism, and regulations are red herrings for the US’s vassal-enemy view of the world.

      Reply
  8. Ctesias

    soaring domestic production of oil and natural gas from shale deposits in the United States would free us from foreign sources and lighten our military and security burden abroad.

    It was always a pipe dream that it would change anything in terms of the US “security burden” / foreign policy. It was never much about safeguarding its own access to oil in the middle east. It’s about control of the flow of oil wherever it can be produced in meaningful quantities, as it provides the US with the potential to cut off access to oil by other nations, such as China, in the case of a military conflict or full-blown war.

    Reply
    1. Anarcissie

      Indeed. Oil and gas are among the levers of power, but they’re not the only ones. The US ruling class wants to continue to rule as much as it can, therefore, it will use whatever means it has or can obtain to do that. Mr. Putin said that the United States does not desire partners but vassals. I don’t know what took him so long to figure it out. PNAC calls it ‘full spectrum dominance’. Those states, parties, and communities which are not submissive are going to be in trouble, and Iran is one of them.

      Reply
  9. eg

    Does Iran sell oil in exchange for currencies other than $USD? I was informed by a commenter elsewhere that they offer it for yen, but would like to know more.

    If they do, could this be another source of US animus towards Iran? I am thinking here of implications for reserve currency status and its relation to hegemony.

    Reply
  10. Gavin

    I thought at least 30% of the reason for the focus was that the Blob has always viewed Iran as a puppet state that stepped out of line – and so just to prove the point to themselves, as if they know it’s destined to fail, they will keep regime-changing until the “true” outcome has been achieved. This has to be part of the reason they’re not attempting a credible disinformation campaign.
    Even the Moustache of Understanding can’t possibly actually believe his vast network of cab drivers are more plugged in than the millions who turned out for Soleimani’s funeral.. Don’t believe your lying eyes, of course.

    Reply
    1. JBird4049

      A 2,500+ year old civilization is a puppet state that stepped out of line? This has some of the same arrogance as the whining about the deplorables not being supine enough.

      Reply
  11. Paradan

    Keep in mind that oil is an excellent way to fund public projects, in other words “Socialism!”.

    So the other day I was thinking about Auto-Tune for some reason, and I noticed something seems to have slipped mention. Auto-Tune is a piece of software that adjusts your voice to sound like you are in key. It was originally developed by a couple oil industry geologists for use on survey data. Here’s the thing…
    WTF are surveyors doing with a piece of software that takes the data obtained and then shifts and contains it within a desired envelope? Wall street must love these guys.

    Reply
  12. ronmac

    It seems Iran also had an interest in building a pipeline to Lebanon to export natural gas to Europe. This explains Iran’s support for its allies in Lebanon and Syria which were in direct conflict with the US and Israel.

    Reply
  13. John k

    Something odd in opening statement that Iran heavy sour oil needs 100/b to be economic, yet us is constraining it’s ability to export, pissing off china. With oil at 60/b for years they would be losing 40/b, why not let them go bankrupt exporting the stuff? Seems like a Catch-22.

    Reply
    1. Ignacio

      When oil is heavy you need to pressurize the well in order to extract it and this is energy demanding and costly. Anyway, IMO the economics of oil production depend more on market access rather than oil type. With sanctions the breakeven price for iranian oil climbed from about 50$/barrel in 2014 to nearly 200$/barrel in 2020 according to this page.

      Reply
  14. Synoia

    Control of Oil, or oil revenues, is certainly one motivator.

    A second is control of Iran’s foreign policy. Much election money in the US is invested in politicians to further the US’ control of Iran’s foreign policy. That money, campaign contributions, would certainly get Trump’s attention.

    Or

    It’s about the money.

    Reply
  15. m sam

    It makes sense that the US wants to prevent Iran from having leverage over others, but it arguably makes more sense that by dominating Iran and making it a “client state,” the US thereby gains leverage over the rest of the world. Funny how Venezuela, Iran and Russia are all oil/natural gas exporters, all resist being US client states, and all top the list of “most dangerous regimes.”

    Reply
  16. Dick Swenson

    The history of the US involvement with Iran left out two other issues. First, Iran did a “Cuba” on us when it threw the US out of Iran in 1979. Essentially they simply poked us in the eye with a stick and made us look weak. US governments don’t take kindly to being made to look small. The US didn’t take kindly to Castro throwing us out of Cuba. The US government has boycotted them for 60 years. When Obama “made up,” that was all demented donny needed to once again boycott them.

    The second issue is the role of the US in Afghanistan during the 80s and 90s. We supported various groups without any clear poicy and some of them were severely anti-Iranian.

    Reply
  17. Darius

    I think the Islamic revolution made a great strategic mistake in taking the U.S. embassy hostage. It poisoned relations with the U.S., where, 40 years later, the reactionaries can’t even remember why the mention of Iran sends them into fits of purple-faced rage. Without the hostage crisis, the U.S. still would have a range of issues related to Iran’s challenge to it’s hegemony, but the hostage crisis is like cement boots drowning the relationship in a river of reactionary rage. Since then, the Iranians have been notable for their strategic acumen. But the hostage crisis was an indulgence in emotional gratification that won them nothing and has had infinite blowback for them.

    Reply
  18. Wukchumni

    One aspect of Iran that I find intriguing is the idea that the Iranian Rial is worth nothing, and if they could somehow throw a spanner in the financial works and wreck ether money across the board or selectively, it wouldn’t effect them, being a basketcase of a national currency.

    When the Shah was in power it was 4 Rials to the $, now it’s 42,000!

    Reply
  19. Rudolf

    I find all these comments and the entire focus on fossil fuels—causing so much pain and travail not to mention war—entirely depressing. No mention of the environmental degradation that is leading to world wide ecosystem collapse directly the result of burning carbon fuels. That in order to avoid the worst consequences of catastrophic climate disruption the nations of the world must divest from all fossil fuels; they must stay in the ground. A radical conversion to renewable energy sources needs to take place within 10 years for humanity to have any chance of a decent future.
    Business as usual is simply fatal for mankind.

    Reply
  20. catsick

    I am amazed that nobody has pointed out the elephant in the room being Israel, if Israel wants the US to have a war with Iran then that is what is going to happen ….

    Reply

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