Thursday, October 15, 2015

Russia And Iran Moving To Corner The Mideast Oil Supply While Gearing Up For Major Offensive, ISIS Retreating In Syria

Articles: Russia and Iran Moving to Corner the Mideast Oil Supply

[This article neglected to consider the recent oil/gas discoveries made in the Golan Heights area of Israel - but this narrative would fit within this article as well, in addition to the prophetic implications]

It looks like Vladimir Putin and the ayatollahs are preparing to corner the world’s oil supply – literally.

Last May I wrote on this site that Iran was in the process of surrounding the Saudi/Wahhabi oil reserves, along with those of the other Sunni Gulf petro-states.  I added that, “Iran’s strategy to strangle Saudi/Wahhabi oil production also dovetails with Putin’s interests.  As the ruler of the second largest exporter of oil, he would be delighted to see the Kingdom’s production eliminated or severely curtailed and global prices soar to unseen levels.  No wonder he is so overtly supporting Iran.”

We’ve now seen Putin take a major, menacing step in support of the Iranians by introducing combat forces into Syria.  Many analysts argue that he’s doing this both to protect his own naval base at Tartus and as some sort of favor to the Iranians.  Are those really sufficient inducement for him to spend scarce resources and risk Russian lives, or does he have bigger ambitions in mind?  Given the parlous state of Russia’s economy, thanks in very large part to the recent halving of oil prices, he must relish the opportunity now presented to him, in an axis with Iran, to drive those prices back to prior levels.

The Iranians, for their part, must welcome this opportunity as well, for two huge reasons: first, when sanctions are finally lifted, thanks to their friend in the White House, Iran’s oil production will only aggravate the current global excess oil supply, reducing their cash flow (although they will still repatriate the $150 billion released by the nuclear deal).  They and the Russians must both be desperate to find a way to prevent further oil price declines.  And second, Iran’s mortal sectarian enemies and rivals for leadership of all of Islam are the Saudi/Wahhabi clan, so the prospect of simultaneously hurting them while strengthening themselves must seem tremendously tantalizing.

To achieve this, the Russian-Iranian axis can pursue the encirclement strategy of the Arabian Peninsula that Iran has already been overtly conducting, as I described in May, and is evident by referring to the map below.

With Russian assistance, Iran can save its Syrian puppet and reinforce its defensive enclave in the Allawite homeland in the northwest of its putative boundaries.  Then the combined forces of the axis can turn on ISIS, all the while boasting of doing the world a favor, and reduce its territorial control if not extirpate it entirely.  Of course, the Saudi/Wahhabis will probably do whatever they can to assist their vicious ideological offspring, but it would be hard to bet against the axis.

As the axis pacifies Syria, it can then begin pressure the Saudi/Wahhabis and other Sunni petro-states to curtail their oil production enough both to accommodate the increased Iranian flow and to lift prices back to acceptable levels.  $100 a barrel must sound like a nice target.

The axis’s initial pressure will probably be diplomatic, applied by both principal powers.  However, with Iran’s foothold-by-proxy in Yemen and their influence in the Eastern Province and Bahrain, it could easily foment more general violence against the Saudi/Wahhabis, even within the Kingdom itself.  Iran could likewise twist Bahrain’s arm and thereby rattle the cages of the lesser Sunni petro-states.  Then, by trading a reduction in oil for a reduction in violence, the axis could achieve its objective.
If not, the Iranians could escalate the violence further.  Perhaps ideally from the Iranian perspective, the Saudi/Wahhabis would overreact and provide Iran with an excuse to strike directly at the geographically highly concentrated Arabian oil fields and support facilities. 

Iran might not be willing to risk royal retaliation by attacking on its own, but it could be emboldened with Russian backing by air and sea, and perhaps even a nuclear umbrella.  In that scenario, the proud Arabs would be forced to bow to the will of their ancient Persian foes – particularly since it is obvious that the US under its current president could not be relied upon for support.

An attack on the Kingdom’s fields would cause a severe and lengthy disruption of Mideast oil supply, which would dreadful for the rest of the world – but certainly not the worst-case scenario.  Such a disruption would precipitate another nasty global recession and could severely weaken the US, Europe, and China, all of whose economies are fragile and probably brittle.  Thus the damage inflicted could far outlast the disruption itself.  This could be yet another highly attractive incentive for Putin and his ayatollah allies.

So, Putin and the ayatollahs have powerful motives to corner the world’s oil market and therefore the US and the rest of the world are facing an enormous risk.  The horrible pity of this is that the US could easily demonstrate the futility of the Russian-Iranian axis trying to take the world hostage with Mideast oil, simply by opening up our surface deposits of oil shales in the Rockies.  As I showed in this analysis last March, these resources could make Mideast oil irrelevant.

The US’ surface oil shales are completely different from the deep shales that are accessed through directional drilling and fracking and that grab all the headlines; the deep shales are a mere side show in terms of reserves.  The surface shales hold up to 3 trillion barrels of oil versus about 50 billion barrelsof tight oil accessed by fracking.  The total global proven reserves of oil are 1.6 trillion barrels, and the Canadian tar sands have 1.6 to 2.5 trillion barrels (although they're officially listed at 175 billion barrels, which are incorporated in the global total).  So, the US and Canada together essentially can triple the global supply of oil, and at prices in the $60-75/barrel range.  Meanwhile, Mideast reserves are about 800 billion barrels – half of Canada’s oil sands, perhaps less than a third of the US surface shales.  The world no longer needs the Muslim oil.
Unfortunately, the vast majority of the Rockies surface shales sit on Federal land, and while George W. Bush opened up those lands for development, Obama rescinded that policy.  These reserves now sit almost entirely idle.

Iranian general Qassem Soleimani, the commander of the country’s expeditionary al-Quds Force, visited the Syrian side of the Golan in recent days, The Times of Israel has learned.

Soleimani, a powerful figure thought to be at the forefront of Iranian fighting abroad, is in Syria to oversee a new offensive by Iranian and Assad regime troops meant to help the government retake large swaths of the country’s north.

His visit to the Golan, near the border with Israel, was apparently intended to boost morale of Syrian and Hezbollah forces – the latter loyal to Iran’s regime — after a series of setbacks against the “southern front” of rebel groups in the area.

By Wednesday, Soleimani was in the Latakia province, on the Mediterranean coast north of Lebanon, from which the northern operation is expected to launch, backed by the recent influx of Russian air power.

A regional official and Syrian activists said Wedneday that hundreds of Iranian troops were being deployed in northern and central Syria, dramatically escalating Tehran’s involvement in the civil war as they join allied Hezbollah fighters in an ambitious offensive to wrest key areas from rebels amid Russian airstrikes.

The official, who has deep knowledge of operational details in Syria, said the Iranian Revolutionary Guards — currently numbering around 1,500 — began arriving about two weeks ago, after the Russian airstrikes began, and have accelerated recently. The Iranian-backed group Hezbollah has also sent a fresh wave of fighters to Syria, he told The Associated Press.

Wednesday’s statements were the first confirmation of Iranian fighters taking part in combat operations in Syria.

The main goal is to secure the strategic Hama-Aleppo highway and seize the key rebel-held town of Jisr al-Shughour in Idlib province, which Assad’s forces lost in April to insurgents that included al-Qaida’s Nusra Front.

The loss of Jisr al-Shughour, followed by the fall of the entire province, was a resounding defeat for Assad, opening the way for rebels to threaten his Alawite heartland in the coastal province of Latakia. The official suggested the Syrian army’s alarmingly tenacious position around that time is what persuaded the Russians to join the fray and begin airstrikes two weeks ago.

The Syrian Observatory for Human Rights also reported Wednesday that Iranian troops were arriving and being transported to a military base in the coastal town of Latakia, in the town of Jableh outside the provincial capital.

“Syria will witness big victories in coming days,” said Gen. Mohammad Ali Jafari, chief of Iran’s Revolutionary Guard, speaking Monday at Hamedani’s funeral.

The Quds Force is the de facto overseas operational arm of the of the Iranian Revolutionary Guards Corps, which is loyal to Iranian Supreme Leader Ayatollah Ali Khamenei and is separate from Iran’s national military force.

Russia’s current involvement in Syria certainly seemed to catch Western observers off guard. It was only a few weeks ago that the construction of Russia’s air base in Lakatia was being hinted at by the media. Now we’re witnessing an extensive air campaign against ISIS affiliated forces (or Syrian freedom fighters depending on which propaganda outlet you listen to) as Russia tries to reestablish its military as a formidable player on the global stage.

Make no mistake though, this isn’t the new normal. This conflict is still very fluid, and major developments seem to be emerging every week, the latest of which involves Iran’s ground forces in Syria. It’s no secret that Hezbollah units, guided by Iranian advisers, have been acting as Russia’s boots on the ground. Until recently however, they’ve been keeping a low profile. That’s about to change in a very big way as Iran shifts away from an advisory role, to taking direct action in the conflict with conventional forces.

Thousands of Iranian troops have arrived in Syria in recent days, as forces loyal to President Assad prepare a major assault on rebel-held territory in Aleppo. The Syrian government, bolstered by the new arrivals and two weeks of intense Russian airstrikes on rebel positions, is determined to win back territory around the country’s biggest city, and once its commercial hub.

Speaking to the Reuters news agency, unnamed officials said that troops from Iran, along with Syrian soldiers and fighters from the Lebanese militant group Hezbollah, were preparing an attack on the war-ravaged city.

“The big battle preparations in that area are clear,” said one of the officials. “There is a large mobilisation of the Syrian army… elite Hezbollah fighters, and thousands of Iranians who arrived in stages in recent days.” Some unconfirmed reports suggested that initial exchanges with rebel groups were already under way. Last week, the Syrian army launched another major offensive against rebels in Hama province.

If true, this is a bombshell development in the Syrian War. Not only does it reveal Iran’s commitment to bolstering Assad in spite of their sanction negotiations with the West, it says a lot about Russia’s broad strategy.

Since Russia’s air campaign began, most of their airstrikes appeared to be concentrated against the Al-Qaeda linked group known as al-Nusra, which is also affiliated with the Free Syrian Army. This latest development suggests that Russia and Iran may be preparing to pivot their combined air and ground forces against the city of Aleppo, which while hotly contested by all factions in the country, has traditionally been a FSA stronghold.

So what does this say about Russia’s strategy? It means that they’re focusing on the little guys first. They’re mopping up the small factions that are closest to Assad’s territory, one at a time. This will give Assad some breathing room, and help him reconsolidate his power. Once all those tiny factions are out of the way, Russian, Syrian, and Iranian forces will be able put all of their efforts into a final campaign into the heart of ISIS territory.

So stay tuned. The war against America’s proxy forces in Syria is about to get very interesting.

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