How Tehran fits into Russia-China strategy

Iran continues to sell oil, mostly to China

By Pepe Escobar

"Information Clearing House" -  Complex doesn’t even begin to describe the positioning of Iran-Russia in the geopolitical chessboard. What’s clear in our current, volatile moment is that they’re partners, as I previously reported. Although not strategic partners, as in the Russia-China tie-up, Russia-China-Iran remain the crucial triad in the ongoing, multi-layered, long-term Eurasia integration process.
A few days after our Asia Times report, an article – based on “senior sources close to the Iranian regime” and crammed with fear-mongering, baseless accusations of corruption and outright ignorance about key military issues – claimed that Russia would turn the Iranian ports of Bandar Abbas and Chabahar into forward military bases complete with submarines, Spetsnaz special forces and Su-57 fighter jets, thus applying a “stranglehold” to the Persian Gulf.
For starters, “senior sources close to the Iranian regime” would never reveal such sensitive national-security details, much less to Anglo-American foreign media. In my own case, even though I have made several visits to Iran while consistently reporting on Iran for Asia Times, and even though authorities at myriad levels know where I’m coming from, I have not managed to get answers from Islamic Revolutionary Guard Corps generals to 16 detailed questions I sent nearly a month ago. According to my interlocutors, these are deemed “too sensitive” and, yes, a matter of national security.
Predictably, the report was fully debunked. One of my top Tehran sources, asked about its veracity, was blunt: “Absolutely not.” After all, Iran’s constitution decisively forbids foreign troops stationed on national soil. The Majlis – Iranian parliament – would never approve such a move barring an extreme case, as in the follow-up to a US military attack.

As for Russia-Iran military cooperation, the upcoming joint military exercises in the “northern part of the Indian Ocean,” including the Strait of Hormuz, are a first-ever such occasion, made possible only by a special agreement.
Analyst Gennady Nechaev is closer to reality when he notes that in the event of growing Russia-Iran cooperation, the possibility would be open for “permanent basing of the Russian Navy in one of the Iranian ports with the provision of an airfield nearby – the same type of arrangement as Tartus and Hmeimim on the Mediterranean coast of Syria.”  To get there, though, would be a long and winding road.
And that brings us to Chabahar, which poses an interesting question. Chabahar is a deep sea port, on the Gulf of Oman and the key plank in India’s mini-Silk Road vision. India invested a lot in Chabahar, to have it connected by highway to Afghanistan and Central Asia and in the future by rail to the Caucasus. All that so India may bypass Pakistan as far as trade routes are concerned.
Chabahar, though, may also become an important node of the New Silk Roads, or Belt and Road Initiative. India and China – as well as Russia – are members of the Shanghai Cooperation Organization. Iran, sooner or later, will also become a full SCO member. Only then the possibility “might” – and the emphasis is on “might” – open for the Russian or Chinese navy occasionally to dock at Chabahar, but still not to use it as a forward military base.

Got oil, will travel

On Iran, the Russia-China strategic partnership is working in parallel. China’s priority is energy supplies – and Beijing works the chessboard accordingly. The Chinese ambassador to the United Arab Emirates just issued a trial balloon, mentioning that Beijing might consider escorting oil tankers across the Persian Gulf and the Strait of Hormuz. That could happen independently or – the dangling carrot – as part of Washington’s Operation Sentinel, which for the moment has managed to find only one “coalition of the willing” member: the UK.
What’s actually happening right now in the Persian Gulf is way more entertaining. As I confirmed with energy traders in Doha late last month, demand for oil right now is higher than in 2018. And in consequence Iran continues to sell most of its oil.
A tanker leaves Iran with transponder off; the oil is transferred to another tanker on the high seas; and then it is relabeled. According to a trader, “If you take two to three million barrels a day off the market by sanctions on Venezuela and Iran, plus the OPEC cutbacks, you would have to see a higher price.”
There is no higher price. Brent crude remains near a seven-month low, around US$60 a barrel. This means that Iran continues to sell, mostly to China. That trial balloon floated in the UAE might well be China camouflaging its continued purchase of Iranian oil.
Iranian Foreign Minister Javad Zarif has been proving again and again his diplomatic mastery, running rings around the Donald Trump administration. But all major decisions in Iran come from Supreme Leader Ayatollah Khamenei. That also applies to Tehran’s position in relation to multi-level forms of support from the Russia-China strategic partnership.

What the past few months have made crystal clear is how Russia-China’s magnetic pull is attracting key Eurasia players Iran, Turkey and Pakistan. And make no mistake: As much as Tehran may be extremely proud of its political independence, it is reassuring to know that Iran is, and will continue to be, a definitive red line for Russia-China.

Putin and Xi step up the strategic game

The recent summit in Moscow and St. Petersburg between the presidents of China and Russia is proof of the emerging alliance between the two neighouring big powers, which are definitely a counterbalance to the US and its illegal hegemony around the world.

Stay with us for an article in this regard by investigative Brazilian journalist, Pepe Escobar for Asia Times, titled: “Putin and Xi step up the strategic game”.

Russian and Chinese leaders have met almost 30 times since 2013 and have become tight strategic partners

A single image epitomizes the hurricane at the center of the current geopolitical chessboard: an extremely affectionate handshake between Xi Jinping and Vladimir Putin.

The image crystallizes the stuff of nightmares by those in the US that still follow the Eurasian prophecies of Halford Mackinder and his disciples, such as the late Zbigniew “Grand Chessboard” Brzezinski, that focused on the imperative of preventing the emergence of a peer competitor in Eurasia.

The peer competitor has emerged, in full: the Russia-China strategic partnership.

Recently, Xi said at the Kremlin this was his eighth trip to Russia since 2013 – when the New Silk Roads, or Belt and Road Initiative (BRI), were announced. And he added he and Putin had met “almost 30 times” since then.

Among a raft of agreements signed by Putin and Xi, one stands out: the drive to develop bilateral trade and cross-border payments using the ruble and the yuan, bypassing the US dollar. Or, as Putin diplomatically put it, “Russia and China intend to develop the practice of “settlements in national currencies.”

It’s crucial to remember this has been discussed in depth at the BRICS level – and specifically by the Russia-China strategic partnership – since the mid-2000s.

Vast swathes of the Global South are paying attention. Trade balance settlement everywhere is bound to progressively embrace the use of other currencies, not only ruble and yuan.

After their bilateral meeting, Xi warned that “currently, the international situation is experiencing unprecedented, over the centuries, profound changes. Peace and development remain the trends of the time, but raise-your-head protectionism, unilateralism, increasing power politics and hegemonism.”

That’s an understatement. Russia is under harsh US sanctions. China is facing an all-out trade war. The Russia-China strategic partnership is the bête noire of the US National Security Strategy.

Geopolitically, Russia-China is in total sync. On Syria, and the necessity of preventing the so-called “moderate rebel” terrorists from migrating to Xinjiang, Central Asia and the Caucasus. On the necessity of preserving the JCPOA (Joint Comprehensive Plan Of Action), or the Iran nuclear deal. On the necessity of solving the Korean peninsula riddle. On the necessity of supporting Venezuela – with military cooperation and humanitarian aid.

Crucially, they’re in sync on Putin’s total support for BRI, as well as the drive to merge BRI and Eurasia Economic Union (EAEU) projects. It’s this interconnection that may solidify Moscow’s aim of configuring Russia as the key Eurasian land bridge.

It’s fitting that Putin and Xi, apart from clinching deals, had so much to discuss in Moscow.

And all this happened before Putin and Xi met top executives of over 50 Russian and 60 Chinese companies attending the second Russian-Chinese Energy Forum, organized by Rosneft and China National Petroleum Corp. And before Putin’s much-awaited speech on the current turbulent geopolitical chessboard, side by side with Xi, at the plenary session of the St Petersburg International Economic Forum (SPIEF).

SPIEF is Russia’s top annual business forum. It’s absolutely impossible to understand the nuts and bolts of the complex machinery of progressive Eurasia integration without attending or following SPIEF’s debates and discussions.

2019 is, in so many aspects, The Year of Living Dangerously. The chessboard is totally monopolized by the clash between the US and Russia-China – with the added twist of the Trump administration flirting with a “reverse Nixon” strategy to split Russia from China. So, it’s fitting for Xi to be a guest of honor at SPIEF. And that is only the first of three crucial Xi-Putin meetings this month.

Next week, they meet again in Bishkek for the annual Shanghai Cooperation Organization summit – where topics they discussed in Moscow and St Petersburg will be shared with Central-South Asian nations, including crucial SCO observer Iran.

Arguably the key issue in Bishkek will be how Putin and Xi handle fellow BRICS member India’s Modi, fresh from an electoral victory, and dreaming of a starring role in Washington’s Indo-Pacific strategy – which is essentially yet another “containment of China” mechanism.

And they meet again in Osaka – along with the other BRICS members – on June 28 for the G20 summit.

The St Petersburg meeting this year staged some absolutely essential discussions revolving around Eurasian integration. Most of these issues are simply ignored across the West. Here are just a few examples, which deserve to be closely examined.

• The transportation challenges facing SCO member nations, in a panel featuring SCO secretary-general Vladimir Norov, and an excellent intervention by KPMG’s global head of infrastructure Richard Threlfall;

• An energy panel featuring Rosneft’s CEO Igor Sechin, Qatar’s Finance Minister Ali Shareef al-Emadi, BP’s group chief executive Robert Dudley and president of ExxonMobil global projects Neil Duffin;

• A discussion on the current paradigm shift in the global economic order, featuring Russia’s Deputy Minister of Economic Development Timur Maksimov, the head of Emerging Markets Economics and Strategy at Bank of America Merrill Lynch David Hauner, and the extremely articulated Paul Chan, Hong Kong’s financial secretary;

• A wide-ranging panel on business/investment across Eurasia, featuring the president of the EAEU’s business council, Viktor Khristenko, the chairman of the management board of the Eurasian Development Bank, Andrey Belyaninov, Russia’s first Deputy Prime Minister Anton Siluanov, and Sberbank’s head of analytical directorate Yaroslav Lissovolik;

• What’s evolving business-wise around the Russia-China strategic partnership, leading to joint large-scale projects in infrastructure, energy and high-technology, featuring CEOs and directors of top Russian and Chinese companies.  

The Putin-Xi meetings, the discussions at St Petersburg, and the SCO summit next week, in less than 10 days, fully articulate the road map ahead for Eurasian integration. Over it all hangs the ultimate (economic) paradigm shift: multiple nations getting ready to bypass the US dollar as the world’s reserve currency.

Iran Hawks in Washington

by Peter Koenig

 

No doubt, anti-Iran propaganda out of Washington abounds. There are numerous Zionist-run think-tanks (sic) that make US Foreign Policy – and are ratcheting up anti-Iran anger in the US, but targeting especially the Iranian population at home, in Iran. The notorious chief-villain of these agencies, by the way, highly subsidized by the US State Department, and perhaps even more important, by the powerful US military-security complex, is the Foundation for the Defense of Democracy (FDD). More than fifty years ago, then President Dwight Eisenhower already warned the world about the invasive, abusive and greed-driven powers of this ever-growing war industry.

Nobody really heeded his advice, least the United States with her world hegemonic aspirations. Today we have to live with it – and recognize the dangers emanating from this war complex, that controls more than 50% of the US GDP – all associated industries and services included. If peace was to break out tomorrow – the US economy would collapse. It is, therefore, the new normal that aggressions are flying out from Washington to all those proud countries that refuse to submit themselves to the dictate of the hegemon – like Iran, Venezuela, North Korea, Syria, Russia, China, Pakistan, Cuba —- and many more. The assaults on free and independent thinking nations come in the form of verbal insults, economic sanctions, tariffs, broken international and bilateral agreements – and foremost war threats and provocations. Beware from falling into the trap.

Iran is not alone. It means – moving on and living with this western imposed system – or else…

And else, means getting out of it. Unfortunately, it does little good accusing the devil overseas, like the FDD, NED (National Endowment for Democracy) and whatever else they are called. They will not go away; they just enjoy the anger they generate. And yes, there is a clear and present danger that through Netanyahu and Trump war provocations on Iran are being launched. And yes, as long as Iran is still linked to the western monetary system, and tries hard to stay linked to it, more sanctions will follow, disastrous sanctions – but disastrous only as long as Iran is tied to the western dollar-based economy. If you, Iran, move away from this massive western monetary fraud – and this will not happen over-night – you, Iran, will gradually regain your economic autonomy and political sovereignty. This is crucial.

Fighting and arguing against senseless and totally illegal sanctions and aggressions – or even begging the west to stick to the Nuclear Deal, against Washington’s reneging on the Nuclear Deal, is a waste of time. It will achieve nothing. They, the US of A, will not give in. The Israel and war industrial complex lobbies are too strong. Counting on Europe to stick to the “Deal” is not a good strategy. Even if – for their own selfish interests – the Europeans would want to maintain the 5+1 Joint Comprehensive Plan of Action (JCPOA), first, you never know whether and when they may cave in to Washington and Israel’s pressure, and second, even if they don’t, you are still linked to the western ponzy-economy through the euro and, thus vulnerable for sanctions.

Most important, however, rather than looking outside for a culprit – i.e. in Washington or Brussels, find the solution from within. There are two major obstacles to keep in mind. The first one Iran is in the process of overcoming, it’s called embarking on an “Economy of Resistance”; the second one is more complicated but not impossible – neutralizing the Fifth Column in Iran.

Economy of Resistance – is a path to self-sufficiency, economic autonomy and political sovereignty. Iran, under the guidance of the Ayatollah, has already embarked on this de-globalizing route. President Putin said already several years ago, the sanctions were the best thing that happened to Russia after the collapse of the Soviet Union. It forced Russia to rehabilitate an rebuild her agricultural sector and modernize her industrial park. Today Russia is by far the largest wheat exporter in the world and has a cutting-edge industrial arsenal. This message, Mr. Putin, transmitted during his visit to Tehran last November face-to-face to the Ayatollah.

Following the principles of a Resistance Economy implies a gradual, but eventually radical separation from the western monetary system – and adherence to the eastern alliances, like the SCO – Shanghai Cooperation Organization, the BRICS and the Eurasia Economic Union (EEU). Iran is poised to become a member of the SCO within short. These alliances are no longer trading in UDS dollars, have their own international transfer systems – separated from the western, privately run SWIFT which is totally controlled by the US banking moguls – and therefore, SWIFT is a prime instrument to impose financial and economic sanctions, by withholding or blocking international payment transfers and blocking or confiscating assets abroad.

These eastern alliances are trading in their local currencies and in the case of China and hydrocarbons, even in gold-convertible yuans. One or several new eastern monetary systems are under consideration, including by the BRICS. An important part of the eastern alliances is President Xi’s Belt and Road Initiative (BRI) – or the new Silk Road, a massive multi-trillion yuan infrastructure and transport investments plan – spanning the world from east to west with several connecting “roads”, including maritime routes. This BRI plan, recently incorporated in China’s constitution – is the vanguard for a new economic system, based on equality and benefitting all partners – a clear departure from the western “carrot and stick” approach, i.e. ‘do as I say – or else’ – sanctions will follow.

Second, and this is the real challenge – countries like Iran, Venezuela, Russia, China – and all those nations that resist the west’s attempts to conquer, command and subdue them – have a strong so-called “Fifth Column”, open and covert infiltrated western or local and western-trained and funded ‘assets’. These people are usually embedded in the financial sector, especially the central banks and in trade related activities. They are the ‘recipients’ of the messages from the Hawks from Washington – they propagate them in Iran, bring people to the streets often by paying them – to make believe that there is a strong opposition to the government.

They control the local media, publish false economic information – unemployment, inflation – and seek tightening investment links with the west. The Fifth Columnists, or Atlantists, are helping manipulating currency exchange rates, devaluations of their country’s – Iran’s – money; they are exaggerating the impact of sanctions at home to create fear and hostility against the government – in brief, they are weaponizing public opinion against their own government. They are collaborators with Iran’s enemies.

The Fifth Columnists are a dangerous, criminal and non-transparent alliance of opponents working for foreign interests, in Iran, as well as in Russia, Venezuela, China – and where ever the Washington hegemon and its dark deep masters want to bring about regime change. Neutralizing them is a huge challenge, as their activities are deeply rooted in their countries financial system, private banking and international trade.

The best way of annihilating their nefarious impact is by applying the rules of Resistance Economy – breaking loose from the western dollar system, de-globalizing the economy, finding back to political and economic sovereignty – local production for local markets with local money and local public banking for the development of the local economy; and by trading with friendly, culturally and ideologically aligned countries. If the link to the globalized west is broken, their power is gone. Iran is on the right path – the future is in the East. The greed-driven aggressive west is committing economic and moral suicide – the west has become a sinking ship.

Peter Koenig is an economist and geopolitical analyst. He is also a water resources and environmental specialist. He worked for over 30 years with the World Bank and the World Health Organization around the world in the fields of environment and water. He lectures at universities in the US, Europe and South America. He writes regularly for Global Research; ICH; RT; Sputnik; PressTV; The 21st Century; TeleSUR; The Vineyard of The Saker Blog, the New Eastern Outlook (NEO); and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe. He is also a co-author of The World Order and Revolution! – Essays from the Resistance.