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IPS Writers in the Blogosphere » natural gas https://www.ips.org/blog/ips Turning the World Downside Up Tue, 26 May 2020 22:12:16 +0000 en-US hourly 1 http://wordpress.org/?v=3.5.1 Whatever’s Happening In The Gulf Is Probably About Iran https://www.ips.org/blog/ips/whatevers-happening-in-the-gulf-is-probably-about-iran/ https://www.ips.org/blog/ips/whatevers-happening-in-the-gulf-is-probably-about-iran/#comments Tue, 11 Mar 2014 13:01:02 +0000 Derek Davison http://www.ips.org/blog/ips/whatevers-happening-in-the-gulf-is-probably-about-iran/ by Derek Davison

Saudi Arabia, the United Arab Emirates, and Bahrain all recalled their ambassadors from Qatar last Wednesday, citing Qatar’s support for organizations and individuals that threaten “the security and stability of the Gulf states”:

The statement said they had withdrawn their envoys “to protect their security” because Qatar failed to fulfill vows [...]]]> by Derek Davison

Saudi Arabia, the United Arab Emirates, and Bahrain all recalled their ambassadors from Qatar last Wednesday, citing Qatar’s support for organizations and individuals that threaten “the security and stability of the Gulf states”:

The statement said they had withdrawn their envoys “to protect their security” because Qatar failed to fulfill vows “to refrain from supporting organizations or individuals who threaten the security and stability of the gulf states, through direct security work or through political influence,” and also “to refrain from supporting hostile media.”

This came on the heels of a UAE court sentencing Qatari doctor Mahmoud al-Jaidah to seven years in prison on Monday for the crime of aiding a banned opposition group called al-Islah, which the UAE alleges has operational ties to the Muslim Brotherhood (al-Islah insists that any connection it has with the Brotherhood is purely ideological). As Emile Nakhleh writes, the decision by the three Gulf Cooperation Council (GCC) members to recall their ambassadors from a fourth member state illustrates quite clearly that the first “C” in “GCC” — “cooperation” — means virtually nothing at this point, if it ever did mean anything. This was a coordinated move, led by the Saudis, to punish Qatar for supporting Muslim Brotherhood interests around the Middle East (and also for assuming a more prominent role in pan-Arab politics), but beyond that it reflects the Saudis’ deep and ongoing concern about an Iranian resurgence in the Gulf. From the Saudi perspective the Qataris have been punching above their proper weight, and making nice with the wrong people.

Qatar’s ties to the Muslim Brotherhood are clearly the public justification for this row; it is no mystery why Saudi Arabia followed up last Wednesday’s diplomatic swipe at Qatar with a decision on Friday to declare the Muslim Brotherhood a terrorist organization. The Saudis, while they share certain conservative Islamic principles with the Brotherhood, are more than a bit put off by the group’s opposition to dynastic rule. Despite that feature of the Brotherhood’s ideology, though, the very dynastic Qatari monarchy has been a strong supporter of Brotherhood-allied movements throughout the Middle East and North Africa, in Tunisia, Libya, Egypt (especially), and Syria. Their rationale for doing so has been two-fold: one, they feel that supporting the Brotherhood abroad should insulate them from the Brotherhood at home, and two, Qatar has been predicting that the Brotherhood would be the main beneficiary of the Arab Spring. Had they been right in their prediction, Qatar’s regional influence would have been significantly increased as a result, but by the looks of things, they were wrong. The Brotherhood’s Freedom and Justice Party is now outlawed in Egypt, its Ennahda Party in Tunisia has voluntarily agreed to give up power, and it has lost most of its influence within the Syrian opposition. Last November’s reorganization of Syrian opposition groups from the Qatar-financed Syrian Islamic Liberation Front to the Saudi-backed Islamic Front can be seen as evidence of the Brotherhood’s — and thus Qatar’s — loss of stature.

A related complaint that these countries have with Qatar is with the country’s Al Jazeera television news network (the “hostile media”). Al Jazeera has continued to provide media access to Muslim Brotherhood figures in Egypt even as that organization was outlawed by the interim Egyptian government. Now several Al Jazeera journalists are currently on trial in Egypt for allegedly aiding the Brotherhood. These countries are also angry about the fact that Al Jazeera continues to give airtime to the controversial Brotherhood-affiliated cleric Yusuf al-Qaradawi. Qaradawi is actually wanted for extradition to Egypt over his comments about the coup that removed the Brotherhood from power there, and he just recently lambasted, on Al Jazeera’s airwaves, the UAE, for “fighting everything Islamic.” The reported pressure being placed on Saudi and Emirati journalists working in Qatar to quit their jobs and return home undoubtedly has something to do with the overall irritation with Qatari media.

However, there is another factor at play here: Qatar’s close — too close for Saudi comfort — ties with Iran (the real “organization” that “threatens” Gulf — i.e., Saudi — security), which has to do largely with natural gas. Qatar shares its windfall natural gas reserves with Iran, in what’s known as the North Dome/South Pars Field in the Persian Gulf. The International Energy Agency estimates that it is the largest natural gas field on the planet. Qatar has been extracting gas from its side of the field considerably faster than Iran has been, for a couple of reasons.

North-Dome-MapFor one thing, the North Dome side of the field (the part in Qatari waters) was discovered in the early 1970s, whereas the South Pars side was only discovered about 20 years later, so Qatar had a lot of time to get a head start on developing the field. For another thing, the North Dome field is pretty much the only game left in Qatar, whose Dukhan oil field is clearly on the decline. Qatar has a huge incentive, then, to develop as much of the North Dome as they can as fast as they can in order to fund the numerous development projects that, when all the oil and gas finally run out, will be what keeps Qatar from going back to the days when pearl diving was its biggest industry. There is a potential conflict here, though. Natural gas, like any other gas, tends to flow toward areas of low pressure. So when one end of a gas field is being drained of its gas faster than the other end, some of the gas in the less exploited end may flow to the more exploited end. This is fine when an entire field is controlled by one country, but in this case, one can easily envision a scenario in which, several years from now, the Iranian government is accusing Qatar of siphoning off its gas.

What this means is that Qatar has a strong incentive to maintain friendly relations with Iran, and on this they have considerable disagreement with their Saudi neighbors. To Saudi Arabia, Iran is a potential regional rival and must be countered at every turn; their opposition to easing international sanctions against Iran, for example, is not so much about the threat of an Iranian nuclear weapon as it is about the fear of Iran escaping from the economic cage in which those sanctions have trapped it. The proxy war taking place between Saudi and Iranian interests in Syria is the most obvious example of the rivalry between the two nations, and the Saudi move against Qatar can be seen as another front in that war. Qatar — although it has backed elements of the Syrian opposition — sees things differently than the Saudis where Iran is concerned. In January, Qatari Foreign Minister Khalid bin Mohammad Al-Attiyah publicly called for an “inclusive” approach to Iran, which he argued “has a crucial role” in ending the crisis in Syria. There is enough historic tension between the Qataris and the Saudis for this kind of disagreement over foreign affairs to provide the basis for a wider fracturing of relations. For its part, Bahrain has every reason to go along with a Saudi diplomatic move against a suspected regional ally of Iran; after all, it was Saudi intervention that saved Bahrain’s ruling al-Khalifa family from a Shiʿa-led rebellion in 2011, a rebellion that Bahrain accuses Iran of fomenting.

Look, though, at the two GCC members that did not pull their ambassadors from Qatar: Kuwait, where the Brotherhood’s Hadas Party is out of favor, but whose relations with Iran are “excellent”; and Oman, where Sultan Qaboos has been critical of the Brotherhood, but who is close enough to Iran to have served as a go-between for back-channel US-Iran negotiations. If the issue were really Qatar’s support for the Brotherhood, and not its relationship with Iran, both of these countries may well have joined the others in recalling their ambassadors. The one country for which this explanation does not make sense is the UAE, whose relations with Iran are improving after the two countries recently reached an accord over the disposition of three disputed Gulf islands. In this case, it may really be that Qatar’s support for the Brotherhood, and especially the Jaidah case and Qaradawi’s criticisms, motivated their action.

The Saudi decision to break ties with Qatar is, as Thomas Lippmann notes, another in a line of recent “sulking” diplomatic moves by the oil giant. Qatar’s failed bet on the Muslim Brotherhood made this an opportune time for the Saudis to move against them, but Saudi fears about an Iranian resurgence may well have been the real reason behind their action.

Photo: Iran’s president Hassan Rouhani chats with Oman’s Sultan Qaboos Bin Said during a meeting in Tehran on August 25, 2013. Credit: ISNA/Mona Hoobefekr

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New Congressional Sanctions Push Aimed at Killing Iran Diplomacy https://www.ips.org/blog/ips/new-congressional-sanctions-push-aimed-at-killing-iran-diplomacy/ https://www.ips.org/blog/ips/new-congressional-sanctions-push-aimed-at-killing-iran-diplomacy/#comments Fri, 10 May 2013 18:22:06 +0000 Guest http://www.ips.org/blog/ips/new-congressional-sanctions-push-aimed-at-killing-iran-diplomacy/ via Lobe Log

by Jamal Abdi

The notion that U.S. sanctions on Iran are supposed to act as diplomatic leverage to get a nuclear deal may be dispelled once and for all by a new Congressional action now in the works.

The House is poised to move ahead with a new round of [...]]]> via Lobe Log

by Jamal Abdi

The notion that U.S. sanctions on Iran are supposed to act as diplomatic leverage to get a nuclear deal may be dispelled once and for all by a new Congressional action now in the works.

The House is poised to move ahead with a new round of Iran sanctions, and a slew of new sanctions proposals are set to be introduced in the Senate, even as a host of current and former senior U.S. officials — including Secretary of State John Kerry – have warned the body to hold off on new sanctions at the risk of imperiling a diplomatic resolution to the nuclear standoff.

For some in Congress, this seems to be precisely the point.

 Senator Mark Kirk (R-IL) is circulating a draft measure that would make regime change, not a negotiated solution, the official U.S. policy. Kirk promises to introduce that measure shortly, but first will introduce two smaller sanction measures to cut off Iran’s foreign exchange and block its natural gas deals, all building up to the grand finale. The first was introduced this week, S.892, which is designed to cut off Iranian access to euros. It would sanction any foreign entity that converts currency held by Iran’s Central Bank or other sanctioned Iranian entities into non-local currency. Blocking off Iranian access to euros will of course make it more difficult for Iran to purchase Western medicines and exacerbate the reported sanctions-induced medicine shortage now plaguing Iran.

Sen. Kirk hopes to attach these smaller bills to another sanctions package in the House before formally introducing his regime change bill. That bill will mandate that sanctions be kept in place until Iran transitions to a democratic government — a preposterous notion given the disastrous effect sanctions are having on Iran’s civil society and democracy movement. The bill would echo the Iraq Liberation Act, which was passed and signed by President Clinton in 1998 and cemented regime change as the official policy toward Saddam Hussein. That measure all but guaranteed Saddam would not comply with sanctions — what was the point if they would never be lifted? — and was cited by Congress as the basis for authorizing war with Iraq four years later.

In the meantime, the House is considering H.R.850, a measure that would sanction U.S. allies that conduct commercial transactions with Iran. Despite existing humanitarian waivers, this could affect transactions that include food and medicine as commercial entities and banks are becoming increasingly fearful of conducting any business transaction with Iran for fear of being penalized by the United States. Congress attempted to pass a similar measure last year as part of a previous sanctions package, but removed it at the last minute after intervention by the Obama Administration. A Congressional aide told Congressional Quarterly at the time that the measure “would be impossible to enforce and only make our allies really angry. They would have endangered their cooperation with the sanctions we have now.”

Nevertheless, the House Foreign Affairs Committee is looking to move H.R.850 in a matter of weeks. Next Wednesday, the committee will hold a hearing with Under Secretary of State for Political Affairs Wendy Sherman, the top U.S. negotiator conducting multilateral talks with Iran, and Treasury Under Secretary for Financial Intelligence and Terrorism David Cohen, who is in charge of implementing the Iran sanctions. Committee Chairman Ed Royce  ominously said the hearing was “a chance to press the Administration on critical questions surrounding U.S. participation in the P5+1 negotiations and its implications for the enforcement of sanctions.” The implication being that the U.S. could be implementing more sanctions if pesky diplomacy wasn’t getting in the way. The next step would be to move the sanctions bill.

Regardless of what Sherman and Cohen tell the chamber, it may make no difference. Secretary of State John Kerry implored the Senate Foreign Relations Committee in April to hold off on further sanctions and to not interfere with diplomatic efforts to little effect. Congress has become increasingly bold in dismissing the White House’s requests when it comes to Iran. Congress has also thus far ignored reports from senior former officials like Tom Pickering, Dick Lugar, Ann Marie Slaughter warning that sanctions were outpacing negotiations and threatening to upend the diplomatic process.

The Kirk measure on foreign exchange introduced this week, in fact, circumvents the White House and doesn’t even require the President’s signature. It pronounces that, regardless of when the bill would actually be passed, the sanctions on foreign exchange would go into effect starting May 9. This means the U.S. will retroactively issue sanctions against any bank conducting a transaction after this date, so long as the bill passes at some point. It is essentially sanctions by Congressional decree. The threat of sanctions from the Hill is now so great that they do not even need to be passed to have a chilling effect. It is a stunning display of impunity by Iran hawks in Congress and groups like AIPAC and the Foundation for Defense of Democracies that are supporting these measures.

It’s little wonder, then, that the narrative in Tehran is that even if Iran complies with U.S. demands on its nuclear program, the sanctions will continue and the President can’t do a thing about it. While Kirk’s Iraq Liberation Act for Iran may not yet be introduced, he may not have to get his final bill passed in order to lock in the sanctions as regime change policy.

The dominant narrative in Tehran is already that, much like with Saddam’s Iraq, the sanctions on Iran will never be lifted. The President has no mechanism to formally lift many of the hardest hitting sanctions — he is dependent on Congress. And Congressional hawks have indicated that if Iran compromises, it will be proof the sanctions are working and instead of easing them in a quid pro quo, more sanctions should be passed. Tehran’s narrative is being reinforced by Congress, and unless the U.S. can convey that there is an offramp from sanctions, Iran’s nuclear program will likely continue apace.

– Jamal Abdi is the Policy Director of the National Iranian American Council, the largest grassroots organization representing the Iranian-American community in the US. He previously worked in Congress as a Policy Advisor on foreign affairs issues. Follow Jamal on Twitter: @jabdi

Photo: The Central Bank building in Tehran, Iran.

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Panic in Tehran https://www.ips.org/blog/ips/panic-in-tehran/ https://www.ips.org/blog/ips/panic-in-tehran/#comments Wed, 03 Oct 2012 18:55:28 +0000 Paul Sullivan http://www.ips.org/blog/ips/panic-in-tehran/ via Lobe Log

The Iranian rial has been in free fall for the last few days. Inflation has been ramping up for the last few months as the rial has lost more than 50 percent of its value over the last year. Unemployment is up to maybe 25 percent plus, and quite a [...]]]> via Lobe Log

The Iranian rial has been in free fall for the last few days. Inflation has been ramping up for the last few months as the rial has lost more than 50 percent of its value over the last year. Unemployment is up to maybe 25 percent plus, and quite a bit higher in some of the poorer parts of the country.

Iran’s oil exports have been slammed by sanctions. Even with Iran’s attempts to sneak some out in various ways, such as registering tankers in Mongolia of all places; the sanctions hunters found out about that one fairly quickly and shut it down with some diplomatic moves in Ulan Baator.

Then there is the purchase of 2 million barrels of stranded oil in Sid Krir in Egypt that the Egyptian government wants to purchase. US-Egyptian relations are not exactly the best these days and President Morsi visited Tehran recently. He might have embarrassed his host by mentioning his views on Syria, but he still went. Egypt also looks like it might be working towards improving relations with Iran. Turkey may be buying some oil from Iran with gold or other barter methods. Other states may be setting grain and goods for oil barter arrangements.

The financial system of Iran has been hit hard with the sanctions. The closing down of Iran’s access to the SWIFT system was significant. This may have done more damage to Iran’s ability to do business internationally than many of the other sanctions combined. The sanctions focused on persons and banks are good politics, but have historically not been that effective. Closing the country from a major clearing house is like slamming a large financial door in their faces.

Indeed, Iran is in a tight spot. I would expect runs on banks to follow on to this if the government cannot stem the flow of the psychology of financial contagion that seems to be sweeping the country. The government is clearly in a panic. They are blaming the usual “outside forces” and “22 conspirators” who of course were arrested quite publicly today. Then they blamed the black market money changers in the bazaars of Tehran for the collapse. This last one makes less than no sense. The bazaaris do not exchange enough money to make this sort of a dent in the US dollar-Iranian rial exchange rate. The currency drop has a lot more to do with hyper-expansive monetary policy pushing inflation. There is clearly a sense that there are way too many rials chasing at a faster velocity the goods that are in stock and are flowing into Iran. See this article for some supporting monetary and other data.

The huge rise in the stock market of Tehran is also due to nominal reasons, as we economists would like to say in such circumstances. The money flowing into the economy via the policies of the Central Bank of Iran has pumped up not only the prices of goods, but also stocks. This huge increase in money supply has also pumped up the price of land and housing in Iran. Also driving the stock, land and housing costs is the shortage of alternative investments. Sanctions have taken a bit out of the Iranian economy on that account.

Iran’s economic policies have actually magnified, not countered, the effects of the sanctions. One of the major culprits was expanding the broad money supply by 100 percent in the last 5 years.

This said, what is happening now shows not only the results of sanctions but counterproductive economic policies and more. The current economic status of Iran also shows how the credibility of the regime is weakening.

I am certain that there are many people in Iran who are questioning the worth of the country’s nuclear program and especially the leadership’s global defiance on this issue in light of the growing resulting problems they’re facing.

Developing about 90 percent of the entire nuclear fuel cycle is very expensive. This could have been costing Iran about 10 percent or more of its GDP for many years. That is 10 percent that could have been invested in industries that produce jobs, agriculture, education, and more.

Expansive nuclear infrastructure development is not necessary given the existence of global trade in low enriched uranium for nuclear plants. It is also unnecessary given the small amount of raw uranium that exists in Iran. This is also counter-intuitive given that Iran flares off the equivalent of four nuclear power plants of 1200 MW each of natural gas.

There are many reasons why Iran’s government should focus on its economy and its people, rather than on defiant nuclear brinksmanship.

The Iranian leadership may find that their brinkmanship is about to bring their country to the brink.

 

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