12.04.2015 Author: F. William Engdahl

Iran and a Possible New Energy Geopolitics

4534534534The recent tentative agreement between Iran and the USA regarding Iran’s nuclear program open the prospect of a lifting of almost 36 years of American economic sanctions against Iran. It is being greeted by threats of unilateral military strikes by Israel against Iran to “pre-empt” Iran developing a nuclear bomb. An alliance improbable as it may seem between the ultra-conservative Saudi monarchy and the government of Israel is emerging against Iran and the US deal. The real question is what the deeper motive of the Obama Administration is regarding Iran. Here energy geopolitics plays the lead role, as so often in the energy-rich Middle East. And Russia is the target.

I recently had a dialogue with Shervin, an Iranian energy expert I met two years ago in Tehran regarding these developments. I want to share some of the highlights of that discussion here. He is an energy specialist with Iran’s leading international news agency, Tasnim News Agency. The talk provides a useful insight into the thinking of Iranian intellectuals regarding US sanctions, Iran’s possible role in the world and in energy geopolitics.

Tasnim: What is your opinion about Iran’s sanctions?

WE: The US sanctions on Iran are illegal under the precepts of international law and an act of war, just as are the sanctions on Syria and now on Russia.

Tasnim: Has the Iran negotiations reached a final agreement that will see the West’s economic sanctions against Iran cancelled?

WE: We must be specific. The sanctions come from Washington and the US Treasury financial warfare unit, especially the latest round of sanctions against using the SWIFT interbank clearing system to sell Iranian oil, an unprecedented step by Washington that is now being threatened against Russia. The EU would love to reopen trade with Iran. So long as Washington is controlled by the banks of Wall Street and the military-industrial complex you can expect some excuse, even with a nuclear agreement, to continue the sanctions in some form. Look at Cuba.

Tasnim: How do the current low oil prices affect the economy in America?

WE: The US Secretary of State John Kerry met the Saudi King in Saudi Arabia last September and proposed the collapse of oil prices to put extreme pressure on Iran and primarily on Putin’s Russia whom they are determined to destroy as the only military great power that could threaten the Pentagon’s total military hegemony. If Russia capitulates, which I am convinced it will not, the current world will collapse, Iran will be isolated and destroyed, China as well and the entire alternative multi-polar new structures opposed to the increasingly naked totalitarianism of the Anglo-American hegemonists will suffer a devastating setback.

Ironically, the Saudi oil shock since last year is having a devastating impact on the huge new shale oil industry in North Dakota, Texas, California and such. I estimate if it goes another three to six months, we will begin to see a snowball series of oil company bankruptcies and default on more than $1 trillion in oil company loans or “junk” bonds. So far the shale oil companies have been flooding the market with their oil to get cash to avoid bank loan default in hopes the crisis will soon end. The Big Oil boys like ExxonMobil, Chevron, BP, Shell can ride the storm as they are well capitalized and global. In terms of the larger US economy, virtually the only bright spot in terms of jobs growth has been hundreds of thousands of new jobs in the domestic shale industry. Those are now vanishing rapidly. The Obama Administration once again failed to see the larger consequences of their actions. They have shot themselves in both feet in the oil war against Putin.

Tasnim: How do the economic sanctions against Iran also impact the US economy?

WE: The US Treasury sanctions on Iran have virtually no impact on the US economy, which makes them so diabolical.

Tasnim: Are economic sanctions against Iran more beneficial to America or Iran?

WE: Actually, and I saw this when I was in Tehran two years ago, it benefits Iran far more. This is because it forces you to be more self-reliant and not let your economy, your industries, your agriculture be destroyed by cheap Western imports like so many countries in Asia, Africa, South America have done. It forces Iran to develop the wonderful capacities internally, to control her own credit, not become a vassal of a dollar system that is going bankrupt. Iranians are very educated and very intelligent people, very resourceful. I think you will do quite well without importing iPhone6 or Monsanto GMO toxic soybeans.

Tasnim: Did Washington get the Saudis to drive down the price in order to hurt Russia and perhaps Iran?

WE: Yes, of course. It was a repeat of what George Schultz and Vice President Bush Sr. did back in 1986 to get the Saudis at that time to flood the market and drive prices below $10 a barrel, in order to bankrupt the Soviet Union during their Afghan war against the US-backed Mujahideen of Osama bin Laden.

But the policy people at the State Department and CIA in Washington were rather stupid this time. They did not calculate that the Saudis had their own agenda with cheap oil, namely to destroy the growing competition from the US shale oil. Now it’s too late for Obama and Washington to easily reverse oil prices. The intellectual quality of the people today in Washington’s bureaucracy, even compared to those some three decades ago, is so poor, in terms of understanding history, culture, economics, strategy. Note that some of the nastiest persons in the US foreign policy establishment like Brzezinski and Kissinger are urging Obama to not provoke a war with Russia. They at least have some grasp of history. Neo-conservatives like Victoria Nuland at State Department or Defense Secretary Ashton Carter or Hillary Clinton who has her cold eye on the White House, lack the depth in addition to being bad people. Therefore they are so dangerous to their nation as well as the world.

Tasnim: Did the Saudis see in Washington’s request the opportunity to drive the US fracking industry out of business, thus preserving its US market?

WE: It’s not about the Saudi US market. Saudi exports mainly to Asia today and rather little, about 800,000 barrels a day, to the US of a daily US oil consumption of around 19 million barrels a day, around 4%. It’s the global market the Saudis are concerned with dominating via leverage of Arab OPEC—Saudi, Kuwait, Emirates.

Without Iran for the Saudis of course, but that Sunni-Shi’ite conflict, especially since Washington deliberately started the Arab Spring Color Revolutions in late 2010, was intended to create total dis-order between once-cooperating OPEC members in the Middle East in order to establish direct US military control over the entire region. The OPEC countries and their Sovereign Wealth Funds, using their huge oil revenues, were beginning to establish networks of Islamic banking independent from Western usury and debt slavery—Tunisia, Libya, Egypt…Had that continued, the dollar would become a worthless banana republic currency in a few years, much like the threat Washington sees today from the BRICS and the Asian Infrastructure Investment Bank.

It is useful to keep in mind, there are two pillars of Washington hegemony: Control of money via Wall Street and the Dollar as world reserve currency; and control of the military power. The money control began collapsing with the foolish deregulation of the banks under Alan Greenspan’s time at the Federal Reserve and the resulting orgy of speculation called the Asset Backed Securitization that led to the inevitable 2007-2008 financial crisis. After that, the military “solution” has become more dominant as the financial pillar was too weak to continue the push for global domination or as Bush and David Rockefeller have called it, their New World Order.

It might help to know that today these American Oligarchs, as I call them, are becoming terrified as never since at least one hundred years that they can lose everything. They are desperate. Washington today is riddled with confused people fighting each other and the world. It is a bit like the last years of the Roman Empire of the Fourth Century AD. It reminds of the ancient Greek saying, “Whom the gods would destroy they first make mad.” Today Washington is home of the Lost Hegemon and some very mad people as in Israel under that gangster, Binjamin Netanyahu.

Tasnim: Is the reduction of price oil for Iran a threat or an opportunity?

WE: An opportunity, a wonderful one, to take a lead in a new just international trading system, one pricing oil not in dollars. As long as the world trades its oil in dollars, you support the Dollar Empire and destroy yourselves. Here China, Russia and others are playing a crucial role pricing in local currencies, thus de-dollarizing their economies. Today the only thing propping up the debt-bloated US Dollar System are oil sales in dollars, narcotics traffic worldwide in dollars and the US military worldwide as the global cops. That’s a pretty fragile system in my view.

Tasnim: What suggestions do you have for economic authorities?

WE: Iran is a wonderful land with beautiful, warm-hearted people and enormous intelligence and economic resources. Were I Iranian head of state I would direct my government to create planning processes across Iran in every region if it does not already exist, to engage local citizens in dialogue with the regional economic officials to define priority economic goals of each region for the next 5 year period (anything longer becomes too rigid). Much like Charles deGaulle, who was certainly no communist, did with his and Jacques Rueff’s “Planification.”

Then the central government ministers meet and review the wants and needs of the people across Iran and draft realizable priorities. I would ban all Western vaccines, all. A healthy diet and loving family and community are the only way to a healthy immune system. I would ban GMO and the chemical weed killers like Monsanto Roundup from ever coming in, even indirectly via soybeans from USA or Argentina or GMO corn. China is just now realizing its error in allowing 60% of her soybeans to be imported and all are GMO. I would develop Iran’s wonderful food culture naturally, with natural chemical-free methods, subsidize that with a positive tax policy and punish industrial US-style agribusiness with punitive taxes.

Today the oligarchs of the West have a simple agenda: genocide against all darker-skinned non-Anglo Saxon blood lines. I have met many of them over the years at conferences in Davos, Frankfurt, many places. They are bloody racists, eugenicists, people like Gates with his vaccines that kill small babies or make young girls unable to have children.

Bill Gates, George Soros, David Rockefeller, Warren Buffett, the DuPonts, the Russell family of Yale University, and others whose names are not so known. They are all fundamentally stupid and ridiculous people who are incapable of seeing the consequences of every life they take to the entirety of the human species. For them to kill the “useless eaters” like ourselves, they make wars, spread disease, make more and more of our children sick and crippled via their poison vaccines, destroy healthy non-chemical traditional medicine like exists still in parts of China or Iran or Russia in favor of the drugs and toxins of Western Drug companies who, by the way, control WHO. They create terrorist organizations to spread their wars of destruction such as Al Qaeda in Libya, Iraq, Yemen, and across the Arab world, Fethullah Gülen’s Cemaat in Turkey and beyond, ISIS which was a creation of US and Israeli intelligence to destroy Bashar al-Assad and the Syrian ties to Iran and Iraq.

Washington now wants to seduce Iran into turning her back on previous ally, Russia and undercutting Russian gas exports to Turkey and the EU. In my view Iran’s future lies not in becoming a new ally of the present Washington neo conservatives to get a few economic cookies from the West if they abandon their natural alliance with Eurasia, especially with Russia, China and the countries of the Shanghai Cooperation Organization.

Iran’s proven natural gas reserves are estimated by BP to be some 34 trillion cubic meters, while Russia’s are at 33 trillion cubic meters. Cooperation now between those two natural gas superpowers is essential in order to build the architecture of Eurasia in a way beneficial to all, including to Germany and the rest of the EU. This is a golden opportunity to change the locus of global energy geopolitics away from the Washington-London-Riyadh axis powers who have controlled it since the initial agreement between US President Roosevelt and Saudi King Ibn Saud in 1943 giving American Rockefeller oil majors exclusive control of the vast oil riches of Saudi Arabia.

F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook”.

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