FP: Saudi Arabia wants to get even and bets on Putin

 Saudi Arabia wants to get even with insulting Biden and bets on Putin

Saudi Arabia wants to get even with US President Joe Biden for his unfriendly attitude towards the country. It makes a choice in favor of Russian leader Vladimir Putin, writes the American magazine Foreign Policy.The author of the article, Anchal Vohra, drew attention to the fact that Riyadh is in no hurry to meet the requests of Washington and London to increase oil production, citing obligations under OPEC+ .

The kingdom’s de facto ruler, Crown Prince of Saudi Arabia Mohammed bin Salman Al Saud sees an opportunity to get even with US President Joe Biden for what he sees as unwarranted insults and unfriendly attitude.

In particular the crown prince is unhappy with the fact that during the election campaign Biden called Saudi Arabia a “rogue”. And as president, he released a report that refers to the involvement of Mohammed bin Salman Al Saud in the murder of journalist Jamal Khashoggi. In addition, the Saudis believe that the White House is ignoring their concerns about the possible restoration of the Iranian nuclear deal, and also refuses to take action against the Houthis for attacks on their ships and cities.

“The Saudi Crown Prince has bet on Putin. He not only believes, but also hopes that the Republicans will win the midterm elections, and Biden will turn into a lame duck. By 2025, Mohammed bin Salman surely believes, Biden and the Democrats will lose power, and Putin will remain the president of Russia,” Treta Parsi, a professor at Georgetown University, told FP.

Eh, western “values”

Columnist Vohra concluded that in order to cooperate with Saudi Arabia to lower oil prices, the West may have to sacrifice its values. The problem is, in my opinion, that the West has no values. Just interests. That is why their allies can suddently turn into their enemies and the other way around. If their interests change then any of their allies will be sacrificed without any mercy.

“The Saudis have too much leverage to be taken into account in geopolitics and not put up with constant criticism for human rights violations,”

Biden, seizing the opportunity, should fundamentally rethink American relations with the Saudi monarchy, stop all arms sales and cancel contracts for the repair and maintenance of military equipment of this country.

The author is suggesting introducing tough sanctions against Saudi Arabia. Just like that. The country that served American interests in the Middle East is about to be declared an enemy. The country that supported the American military-industrial complex with tens of billions of dollars is about to be refused to maintain that equipment. Despite all contract having the maintenance of the equipment included.

After the “Arab Spring” Saudi Arabia began to strengthen relations with both Russia and China . The United States continued to provide support to the state, especially in the field of security. Because of this, according to FP, the Saudis had a feeling that the US needed the partnership more than they did.

FP notes that further strengthening of ties between Russia and Saudi Arabia will be a great loss for the US.

Negotiations about using Yuan for oil payments with China are happening in the background.

UAE’s China Jets Purchase Shows US Relations in ‘Crisis’

China has stepped in to supply the emirate with combat aircraft after a $23bn deal with the US fell through over a row about tech espionage protections

When Iranian-made Houthi missiles and drones hit the international airport in Abu Dhabi in January. It proved to be a wake-up call.

The United Arab Emirates, a federation that prides itself on being safe and business-friendly, was suddenly vulnerable to outside attacks.

It likely contributed to the UAE’s decision to sign a contract with China National Aero-Technology Import & Export Corporation (CATIC) to buy 12 L-15 training and light combat aircraft. With the option for 36 additional jets.

The news was a dramatic boost for the Chinese arms industry. It may help it snare more business in the Middle East.

It is another blow for the US. The deal came hard on the heels of the collapse of the UAE’s plan to spend up to US$23.37 billion on 50 American F-35As, up to 18 MQ-9Bs, and advanced munitions.

The UAE government informed Washington by letter in December that it planned to abandon the deal, according to a December report in the Wall Street Journal.

The L-15 announcement reflects “a confidence crisis, and the US should review its calculations and mend the relations with the UAE,” Fahd Al Halabieh, a Dubai-based defence analyst told Breaking Defense.

He attributed this crisis to a series of recent political spats over many issues related to Iran, the war in Yemen and ties with China.

The UAE also ordered 80 fourth-generation multi-role Rafale fighter jets from France last year in a deal worth US$16 billion.

The UAE’s latest move is another signal that all is not well in the military relationship with the US. It is the China factor that’s the focus of concern.

US ‘Espionage’ Safeguards

The F-35 deal fell through due to concerns over stringent safeguards required by the US to protect against Chinese espionage.

The Emirati government considers security requirements demanded by the US, intended to keep sensitive military technology from Chinese hands, as unacceptable.

The value of the L-15 aircraft deal — which further advances strategic ties between the oil-rich Sheikhdom and Beijing — was not disclosed.

The wealthy Gulf country is part of the Saudi-led coalition that has been fighting the Iranian-backed Houthi militias in Yemen since 2015.

China’s L-15 advanced jet trainer made its debut at the Dubai Airshow in 2021.

The Hongdu L-15 is a two-seat, twin-engine supersonic platform built to address the demand for training pilots. It has been dubbed a “star model” by Chinese media.

L-15’s Ground Strike Capability

Developed by Hongdu Aviation Industry Group (HAIG), the L-15 designation applies to the export variant of the jet trainer. The domestic version is called JL-10.

The new design provides increased pilot safety while cutting training expenses when compared to competitors.

The aircraft has two AI-222K-25F afterburner turbofan engines. Each having a single afterburner thrust of 4200 kg, a full authority digital engine control module, and a 3,000 flight hour service life, EurAsian Times reported.

Additionally, the L-15 trainer is capable of air combat and ground strikes.

With a payload of 3,000 kg, the L-15 training aircraft has six weapon attachment points. It can also carry air-to-air missiles, air-to-surface missiles and precision-guided bombs.

With characteristics of a third-generation fighter aircraft, it has adopted the aerodynamic profile of large strakes, the structure of a blended wing body, and an advanced fly-by-wire flight control system, CGTN reported.

The L-15 attracted interest from the UAE mainly because of its technical performance. Chinese aircraft is an advanced trainer jet that is second to none in the world, Wang Ya’nan, chief editor of Aerospace Knowledge magazine, told the Global Times.

Russia opens doors for Iran’s Eurasian integration

The January meeting between Raisi and Putin may have seemed disappointing, but now Russia is opening the door for Iran’s Eurasian integration.

On January 20, Iranian President Ibrahim Raisi traveled to Moscow to meet his Russian counterpart Vladimir Putin. The purpose of developing bilateral relations between the two countries at the highest level.

Among the topics for discussion by the two leaders were their common regional and international issues. As well as the Vienna talks on Iran’s nuclear program, and regional cooperation in Eurasia.

Contrary to expectations and positive statements made before the meeting, the visit did not end with the announcement of a grand strategic agreement. Unlike the one between China and Iran a year ago.

However, the visit brought the negotiations between the two sides to a higher level and promoted Iran’s economic integration into the Russian-Chinese Eurasian architecture.

Big hopes, not grandiose announcements

In recent years, both improving relations between Tehran and Moscow and focusing on strategic partnership have become particularly important tasks for Iran.

Additionaly to working to build up trade and economic ties, which is a priority for Iran, which is under sanctions, an additional impetus may be given to the development of military-political cooperation in the future.

October 2021 – Interfax, citing Iranian Foreign Minister Hossein Amir Abdollahian, announced that Tehran was ready to establish a strategic partnership with Moscow and that both sides were expected to sign documents on an agreement in the coming months.

According to the agencyTASS , both sides were close to completing work on a document on comprehensive cooperation for a period of 20 years.

Timing is important for both countries. Mojtaba Zulnur, chairman of Iran’s parliamentary committee on national security and foreign policy, told Mehr news agency that in order to overcome US sanctions, Iran seeks to conclude a partnership agreement with Russia. Similar to the agreement between Tehran and Beijing.

However, contrary to expectations and some statements made prior to the Iranian leader’s trip to Russia, the visit of President Raisi, at least for the moment,did not lead to a major breakthrough on this front. This process may take some time and may, at least for Moscow, be related to the outcome of negotiations on Iran’s nuclear program.

However, two recent events involving Russia and Iran have had significant resonance. First, the joint Russian-Chinese-Iranian naval exercises in the Indian Ocean. Second, Iran’s relationship with the Eurasian Economic Union (EAEU) along with the implementation of the North-South International Transport Corridor (ITC).

Will Iran join the EAEU in the near future?

Iranian political analyst and former editor-in-chief of the Fars news agency Mostafa Khoscheshm instead says that Russia appears to be pushing for Iran to join the EEU. “Negotiations,” he says, “are already underway . “

In 2019, the Preferential Trade Agreement (PTA), signed between Iran and the EAEU in 2018, came into force.

The agreement provided for lower tariffs on 862 types of goods. 502 of them were Iranian exports to the EAEU. As a result, trade increased by more than 84 percent between October 2019 and October 2020.

According toVali Kaleji , an Iranian expert on Central Asia and Caucasian studies, this trade volume was achieved at a time when the US under former President Donald Trump withdrew from the Joint Comprehensive Plan of Action (JCPOA) in May 2018 and followed a policy of “maximum pressure” against Iran .

In October 2021, Iran and the EAEU started negotiations on the transformation of the SPT intoFree Trade Agreement (FTA). If this is achieved, it will lead to a significant increase in the volume of trade between Iran and the EAEU, also known as the Union.

Both Moscow and Tehran have reasons to insist on further integration of Iran into the Union.

Both sides have reasons to support further integration

For Iran, this opportunity will provide improved access to Eurasian and European markets. It will also provide EAEU member states with greater access to the Persian Gulf and the Mediterranean Sea. For this reason, Moscow may be thinking one step ahead.

Moscow views the signing of an FTA agreement with Iran as a decisive step for Iran’s accession to the Union.

Russia has concerns that if Iran reaches an agreement with the US on its nuclear issue, there could be positive shifts in Iranian policy towards the West. This may not serve Russian interests in Western Asia, especially in Syria.

For Russia, a nuclear Iran is preferable to a pro-Western one. For this reason, Russia would be happy to accelerate the integration of Iran into the Eurasian regional institutions.

Iran’s entry into the nine-member Shanghai Cooperation Organization (SCO) should be viewed from this perspective. Moreover, with the accession of Tehran to the EAEU, neighboring and friendly countries such as Iraq and Syria may follow.

On December 27, 2021, Iran and Iraq agreed to build railroad linking the two countries. The 30-kilometer railway will be strategically important for Iran. It will connect the country to the Mediterranean Sea via the Iraqi and Syrian railways.

It would be a win-win situation for both China and Russia. The situation in which China, as part of its Belt and Road Initiative, and Russia, as part of itsThe North-South International Transport Corridor would have direct rail access to the Mediterranean.

Preventing Turkey access to the Caspian Sea

This route will also compete with India’s Arab-Mediterranean Corridor. One that is connecting India to the Israeli port of Haifa via various UAE, Saudi Arabian and Jordanian railways.

Thus, for China and Russia, strengthening the geopolitical and geo-economic position of Iran in the region is an important step. From Russia’s perspective, having a direct land route through the Levant to the Mediterranean would bolster its strong base in Syria.

It is for this reason that Iran acted prudently in response to the recent Azerbaijani provocations on the border with Armenia. Tehran feared that Turkey would gain direct access to the Caspian Sea and Central Asia through a possible “corridor” from southern Armenia.

For Iran, this would be tantamount to expanding NATO into the Caspian Sea and further towards China. Consequently, the west-east trade route would pose a serious threat to Iran and Russia and isolate them in Eurasia.

According to Khoscheshm, “The hostility from the Western bloc has brought Iran and Eurasia closer to each other, and this has given the Russians and Chinese a strong motivation to accelerate Iran’s entry into the Eurasian bloc in order to strengthen joint economic and geopolitical cooperation and prevent US infiltration into the region.”

Thus, Iran’s accession to the EAEU is a win-win situation for both Moscow and Tehran. Russia would strengthen its geo-economic and geopolitical position in the Middle East, while Iran would have rail links with Russia and Europe and further expand Moscow’s influence in the region.

However, this ultimate goal may still take time to achieve and will face challenges from the US and its allies in the region.

Confidence in the face of uncertainty

The possible entry of Iran into the EAEU will attract investment from neighboring countries in the underdeveloped rail link between Iran and Russia in the Caucasus region.

The opening of communication channels between Armenia and Azerbaijan as part of a tripartite statement dated November 9 will facilitate trade and cargo transportation in the region within the North-South transport corridor.

Under such conditions, the rail network is very important, since the volume of goods transported by rail is much larger and faster than by land and road routes. However, the implementation of these projects is not yet certain.

The state-owned Russian railways halted their projects in Iran in April 2020 due to concerns about US sanctions. Such a decision would have an impact on other programs within the framework of the Russian-Iranian initiative to create a North-South transport corridor.

Both sides will have to wait to overcome US sanctions, as economic routes are always a win-win situation.

By joining the EAEU and integrating into the Eurasian regional organizations, Iran would strengthen its geo-economic position as a regional transport hub, opening the West Asian gate for Moscow’s railway access to the Eastern Mediterranean.

India has key first-mover edge on China in Iran

India doubling down on Iran’s Chabahar port project as strategic counter to China’s Belt and Road gains trade traction

By FM SHAKIL

When China clinched a massive $400 billion bilateral investment pact with Iran, few noted that India was already well-engaged.

By the end of May, India will begin full-scale operations in its first foreign port venture at Iran’s Chabahar. That is facility that opens on the Gulf of Oman that will aim to facilitate more South Asia, Central Asia and Middle East trade while bypassing Pakistan.

India’s US$500 million investment represents a clear and potent commercial challenge to China’s massive port investment in neighboring Pakistan’s Gwadar. Gwadar is a key component of Beijing’s Belt and Road Initiative (BRI).

The 10-year lease agreement, a deal first clinched by Prime Minister Narendra Modi in Tehran in 2016, has until now been hobbled by US sanctions imposed under the Donald Trump administration.  

Indian suppliers and engineers, some with interests in the US, were reluctant to deliver essential machinery and services to Iran on fears they could somehow be sanctioned, despite clear exemptions on Chabahar in Trump’s sanction order. That led to certain speculation that China may take over the project from India.

New Delhi has doubled down and accelerated the project with the shift from Trump to Biden. It is banking like others on a new breakthrough on the Joint Comprehensive Plan of Action (JCPOA) nuclear agreement and a broader US-Iran warming trend.

Aerial view of Iran’s Chabahar port. Image: Twitter

India has supplied two large cargo-moving cranes. It will deliver two more in the coming weeks before the facility’s expected ceremonial opening.

New Delhi is already promoting the port’s potential humanitarian role, noting it was used to send emergency shipments of wheat to Afghanistan during the Covid-19 crisis and pesticide to Iran to deal with a recent locust infestation.

Pakistan is getting worried about losing regional trade

India’s renewed commitment to Iran via Chabahar is already setting alarm bells ringing in neighboring Pakistan, which is already losing regional trade mainly from Afghanistan to Iran despite US sanctions.

India and Pakistan recently announced a renewed commitment to an existing 2003 ceasefire over contested Kashmir. That move that should allow both to focus more on economic linkages than strategic rivalry.

Chabahar has seen limited operations since 2019, a result of US restrictions imposed on Iran’s energy exports. The port handled a mere 123 vessels with 1.8 million tons of bulk and general cargo from February 2019 to January 2021. It is well below its operating capacity, according to reports.

That’s set to change. New Delhi ultimately aims to link Chabahar to its International North-South Transport Corridor (INSTC). It is a project initially proposed by India, Russia and Iran in 2000 and later joined by 10 other Central Asian nations.

Some see the INSTC as a less-monied rival to China’s BRI. Belt-Road-Initiative has invested heavily in Pakistan’s road, power and trade infrastructure. And including huge multi-billion dollar investments at Gwadar port some critics have likened to a debt trap.

Security concerns sparked by armed groups in Pakistan’s Balochistan province, where Gwadar is situated, have hindered progress on various BRI projects and pushed Pakistan to recently ramp up security at the Beijing-invested port.

From India to Europe – cheaper and faster

INSTC envisions a 7,200 kilometer-long, multimode network comprised of shipping, rail and road links. It is connecting India’s Mumbai with Europe via Moscow and Central Asia. Initial estimates suggest INSTC could cut current carriage costs by about 30% and travel times by half.

That means more trade and port activity for Iran and less for Pakistan. Last year Iran has already usurped 70% of Pakistan’s recent transport business at Karachi port.

Landlocked Afghanistan has traditionally relied on Pakistan as its gateway to international shipping routes. However, recent trends indicate that as much as 70% of Afghan transit trade is now handled by Iran.

If India presses ahead as planned with INSTC, Pakistan would be the ultimate loser as Afghan and Central Asian transport business diverts increasingly to Chabahar and away from Karachi and Gwadar.

“Iran had already started working on a 600-kilometer-long railway line connecting Chabahar port to Zahedan, the provincial capital of Sistan-Baluchestan province close to the Afghan border,” he said.

India has already lined up $1.6 billion for the project to facilitate the movement of goods to and from Afghanistan via Iran. India also plans to invest $2 billion to develop supporting infrastructure including the Chabahar-Hajigak railway line in Afghanistan.

Many Afghan traders are plugging into Chabahar

Many Afghan traders still rely on traditional transit routes through Pakistan. However, many are plugging into Chabahar’s comparative cost-effectiveness and speed in handling transit cargo, analysts say. The same is true for Uzbekistan, Tajikistan and other landlocked Central Asian countries looking for alternatives to Pakistani ports.      

Pakistan-Afghanistan trade has recently fallen from around $2.5 billion to $1 billion annually due to wide-ranging differences over the now expired transit agreement.

“Afghans want Pakistan to allow Afghan wheelers to enter into Indian border areas through Wagah for transportation of Afghan export goods and on return upload import consignments from India,”

“Pakistan on the other hand argues that the APTTA is a bilateral arrangement between Pakistan and Afghanistan and not a trilateral agreement to facilitate mutual trade between India and Afghanistan,”.

Chabahar is Iran’s only oceanic port and so far consists of Shahid Kalantari and Shahid Beheshti terminals. Each of which has five berth facilities. The port is located in Iran’s Sistan and Baluchestan Province. It is about 120 kilometers southwest of Pakistan’s Balochistan province, where the China-funded Gwadar port is situated.

In May 2016, India, Iran and Afghanistan signed a trilateral agreement for the strategically-located Chabahar to give New Delhi access to Kabul and Central Asia without having to travel through Pakistan.

Chabahar is regional project unlike Gwadar which is China oriented

The original plan committed at least $21 billion to the so-called Chabahar–Hajigak corridor, which then included $85 million for Chabahar port development, a $150 million credit line to Iran, an $8 billion India-Iran MoU for Indian industrial investment in a Chabahar special economic zone, and $11 billion for the Hajigak iron and steel mining project awarded to seven Indian companies in central Afghanistan.

Unlike Chabahar, which is designed more to serve the economic and trade interests of the wider region, Gwadar is more tilted toward Beijing’s ambitions, analysts and traders say.

Gwadar port’s planned capacity will accommodate a massive 300 to 400 million tons of cargo annually, comparable to the combined annual capacity of all Indian ports. It also dwarfs the 10-12 million tons of cargo handling capacity now planned for Chabahar.

In another comparison, the largest US port at Long Beach, California, handles 80 million tons of cargo, about a quarter of what Gwadar could handle upon completion of a project that is designed largely to receive and move China’s, not the region’s, trade.

Declassified – An alternative to the Suez Canal

In 1963, the United States developed a plan to build a canal from the Mediterranean Sea to the Gulf of Aqaba through Israel. It would become an alternative to the Suez Canal. To dig the channel, it was planned to arrange a series of nuclear explosions in the Negev desert. The project was not implemented due to fears of a negative reaction from neighboring Arab countries. Historian Alex Wellerstein recalled the idea of ​​more than half a century ago in connection with the blocking of the Suez Canal by a grounded container ship

In the 1960s, the United States considered the creation of an artificial waterway that could serve as an alternative to the Suez Canal. It was assumed that the watercourse will pass through the territory of Israel. The American memorandum of 1963 with the corresponding project was declassified in 1996. Now historian Alex Wellerstein remembered about him, having posted a post on his Twitter.

The scientist noted that for the implementation of the plan, it would be required to use 520 atomic bombs

The memorandum was prepared by the Livermore National Laboratory. E. Lawrence (laboratory of the US Department of Energy) and envisaged the use of nuclear charges to create a channel. Explosives were given priority over the traditional method of digging, which was deemed too costly. Wellerstein calculated that for every mile (1.6 km) of the trench, four 2 megaton charges would be needed.

The length of the canal through Israel was supposed to be more than 250 km.

“Such a canal will become a valuable alternative to the Suez Canal and is likely to make a great contribution to economic development,” the memorandum said.

The document provided for several route options. One of them connected the Mediterranean Sea to the Gulf of Aqaba through the Negev Desert in Israel. Further, the ships would fall into the Red Sea and the Indian Ocean. As noted by the experts of the Livermore Laboratory, the canal would pass through an almost uninhabited desert area. This, in their conclusion, made it possible to build the canal with the help of nuclear explosions.

Google Maps / Insider
The technological capabilities of that time made it possible to implement such a plan.

The main obstacle to the launch of the project lay in the political plane. The drafters of the memorandum expressed concern that “the Arab countries surrounding Israel will categorically object to the construction of such a channel.”

According to Forbes, a similar canal digging method was intended to be used in Central America.

Wellerstein recalled the plans of the United States almost 60 years ago in connection with a new state of emergency in the Suez Canal. On March 23, 2021, a huge container ship Ever Given ran aground and completely blocked traffic. According to initial assessments of the situation, work on unblocking the shipping route should have taken no more than two or three days. However, the problem turned out to be more serious. Most likely, the ship will be removed from the shallows within a few weeks, which will lead to economic difficulties, because the ships will have to go around Africa. At the moment, work is underway around the container ship to deepen the bottom. Special tugs are trying unsuccessfully to pull the stranded vessel from the shallows.

“A modest proposal to rectify the situation with the Suez Canal,” Wellerstein commented on his tweet outlining the main provisions of the memorandum. “If I were Elon Musk , legions of fans would applaud me right now.”

The 160 km long Suez Canal was opened for shipping in 1869.

During the First and Second World Wars, traffic on it was regulated by the British. In 1956, Egyptian President Gamal Abdel Nasser announced the nationalization of the canal. In response, the United States, Great Britain and France tried to impose international control of the Suez Canal on Cairo, removing it from Egyptian sovereignty and ensuring that the channel is exploited in the interests of large foreign monopolies. This led to the Suez Crisis, causing the canal to collapse and shut down until the following year.

The Suez Canal was closed again in 1967 after the Six Day War. Subsequently, Soviet specialists took part in mine clearance after the Yom Kippur War in 1973. The canal was reopened for shipping in 1975.

Iran and China Sign ‘Historic’ 25-Year $400 Billion Strategic Partnership Agreement

The signing ceremony came after years of intense behind-the-scenes negotiations. Chinese President Xi Jinping first proposing a draft version of a comprehensive agreement with Tehran during his 2016 visit to Iran

Iranian Foreign Minister Mohammad Javad Zarif and Chinese Foreign Minister Wang Yi signed the highly anticipated Iran-China Comprehensive Strategic Partnership agreement after more than five years of grueling talks.

The comprehensive agreement, signed in Tehran on Saturday, consists of 20 articles, and although details of the pact have yet to be provided, local media indicates that it likely covers everything from political and cultural ties to “security and defence” and “regional and international” cooperation.

The deal reportedly envisions increasing bilateral trade over 10-fold to $600 billion per year. It promises Iran Chinese investment of as much as $400 billion. Mainly into the Middle Eastern nation’s oil, gas, petrochemicals, renewable energy and nuclear energy infrastructure. Tehran is committing to becoming a major reliable source of energy for Beijing.

Bringing Iran into the grasp of Belt and Road infrastructure scheme

The accord also brings Iran into the grasp of Beijing’s Belt and Road infrastructure scheme. An ambitious scheme worth the equivalent of over $1 trillion. It is aiming to link China to Europe and Africa via a series of new land- and sea-based infrastructure projects across dozens of nations.

Iranian President Hassan Rouhani praised the signing of the agreement. He expressed gratitude to Beijing for its support for Tehran in the international arena in the face of unilateral US sanctions, including insofar as the Joint Comprehensive Plan of Action nuclear deal is concerned.

Rouhani went on to suggest that the US military presence in West Asia is the root cause of regional instability. He stressed the importance of collective efforts by regional parties to ensure regional security. Also including via Iran’s proposed Hormuz Peace Initiative mechanism.

Foreign Minister Zarif called the agreement a “historic 25-year strategic roadmap.” Then said he and Foreign Minister Wang had an “excellent exchange on expansion of global, regional and bilateral cooperation in the context of our comprehensive strategic partnership.”

“The nail in the coffin ending US imperialist hegemony over West Asia”

Wang echoed the Iranian officials’ sentiments, saying “relations between the two countries have now reached the level of strategic partnership.” Also that “China seeks to comprehensively improve relations with Iran.”

The foreign minister added that China’s ties with Tehran “will not be affected by the current situation, but will be permanent and strategic,” noting that “unlike some countries,” Iran “does not change its position because of a phone call.”

Independent investigative journalist Ben Norton called the deal “huge.” He characterized it as “the nail in the coffin ending US imperialist hegemony over West Asia.”

Bloomberg described the inking of the deal as a “challenge” to the Biden administration. As the latter works to “rally allies” against Beijing. “Iran’s closer integration with China may help shore up its economy against the impact of [US sanctions]. It is sending a clear signal to the Biden administration of Tehran’s intentions.”

A draft version of the agreement is thought to have been leaked by the New York Times last year. It is envisioning security cooperation, intelligence sharing, joint drills, and dramatically expanded economic ties. Tehran did not confirm the authenticity of the leaked document at the time. However it admitted that it was indeed negotiating a major 25-year strategic partnership agreement with Beijing.

After the Biden administration made clear that it would not lift sanctions and return to the nuclear deal unless Iran dramatically reduced its uranium enrichment activities, Iranian Supreme Leader Ali Khamenei announced that “the post-US era” had begun.

Will China’s bruited $400 bn. investment in Iran make Beijing an oil Gulf power?

By Niranjan Jose

he relationship between China and Iran has been in the spotlight recently. A huge, 25-year deal is reportedly being considered that would see $400 billion of Chinese investment in Iranian energy and transport infrastructure. The deal is the latest effort by Beijing to expand from a regional hegemon into a global power through the Belt and Road Initiative (BRI) which aims to reshape regional economic topographies in its favour.

Beijing has ostensibly undertaken to make such a massive investment in key sectors of Iran’s economy in return for an assured supply of Iranian fuel for the next 25 years. The proposed investment is the biggest China has ever pledged to any country as a part of the BRI and envisages huge expenditure in building Iran’s oil and gas and infrastructure, at $280bn and $120bn respectivel

According to the information available, China is to spend $120bn to develop Iran’s transport network starting with the 2,300 kilometre road that will connect Tehran to Urumqi in Xinjiang Province. This route will be paved with the Urumqi-Gwadar connection built under the “New Silk Road” in the China Pakistan Economic Corridor.

When completed, the road link will have an ambitious plan to connect with Kazakhstan, Kyrgyzstan, Uzbekistan and Turkmenistan, and thereafter via Turkey into Europe.

Beijing also plans to deploy over 5,000 Chinese security personnel to protect its investments in Iran. It is among the top three arms suppliers to the Iranians, according to SIPRI data, exporting weapons worth about $270 million to Tehran between 2008 and 2018.

The first trilateral naval exercise between China, Russia and Iran was held in the Gulf of Oman in December last year. Strategically, all three nations are empowered by the common perception of an enemy in Washington and fears of US military interventionism.

Iran seeks to expand its military influence in the region by obtaining Chinese weapons and expertise, while China seeks to develop Iran as a lucrative arms market and a strategic bulwark against US forces in Asia.

The top economic advisor to Iran’s Supreme Leader Ayatollah Ali Khamenei is Ali Agha Mohammadi who appeared recently on state television to address the need for a financial helping hand.

He said that to remain a player in the energy sector, Tehran needs to boost its oil output to at least 8.5 million barrels per day, and for that it needs China. As Iran’s biggest trading partner, China overtook the European Union in 2010, with about one-third of Tehran’s overall international trade being conducted with Beijing.

Iran’s oil industry was more dependent on China as a trading partner, despite sanctions implemented by the US and the UN in 2010. Only 5 percent of Iran’s overall oil exports went to China in 2000; however, by 2011 that had increased to 25 percent.

China has also become a major investor in Iran’s oil and gas industry, as the US and international sanctions have limited Tehran’s access to international finance and the innovations needed to develop its declining energy industry. In 2012, at the height of restrictive economic sanctions, China imported 54 percent of Iran’s oil output by alternative financial structures, including barter.

There are plenty of motives for China and Iran to collaborate as their economies are complementary.

China is the world’s largest oil importer, and Iran wants clients ready to counter US sanctions. Moreover, Iran needs modernized technology in areas such as rail and 5G networks, where Chinese companies have strengths.

Tehran has increasingly turned to Beijing for support in its long-running conflict with the US. China has also been vocal in its support for the 2015 Iran nuclear deal, vowing to uphold it even after Washington withdrew from the pact.

Iran is situated at the crucial nexus of the Middle East, Central Asia and South Asia, as well as the critical trading networks that run through the region. Beijing has identified Iran as a link along the BRI, connecting Xinjiang with the Middle East.

Relations between Beijing and Tehran, which date back to Iranian President Mahmoud Ahmadinejad’s “Pivot to the East“ policy, have blossomed under Chinese President Xi Jinping, who is pushing China’s ambitious initiative.

The alliance developed over four decades across three phases: military cooperation during the 1980/88 Iran-Iraq War; energy cooperation in the 1990s as China developed quickly; and oil deals which defied sanctions. The “maximum pressure” policy and sanctions imposed on Iran by the Donald Trump administration has failed.

Far from isolating Tehran, as intended, the exertion of significant economic pressure on the Iranian regime has pushed it further into the arms of Beijing. China is criticized by Western policy observers for its so-called “debt diplomacy”, the strategy of indebtedness through aggressive investment packages to an economically vulnerable country.

This acts as leverage for important property acquisitions; one of the most prominent examples is the Hambantota Port in Sri Lanka, which the government had to lease to China for 99 years after it struggled to repay Chinese loans.

Beijing is utilizing Tehran’s rising vulnerability intensified by the health and economic crises due to Covid-19. The latest cyber-attacks on its atomic and maritime facilities have also driven Tehran into the arms of China.

After all, the growing superpower provides an insatiable energy demand, military and industrial infrastructure, huge spending and a possible global diplomatic shield, with its veto at the UN Security Council.

All are needed desperately by Iran. The agreement is not only seen by both nations as mutually advantageous, but also as a possible tool to challenge US hegemony in the Middle East.

China sees seamless possibilities in its strategic partnership with Iran, with a low-cost supply of oil, abundant mineral resources and an untapped market. Beijing’s Iran strategy is affected by its increasing footprint in the Persian Gulf, where it cautiously develops a position centred on highly diverse ties with regional powers, along with its global confrontation with the US.

The State Department in Washington has already threatened to target Chinese companies if they make investments in Iran which defy US sanctions.

Nevertheless, China is already in a trade and technological war with the US and seems determined to go ahead with its partnership with Iran. Beijing continued to buy Iranian oil over the past year even after the US sanctions’ waivers expired in May 2019, albeit in smaller volume.

With the US swamped by exhausting wars in the Middle East in recent years, China has steadily increased its political, commercial and even military operations in the region.

Its motives are clear, though varied; it aims to promote its goals, such as a growing need for oil supplies and destinations for surplus labour and capital.

China is mindful that none of the major powers returned unscathed from wars in the Middle East and are confronting a very challenging variety of obstacles.

The broad political fissures in the region render it impossible for outsiders not to take sides in the numerous conflicts. This presents a challenge to China, which seeks to be a partner for everyone, Iran, Israel and Arab states alike, in order to reap the advantages of its global involvement.

Even if just a portion of what is envisaged under the planned Sino-Iranian deal comes to life, it presents a deadly threat to the campaign against Tehran by the Trump administration.

China’s investments in Iran allow it to exert its influence on Iranian foreign policy, and will enable China to do three things: allow China to diversify its energy needs without overly relying on Russian energy; elevate its claim to offer an alternative to the “Washington consensus” by defying US sanctions against Iran and continuing to trade with Tehran; allow China to control India’s access to Central Asia by enhancing Beijing’s relationship with Iran.

Originally published at juancole.com


Niranjan Jose is a law student at the National Law University Odisha (NLUO), India.