(This is a reprint from NewsBred).
I am not a stockbroker but if I was I would bet big against Donald Trump unleashing a war against Iran.
I mean he heads a country which needed half a million of its servicemen to tame a small Kuwait and prepared six months to arrange for its logistics. How would do you do against a large territory like Iran?
His country United States can’t fight two medium-sized wars and can it really afford to free up Far East and China who would strangulate Taiwan the moment it’s off-radar?
And please don’t give me this Nuclear-muscle nonsense. It works best before you use it. You can nuke a Hiroshima or Nagasaki but you can’t nuke the whole of Iran.
It’s also as if Trump doesn’t know that Pentagon would give a damn to his command for war. US can only declare war if its army wants so—as was the case with Vietnam and Iraq. The military generals of the US have already rejected the notion of abiding with the President’s order for an illegal war.
We know the US, the adolescent that it is of only 200-odd years, makes some silly mistakes (Remember the hostage crisis of the 70s: Jimmy Carter’s helicopters couldn’t fly over Iran at a low height because its filters got clogged with sand). But a war with Iran would be worth an Oscar of the Absurd.
For one, if you don’t allow oil out of Iran to the world; Iran would stop any oil to go out of the Middle East (see picture). Shias are everywhere: 60% of Iraq is Shia; 80% of Bahrain is Shia; the majority in Kuwait is Shia; the oil in Saudi Arabia is controlled by Shia. Iran would damage tankers and make sure the blame doesn’t come its’ way. In the last one month itself, four tankers anchored near Fujairah in UAE were damaged. Two tankers with petrochemical products were attacked in Gulf of Oman this week. No traces were left. It would become a routine. Saudi refineries could go up in smoke. Iran has strategic partners in Syria, Iraq, Lebanon, Yemen and even Afghanistan.
We also know that the US’ Iran policy is based on a single agenda: Change of Islamic revolutionary regime in Iran. This agenda is unfulfilled even after 40 years. This is a country which unlike a France or England could survive on half a bread. Threat of a war, doesn’t open up the factional feuds in the country. Instead it draws them together—as Western-oriented parties and hardliners are hugging each other at the moment.
It’s also as if the US doesn’t know that its’ tough stance would probably make Iran a nuclear-powered regime in six months. Iran announced on June 17 that it would start withdrawing from compliance with the 2015 nuclear agreement. But if the US pulls out of the deal unilaterally and the other signatories of the pact—China, Russia, France, Britain and Germany—hold their silence, what options Iran is really left with but to press on the raw nerve which inked the pact in the first place?
In this week itself, Iran would exceed the limit on enriched uranium which the 2015 deal had stipulated—only 300kg of uranium hexafluoride enriched to 3.67 per cent, or it’s equivalent, for 15 years. If Iran adds a few thousand extras of centrifuges, it would reduce the time Iran needs to arm itself with a nuclear weapon.
And how do you think Iran’s opponents would face up to the Persians? Saudi Arabia is so pathetic it can’t even bring tiny Yemen to submission. They can’t do anything to Houthi. A war would only make Turkey stronger. Iran is already being wooed by Russia and China. A common bank is being set up by Syria, Iraq and Iran to facilitate trade between these countries.
If anything a war would break up the United States. By mid-2020, oil prices would hit the roof. Insurance premiums on tankers would be prohibitive. Consumer prices of oil products would multiply. If oil prices exceed $100 per barrel, it would hit China, Europe and the US. If the oil prices are doubled, the US would be in ruins. It is the biggest consumer of electric power. It doesn’t matter where it gets its energy from, be it Texas, Siberia or Saudi Arabia: if it’s 150% per barrel, US is destroyed.
Then why the hell is the US tightening its screws on Iran? And Donald Trump is increasingly sounding like John Wayne with holster unbuckled?
The short and sweet answer is: Trump wants to stoke up fears in the Middle East so that it could sell its military hardware to Iran’s opponents and fatten up its GDP. It never wanted a war, it never would. If the US wanted a war, it wouldn’t be looking the other way as Iran continues to sell 300 million cubic feet of gas to Iraq. Iran’s sale of oil in the region could go up to two million barrels of oil daily.
The trouble is, Iran knows the game and is upping the ante: It has given an ultimatum to remaining signatories of the 2015 Pact either fall in line by July 7 and help preserve the nuclear deal or face the music. It’s a classic case of the hunter becoming the hunted. Trump has climbed up a tree but doesn’t know how to get down.
Fun, I say.
(This is a reprint from NewsBred).
United States wants India to cut down its oil imports from Iran which stands as its third biggest supplier after Iraq and Saudi Arabia. President Donald Trump has followed his pre-election promise with withdrawal from the 2015 Joint Comprehensive Plan for Action (JCPOA) which had enabled China, Russia, France, Germany UK, European Union and the US itself to dilute the economic sanctions against Tehran. Now the sanctions are back in place with the deadline of November 6, 2018 and the world is in turmoil, no less India.
The Trump administration has chosen a new way to browbeat the countries which don’t fall in line. Last August, it introduced CAATSA (Countering America’s Adversaries Through Sanctions Act) to scare those away from trade relations with “hostile” countries such as Russia, North Korea and Iran. International banks and companies which defy the sanctions would bear the brunt. Less oil imports from Iran would hike up the prices and import bills, not just of India but of many around the world. It would hit both inflation and Indian rupee. Since US dominates the re-insurance and payment gateways, bypassing them is difficult.
India’s dilemma is apparent. Before 2005, it paid $12-14 billion annually to oil bills by Iran. But signing the 2005 Indo-US Nuclear Civil Deal, gave New Delhi’s leash in US hands. India voted against Iran in the IAEA General Conference in September the very year; dithered on the Iran-Pakistan-India Pipeline and sounded the death knell of Turkmenistan-Pakistan-India (TAPI) gas pipeline project. By 2014, India had reduced the Iranian oil imports to $4 billion annually.
The US treasury methodically shut down the banking options for India who then began paying Turkey by cash which then converted it to gold bars and sent it across to Tehran. India was in no position to pay oil bills in US dollars. India did try the balancing act: while Reserve Bank of India (RBI) ceased dealing with Tehran-based Asian Clearing Union in 2010, it came to an understanding with Iran to pay half of its bill in Indian rupees in 2012.
But once the JCPOA came into being, India-Iran trade relations grew back to 2012 days. India also decided to pay out $6.5 billion it owed to Iran, held up due to sanctions. Modi government renewed the stalled Chahbahar port project. Its’ ministers made a beeline to Tehran with promises of oil and infrastructural projects. Iran obliged on its part by granting Oil and Natural Gas Commission (ONGC) the gas fields of Farzad B for exploration. The air of optimism only grew better when Iranian president Hassan Rouhani visited New Delhi this February with his oil minister Bijan Zanganeh. India pledged it would double its oil imports from Iran in 2018-2019. Iran, on its part, promised to cut down the freight by $1 per barrel. India pledged to increase import by 500,000 barrels a day.
But now comes the fresh US imposition. Even though foreign minister Sushma Swaraj has reiterated India would only abide by the mandates sanctioned by the United Nations (UN), it’s easier said than done. India and US have a booming trade of $140 billion which could take a grave hit, as well as around $31 billion of bilateral trade surplus advantage India has. Chahbahar port project, which could save millions in trade and increase Afghanistan’s tilt towards India, stands to lose steam. Besides, it just would give a bigger fillip to China to snug closer to Iran, shutting the doors on India.
India would be encouraged by the stand of UK, France, Germany who have expressed “regret and concern over Trump’s disruptive action. The Modi government meanwhile has started to flex its own muscles: in reaction to US postponing the 2+2 dialogue, India has declined US’ offer to host Defence Minister Nirmala Sitharaman. India also seems steadfast in increasing its military deals with Russia which faces similar offensive sanctions from United States.
The one fall-out of all this, including trade barriers ratcheted up by both US and India, is Modi government swinging back appreciably into the China-Russia zone. India has this strategic advantage where countries are looking to wow India rather than the other way around. However, India-US relations for the moment are several notches down than they have ever been since Trump came to power.