Massenbach-Letter: NEWS 22/08/14

Massenbach-Letter. News

*Herausgegeben von Udo von Massenbach, Bärbel Freudenberg-Pilster, Joerg Barandat*

Guten Morgen.

· Peter Scholl-Latour passed away http://www.agbc-berlin.de/content/peter-scholl-latour-ist-tot *

· The Real Middle East Crisis Is Economic (Washington Institute for Near East Policy)

· Bulgarian foreign minister discusses Georgieva EC nomination with EU envoys

· USA Today: To fight ISIS, make peace with Syria’s Assad: Column

· Will the U.S. fight for a Middle East where minorities can thrive? This is a struggle to fit the modern world into Arab society, and vice versa.

Massenbach* Russia, EU exchanging glances

Open dissent erupted at the European Union foreign ministers’ meeting on Friday regarding sanctions against Russia. In an extraordinary outburst, Hungary’s prime minister ridiculed, here, that the Europeans are shooting at their own feet. Earlier, Slovakia and Czech Republic also sought a rethink on the sanctions policy. That leaves Poland, Lithuania and Romania as the odd ‘hawks’ in ‘New Europe’ allied with Washington.

Finland has separately stated that it won’t join the sanctions bandwagon anymore and would seek normal trade with Russia. President Sauli Niinisto travelled to Moscow and met Putin last week to discuss trade and the economic relations.

The Guardian newspaper has a hilarious story, here, detailing that Russia’s retaliation has left Europe with a glut of perishable food items. Besides, Russia is seeking alternate sources of import of agricultural products from outside the EU — Turkey, Brazil, Egypt, israel and so on. The EU is now wondering how to persuade these countries not to play ball with Russia.

But why should they listen to the Europeans? They harbor no grouse against Russia. From all accounts, Egypt’s President Abdel Fattah al-Sisi, in particular, gets along fine with President Vladimir Putin. Besides, what is the European objective anyway — make sure that Russian people don’t get to eat enough vegetables and fruits and would have vitamin deficiency unless the Kremlin changed its Ukraine policies in accordance with the EU’s wishes? This is all becoming a silly joke.

However, something good will come out of this all if Russia comprehensively discredits the West’s onboxious practice of using sanctions as political weapon against obstreperous countries that refuse to buckle down to their leadership. Equally, one would expect the EU to be in a chastened mood, with the signal that a meeting is on the cards between Putin and Jose Manuel Barroso, president of the European Commission.

The big question is whether Washington will tolerate such a thaw in Russia-EU ties. Intrinsically, Ukraine has no strategic significance to the US — and little to the EU. A settlement over Ukraine is easy to reach if there is political will — the West dropping its agenda to get Ukraine into NATO while Russia learns to live with a Western-oriented government in Kiev and eastern Ukraine is granted a significant degree of cultural and governmental autonomy.

Everything narrows down, finally, to Washington letting Europe take the lead in putting its security and prosperity on the line. This is where the Hungarian prime minister’s remarks assume significance. Indeed, Putin’s conciliatory remarks last Thursday in his widely-noted speech at Yalta could be the harbinger of new tidings in Eurasian politics.

http://blogs.rediff.com/mkbhadrakumar/2014/08/17/russia-eu-exchanging-glances/

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*Bulgarian foreign minister discusses Georgieva EC nomination with EU envoys*

Bulgaria’s nomination of its incumbent European Commissioner, Kristalina Georgieva, for a second term – but this time as EU foreign policy chief – was discussed at a meeting between caretaker Foreign Minister Daniel Mitov and EU ambassadors in Sofia, the Foreign Ministry said.

Bulgarian Foreign Minister Daniel Mitov at his meeting with EU ambassadors in Sofia. Photo: mfa.bg

Bulgaria belatedly nominated Georgieva, a step taken by the caretaker cabinet at its first sitting, after internal squabbling earlier when the now-departed Bulgarian Socialist Party administration tried to push forward a candidate of its own.

Georgieva won support among influential EU countries to become EU foreign policy chief in the Juncker European Commission that will take office in November. However, a July meeting of EU leaders failed to resolve the question of the appointment and it has been left – along with other EC portfolios – for them to decide at a special meeting on August 30.

For the full story, please click here.

http://sofiaglobe.com/2014/08/20/bulgarian-foreign-minister-discusses-georgieva-ec-nomination-with-eu-envoys/?utm_source=rss&utm_medium=rss&utm_campaign=bulgarian-foreign-minister-discusses-georgieva-ec-nomination-with-eu-envoys&utm_source=The+Sofia+Globe+Daily+Bulletin&utm_campaign=6a9b016db2-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_8c38ec575a-6a9b016db2-66164713

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Policy= res publica

Freudenberg-Pilster* Russische Saftpresse – Moskaus Embargo trifft griechische Obstbauern *

Die griechische Landwirtschaft bekommt die russischen Sanktionen gegen die Europäische Union zu spüren. Obst und Gemüse aus der Union darf nach dem Willen Moskaus nicht mehr eingeführt werden.

Auf dem Fruchthof von Naoussa endet das Obst entweder im Abfall oder zu einem Bruchteil seines erwarteten Verkaufswerts in der Saftpresse.

“60 Prozent unserer Pfirsichernte geht nach Russland, die Hälfte aller Kiwis. Unsere Erdbeerernte sogar zu 90 Prozent! Russland ist unser Hauptabnehmer. Über Jahre haben wir viel in diesen Markt investiert”, so der Landwirtschaftsfunktionär Christos Giannakakis.

Die Kühlhäuser sind voll. Doch die Früchte können hier nicht ewig lagern. Schon bald werden auch diese Pfirsiche reif sein für die Mülltonne.

“Dreitausend Tonnen Pfirsiche sind es allein hier im Kühllager der Fruchtkooperative von Naoussa. Noch werden die Produzenten für den entstandenen Verlust entschädigt, doch das gilt nicht für die kommenden Monate”, so die Euronews-Reporterin. “Die genaue Höhe des Schadens ist schwer zu beziffern. Die griechischen Bauern sehen sich als Opfer eines Wirtschaftskrieges zwischen der EU und Russland.”

Am Donnerstag werden die EU-Agrarminister über mögliche Entschädigungen für die europäische Landwirtschaft beraten. Denn nicht nur Fruchtproduzent Griechenland ist betroffen, auch Spanien, Portugal und andere Länder leiden unter dem russischen Einfuhrverbot.

Die Situation belastet auch diesen russischen LKW-Fahrer: “Ich sollte hier in Griechenland laden, dann sagte man mir, dass es ein neues Gesetz gibt, das die Einfuhr von griechischen Produkten verbietet. Also bin ich zurück auf den Parkplatz. Und da steh ich nun seit einer Woche. Keine Ahnung wie lange noch.”

Kurz vor Bekanntwerden des Embargos waren die LKW planmäßig abgefahren. Nun kommen sie einer nach dem anderen zurück. Mit Tonnen verderblicher Ware an Bord, weiß der Präsident einer griechischen Fahrervereinigung: “Einige Händler haben versucht, den Schaden zu begrenzen und die Früchte auf anderen Märkten abzusetzen, wie etwa in Weißrussland, der Ukraine, Polen oder Tschechien. Und wenn es nur zum halben Preis wäre.”

Selbst wenn ihnen das gelingt: Für die griechische Landwirtschaft insgesamt bleibt das Embargo eine Katastrophe.

http://de.euronews.com/2014/08/13/russische-saftpresse-moskaus-embargo-trifft-griechische-obstbauern/

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Politics: From Vision to Action

Barandat* AfPak through Russian looking glass *

Embedded within a major speech on Thursday at Yalta, Crimea, while addressing a special gathering of the Russian political elites, were two pithy observations made by President Vladimir Putin relating to regional security in South Asia. One was regarding the situation in Pakistan and the second related to the American and NATO role in Afghanistan.

In sum, Putin sounded “alarm” over the fluidity in Pakistan and drew attention to the specific danger with regard to that country’s missile development program. Putin was speaking about the proliferation of medium and short-range missiles posing challenge to regional security and then went on to differentiate between India’s missile program and Pakistan’s.

Interestingly, Putin also brought in the aspect of nuclear security, and the safe custody of that country’s nuclear weapon stockpile. This is what he said:

“North Korea, the People’s Republic of China, Pakistan, India, Israel and Iran – almost all the countries in the world are working on this type of weapons. Now, the development of these missiles in China or India does not cause any concern to us, because these are friendly states and I am certain that the relations we have established with China and India will last, bearing in mind the peculiarities of international relations and prospects of their development. However, the development of this class of missiles, say, in Pakistan cannot but raise our alarm because, frankly speaking, we know that this country has a complicated and so far unstable political regime, unfortunately, and we do not know how the situation will develop and who will have control over these weapons, especially considering that this is a nuclear power.”

Of course, Putin was speaking against the backdrop of the fragility of the overall security situation in Pakistan, but he would also seem to have factored in the looming political confrontation in Pakistan involving the elected government of Prime Minister Nawaz Sharif on one side and the opposition figure Imran Khan and the noted cleric Tahirul Qadri, who are credited with enjoying the tacit support or encouragement of the Pakistani military.

With regard to the Afghan situation, interestingly, Putin made it clear that the US and NATO strategy to remain committed to that country’s stabilization in the period beyond 2014 meets with Russia’s security interests. He put it strongly that Moscow is not at odds with the Barack Obama administration’s Afghan strategy and even bemoaned that the NATO countries are not using the Ulyanovsk air base which Russia offered as a transit hub in the Northern Distribution Network for ferrying supplies for the Western troops in Afghanistan.

Putin said, “we should never follow the principle of harming ourselves simply out of spite. We are interested in stability in Afghanistan. So, if some countries, say, the NATO states or the United States, are investing resources, including money into this – it is their choice, but it does not run counter to our interests. So why should we stop them?”

He added: “Do you want us [Russia] to get into war there [Afghanistan] again? No, I do not believe anybody wants this. Therefore, if we see any unlawful actions [read Western sanctions] regarding this country [Russia], we consider them and look for ways to respond. However, our response should not harm us; it should only be beneficial for us.”

The astute diplomat that he is, Putin may have signaled to the US and its major allies that the differences over Ukraine need not — even should not — make Russia an ‘enemy’ country, since there are vital areas of international security where the core interests of Moscow and the Western capitals converge. Most important, Putin implied that Russia has not locked itself into a zero sum mentality vis-a-vis the West, leave alone viewing global threat of terrorism such as in Afghanistan (or in Iraq or Syria) through any New Cold War prism.

Shorn of diplomatese, he probably meant to say — ‘Look, partners, this rotten idea of imposing sanctions against Russia was entirely your decision, and, while we give a response safeguarding our national interests, it is up to you to ponder over the idiocy of what you have done, and we are open to discussion.’ Indeed, the curious thing about the Russian-American antipathies is that the two sides are never quite denuded of realism.

Will Washington reciprocate Moscow’s ‘cooperation’ on Afghanistan? In a way, it may be doing that already. Pentagon has apparently ignored the US Congress’ objections and is insisting that it will continue to source Russian-made helicopters for use in Afghanistan. It is no doubt a lucrative deal for Russia, worth over $1 billion.

Coming back to Afghanistan, what Putin said is sure to provide a significant input for the NATO summit due in Wales next month. This is one thing. Conceivably, Putin could not have overlooked that there is a high probability, as things stand today, that the US might decide on a complete withdrawal of all troops in Afghanistan. It is not in Russia’s interests if the US and NATO were to throw Afghanistan under the bus and simply walk away at this point.

On the other hand, the dispute over the disputed Afghan presidential runoff increasingly seems intractable and it cannot but be a matter of exasperation for President Obama that not only is the prospect of an orderly transition in Kabul receding but the signing of the US-Afghan security pact is in limbo . It could well turn out to be that President Hamid Karzai only may represent Afghanistan at the NATO’s summit in Wales, something which Obama will find highly distasteful (and NATO will see as pointless), since Karzai stubbornly refuses to put his signature on the security pacts formalizing the alliance’s military bases in Afghanistan. Putin’s speech at Yalta is here..

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Vladimir Putin had a meeting in Yalta with members of political parties represented in the State Dumа.

Taking part in the meeting were Prime Minister Dmitry Medvedev, State Duma Speaker Sergei Naryshkin, heads of State Duma political party groups and heads of federal ministries.

* * *

Excerpts from transcript of meeting with members of political parties represented in the State Duma.

http://eng.kremlin.ru/news/22820

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“This is a struggle to fit the modern world into Arab society, and vice versa.”

*Will the U.S. fight for a Middle East where minorities can thrive?*

By Jim Hoagland August 15 at 8:06 PM

Jim Hoagland is a contributing editor to The Post.

Somewhere in the afterlife, Mullah Mustafa Barzani, the eagle of the Zagros Mountains, is smiling. His pleas for the United States to provide arms directly to his Kurdish warriors to repel Arab invaders are finally being answered.

The arms deliveries are late — Barzani first made his appeals in the The Post four decades ago — and they are minimal, considering the Kurds’ needs. But they mark a change for the Middle East that may be more significant than realized even by the Obama administration and its European allies.

In 1972, Barzani, as gruff and commanding a tribal chieftan as Hollywood could have ever created, foresaw the genocidal assaults by Saddam Hussein’s forces soon to come on the Kurds’ mountain redoubt in northern Iraq. But Washington did not respond to his pleas for direct arms shipments. Saddam’s troops smashed the Kurds’ defenses in 1975, Barzani fled into bitter and lonely exile in a CIA-monitored safe house in Northern Virginia (where he died in 1979), and Iraq’s long night of terror under Saddam began in earnest.

Much has changed since then. Indirectly empowered by the U.S. military interventions of 1991 and 2003, the Kurds regained control of their homeland. Barzani’s son, Massoud, led Kurdistan into an era of relative prosperity and stability by pursuing solid economic cooperation with Turkey to the west while deftly handling Iran to the east.

But this has not changed: The Kurds are still a non-Arab minority who refuse to be absorbed culturally and politically into an Arab-dominated society. They are relatively tolerant Sunni Muslims who speak an Indo-European language and protect their heritage with a fierce pride.

Their resistance to assimilation and rule by Baghdad helped spark Saddam’s ethnic cleansing and resettlement of large Arab populations into Kurdish areas. Today, the Kurds’ continuing yearning for self-determination helps drive a hatred of them by the Sunni extremists and chauvinists of the Islamic State movement who have seized Mosul and surrounding areas.

The Islamic State’s barbaric advance has undermined an unavowed but strong tenet of Western policy in the Middle East. Until now, the United States and Europe have been extremely reluctant — fearful may not be too strong a word — to be seen to support minority ethnic and religious groups in any Arab state. That could provoke the wrath of all of the Arab states, including important (Sunni-run) oil producers.

Such timidity played a role over the past half-century in the suffocation or dislocation of vibrant populations of religious and ethnic minorities that once made the Middle East a fascinating mosaic of Greeks in Egypt, Armenians in Lebanon, Circassians in Jordan and many others.

Even more important to the societal pressures that have squeezed the freedoms and space of minorities in national life throughout the region has been the Sunni-Shiite civil war that has raged in various forms within Islam since the founding of Iran’s Islamic Republic in 1979. The Islamic State and other armed factions wage war to achieve a social monolith of Arabness, as well as a monotheistic caliphate. The demand by Islamic State leader Abu Bakr al-Baghdadi that the Yazidi sect and Christians of Iraq convert to his brand of Islam or die is a particularly brutal example of coercive conformism. But it differs in degree rather than kind from Salafist and Wahhabist intolerance toward other religions and cultures.

By promising to protect the Yazidi sect from “genocide” and providing the Kurds with arms and ammunition previously denied them by Baghdad, President Obama has — knowingly or otherwise — stepped away from traditional U.S. caution about openly siding with such non-Arab minorities. (The Kurds’ recent successes are welcome but unintended side effects of U.S. actions in Iraq.)

The president is right to have done this and should persist. But U.S. policymakers also need to evaluate the deep, civilizational roots of the conflicts in Iraq and elsewhere. Conservative, male-dominated societies in the region feel they are under mortal attack by the intrusion of the outside world and particularly by outside views on gender equality and the nature of their religion. They lash back.

What is at stake here is not simply whether Nouri al-Maliki or Haider al-Abadi should be prime minister of Iraq. It is even larger than the hopes of freedom that my friends the Kurds harbor.

This is a struggle to fit the modern world into Arab society, and vice versa. A success in that undertaking would be the best protection minorities there could have — and a fit monument to the tribal leader I remember fondly as the eagle he was in Kurdistan, not the caged bird Washington let him become.

Read more on this topic:

The Post’s View: The U.S. needs a comprehensive plan for combating the Islamic State

Masoud Barzani: Kurds need more U.S. help to defeat Islamic State

Joseph I. Lieberman: U.S. has a chance to stop the Islamic State

http://www.washingtonpost.com/opinions/will-the-us-fight-for-a-middle-east-where-minorities-can-thrive/2014/08/15/67e9d65e-23f2-11e4-958c-268a320a60ce_story.html?wpisrc=nl_opnsat&wpmm=1

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Middle East

· COLUMN-Petroleum producers shift attention from Middle East: Kemp *

11:55am BST

(John Kemp is a Reuters market analyst. The views expressed are his own)

By John Kemp

LONDON, Aug 15 (Reuters) – Following four decades of war, sanctions, nationalisation and unrest, oil and gas producers are gradually adjusting to rely less on the Middle East.

The countries around the Persian Gulf and on the Arabian Peninsula still contain the greatest concentration of giant and super-giant fields anywhere in the world and have some of the most attractive oil and gas geology.

But the increasingly hostile political environment above ground has forced oil and gas companies to hunt for new reserves in other parts of the world where the geology is tougher but political conditions are much easier.

Diversification away from the Middle East is one of the main reasons why oil prices have remained virtually unchanged as unrest has spread across much of the region since 2011.

OUTPUT AND RESERVES

The region’s importance has been declining in terms of both production and share of proved reserves in recent years (link.reuters.com/duq62w).

In 2013, the countries of the Gulf and the Arabian Peninsula, which the BP Statistical Review of World Energy terms "the Middle East", accounted for almost 33 percent of global oil production and 17 percent of gas output.

But the share of both has flattened in the last three years after rising strongly since the mid-1980s.

The shift away from the Middle East is even more marked in terms of proved reserves, which represent future production.

Middle Eastern countries accounted for 48 percent of proven oil reserves worldwide in 2013, down from 56 percent in 2005 and 64 percent in 1993, according to BP.

The region contained 43 percent of proven gas reserves, down only marginally from 46 percent in 2005, but ending the steadily increasing share that had characterised the market since the 1980s.

For the last two decades, oil and gas producers have been adding reserves more rapidly outside the Middle East.

Between 1993 and 2013, oil producers added to proved reserves at an average annual rate of 4.2 percent in the rest of the world but just 1.0 percent in the Middle East.

Over the same period, gas producers added reserves in the rest of the world at an average rate of 1.8 percent per year compared with 3.0 percent in the Middle East.

But growth in the Middle East has slowed recently. In the second half of the period, reserve growth in the rest of the world accelerated to 2.3 percent a year, while reserve growth in the Middle East eased to just 1.1 percent.

The metaphorical centre of gravity in the global oil and gas industries is gradually shifting from the Middle East towards North and South America, Africa and Asia.

And the trend seems set to continue over the next decade, given the shale boom in North America, and intensive exploration and production in other regions outside the Middle East.

RELATIVE LATECOMER

The Middle East was a comparative latecomer to the oil and gas industry and its dominance of global production is a relatively recent phenomenon.

During the first five decades of the 20th century, global oil production was dominated by the United States, Mexico, Venezuela, Romania, Russia, Malaysia and Indonesia.

The first oil was found in Persia only in 1908, followed by Iraq in 1927, Bahrain in 1932, Kuwait in 1937, Saudi Arabia in 1938, the United Arab Emirates in 1954 and Oman in 1962.

As late as the 1940s, the Middle East was still a relatively small oil producer in global terms. In 1950, the Persian Gulf countries accounted for less than 17 percent of worldwide production.

Massive field discoveries between the 1940s and the 1960s, and extensive development work by the international oil companies, boosted the Gulf’s share of global output to 25 percent in 1960 and 31 percent in 1970.

But disputes escalated over pricing and government revenues. Between 1970 and 1980, a wave of nationalisations saw all production in the region pass into government ownership, after which production growth all but ceased.

The Middle East’s share of global oil production peaked at 37 percent in 1975, a record that has never been seriously challenged since then.

REGIONAL STAGNATION

The Mid East region has become progressively more hostile for international oil and gas producers.

Nationalisations in the 1970s were followed by the Iranian revolution; the Iran-Iraq war; the first Gulf War between Iraq and the United States; sanctions against Iraq; the second Gulf War; intensified sanctions on Iran; the eruption of a civil war in Syria; and now an insurgency in northern Iraq.

Only Saudi Arabia, Kuwait, Bahrain, Qatar and the UAE have retained a fragile sort of calm amid the violence and geopolitical instability (and Bahrain was convulsed by riots in 2011).

With the exception of Saudi Arabia, the UAE and Qatar, the rest of the region has achieved no net growth in oil production since 1976.

Even in Saudi Arabia, production gains over the last 37 years (2.8 million barrels per day since 1976) pale in comparison with the increases achieved during the 1950s, 1960s and early 1970s.

Increasingly locked out of the best Middle Eastern oil and gas fields, international oil companies have been forced to shift their efforts to other, more readily accessible, sources of supply.

Huge new oil provinces were developed during the 1970s and 1980s in Alaska, the Gulf of Mexico, the North Sea and the Soviet Union in response to the oil shocks of 1973 and 1979.

Collapsing oil prices after 1985 led to a big reduction of exploration and production expenditure around the world and stemmed the shift away from the Middle East. But the renewed rise in oil prices in the 2000s has spurred a new exploration boom, and the shift away from the Middle East has resumed.

DECLINING FORTUNES

The shift will almost certainly continue over the next decade unless there is a radical improvement in the region’s political environment.

Saudi Arabia’s enormous oil and gas resources remain closed to outside companies. Sanctions have prevented any increase in oil or gas production from Iran. Syria and Iraq have become failed states where central authority has collapsed and both are convulsed by civil war.

By contrast, the shale revolution has added millions of barrels per day of extra production in the United States and Canada, and similar quantities of natural gas. Oil and gas companies are now exploring similar shale deposits around the world – including in Argentina, China and Russia.

Enormous conventional gas reserves have been developed in Australia and the industry is prospecting for more off the coast of Mozambique. Deepwater drilling is developing oil and gas off Latin America and West Africa. The industry is also prospecting in Thailand and elsewhere in Southeast Asia, as well as the South and East China Seas, East Africa and the Arctic.

With the possible exception of shale, none of these resources is as geologically attractive as the giant conventional oil and gas fields of the Middle East. But the politics of the region have become too hard, so oil and gas companies are increasingly looking elsewhere.

Advances in horizontal drilling, hydraulic fracturing, seismic surveying and deepwater drilling have opened a much broader global oil and gas resource base, giving exploration and production companies many more options.

Middle East producers, especially Saudi Arabia, will remain hugely influential in the oil market for many more years.

Saudi Arabia and its close allies the UAE and Kuwait are the only countries that routinely hold spare production capacity and therefore play a crucial role in helping to smooth out short-term fluctuations in supply and demand.

However, until the political and security situation improves, or oil prices fall, the Middle East’s relative importance as an oil and gas producer will continue its long, slow decline.

http://uk.reuters.com/article/2014/08/15/mideast-energy-kemp-idUKL6N0QL14L20140815

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Exclusive: Iraqi Kurds sell third major oil cargo, fourth heads to Croatia

Fri, Aug 15 2014

By Julia Payne and David Sheppard

LONDON (Reuters) – Iraqi Kurdistan has delivered its third major cargo of crude oil out of a Turkish port and a fourth is sailing to Croatia, showing the autonomous region is finding more buyers despite legal pressure from Baghdad and setbacks in the United States.

The Kurdish Regional Government (KRG), whose peshmerga forces are being supported by U.S. airstrikes in their battle against the radical Sunni militants of Islamic State, has been in a long constitutional fight with Baghdad over independent oil sales.

But while some shipments have been tied up by diplomatic and legal pressure from Baghdad, an increasing number are now finding buyers. Around $350 million in oil sales have been completed or are under way from shipments sent via the KRG’s new pipeline to Turkey, a Reuters analysis of satellite tracking data shows. The first vessel of pipeline crude sailed in May.

"The sales process is standardising and our order book is growing," a senior official in the Kurdistan Regional Government said when asked about the sales.

"While we are fighting a war with the Islamic State we’re also facing an economic war from Baghdad."

Baghdad has cut the KRG’s budget since January over the oil sales dispute, saying it has sole authority to export crude from the country.

One cargo of Kurdish crude aboard the United Kalavrvta tanker has been sitting off the Texas coast since late July after Baghdad asked a court to seize the vessel. The ship remains in international waters off the U.S. coast, unable to unload. The KRG is appealing against Baghdad’s request.

Another vessel carrying Kurdish crude from Turkey’s Mediterranean port of Ceyhan, the United Leadership, has been anchored off Morocco for more than two months without unloading.

But a little over two weeks ago, the 1 million barrel Suezmax Kamari tanker loaded Kurdish oil at Ceyhan before sailing to a point just under 200 km (125 miles) off the Israeli and Egyptian coasts.

Reuters AIS Live ship tracking showed the ship was fully loaded, based on its draft in the water. After turning its satellite tracking off on Aug. 1, the ship reappeared four days later sitting far higher in the water – indicating it had unloaded its cargo of disputed oil.

It was not possible to determine which port the oil had been delivered to or who the buyer was. In June a cargo of Kurdish oil that sailed from Ceyhan aboard the United Emblem Suezmax tanker was delivered into Israel after being transferred at sea to another ship. The KRG has denied selling oil to Israel "directly or indirectly".

Another cargo, again carried by the United Emblem tanker, was transferred to a second vessel off the coast of Malaysia late last month. The buyer remains unknown.

Iraqi Kurdistan has been selling small volumes of oil trucked into Turkey since 2012 but has faced fiercer opposition from Baghdad since its own pipeline to Ceyhan started at the turn of the year. It now carries around 120,000 barrels per day to the port.

The KRG has said it plans to increase oil sales to around 1 million bpd by the end of next year, which could potentially give it enough economic clout to speed a push for independence. (see attachments)

CROATIA BOUND

This week the Kamari has again loaded crude at Ceyhan, sailing to Malta where it executed a ship-to-ship transfer to a smaller vessel called the United Carrier, a shipping source familiar with the matter said and ship tracking showed.

The vessel is managed by Greece-based Marine Management Services, the same company that runs the Suezmax tankers lifting Kurdish oil.

The United Carrier is now sailing towards a port in Croatia. The Omisalj port imports oil for Croatia’s refineries, which are partly-owned by Hungary’s Mol Group, a company that has invested in oilfields in Iraqi Kurdistan. A spokeswoman for Mol Group in Hungary declined to comment.

The Croatian government, which owns the 100,000 barrel per day INA refining company jointly with Mol Group, was not available to comment on Friday – a public holiday in Croatia.

Based on international prices above $100 a barrel, total Kurdish crude sales from Ceyhan would total around $350 million, even if some tankers have been slightly discounted.

This week a senior Turkish official called on the United States to lift hurdles to the sale of crude from Iraqi Kurdistan, the Financial Times reported, saying Kurdistan was facing an enemy that was boosting its operations through oil sales.

Islamic State militants are selling oil from oilfields and refineries they control to local communities and smugglers, U.S. intelligence officials said on Thursday.

"We appreciate the Turkish line of thinking and we believe other countries should also support oil sales from Iraqi Kurdistan," the senior KRG source said.

"If they are going to trust Kurdistan to fight ISIS (the previous name of Islamic State) they should not expect us to do it with one hand tied behind our back."

On Thursday Nuri al-Maliki finally bowed to pressure and stepped down as Iraqi prime minister. There are hopes the new prime minister, Haider al-Abadi, will negotiate an oil sales agreement with the KRG, though some have cautioned he has previously backed Maliki’s stance on the issue.

The latest signs point to the KRG continuing to step up its oil sales. The United Dynamic, another Suezmax tanker managed by the same shipping firm as the other Kurdish oil vessels is also now sailing towards Ceyhan, according to Reuters AIS Live.

On Friday the United Dynamic, which is currently empty, was off the northern coast of Tunisia. It is due to dock at Ceyhan on Aug. 21.

http://www.reuters.com/article/2014/08/15/uk-iraq-security-oil-kurds-idUSKBN0GF1PY20140815

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*Massenbach’s

Recommendation*

*Have We Misunderstood the Threat from ISIS?*

RUSI Analysis, 14 Aug 2014By Professor Gareth Stansfield, Senior Associate Fellow and Director of Middle East Studies

Having sent special forces to assess the humanitarian threat from ISIS in the Sinjar Mountains, the United States now says situation was not as bad as feared. But this assessment ignores the existential threat posed by ISIS to the Middle East and beyond.

The debate concerning ISIS is certainly growing quickly. The slaughter of the Yezidis on Jabal Sinjar, the massacre of Christians in Syria then Iraq, the ruthless killing of children of these minority populations in ways that are appallingly, unbelievably, grotesque and barbaric, and what now seems to be the ritualistic hacking off of heads (‘beheading’ does not portray the gruesomeness of what tends to happen) all serves a purpose. This purpose is to bring ISIS not only to the attention of those people who they are seeking to subdue now, in the Middle East, but to the attention of those peoples who they may challenge in the future, in the West.

Should the West take this horrible posturing of ISIS seriously? Apart from the reticent US airstrikes against ISIS forces and subsequent advisory and reconnaissance missions addressing the genocide of the Yezidis in northern Iraq there is very little to suggest that Western powers view ISIS as being in any way fundamentally different to its recent and contemporary jihadi predecessors. The contents of the toolbox of Western powers in this regard is well known, with methods ranging from social engineering through to containment and muscular military targeting all being used to varying degrees in previous engagements. And, today, the same toolkit is being opened again in an attempt to stymie the advance of the so-called ‘Islamic State’. But it is questionable whether the tools are big enough for this new job.

ISIS is a different organisation in whatever way measured. It is on the verge of achieving on the ground what its name already suggests – of being a state. In this regard, only the Taliban of Afghanistan could compare; it has significant resources – indeed, more than enough to do what it needs to do in the region and beyond; and it is successful. This last point is critical – ISIS presents a narrative of success to those young and youngish Arabs and/or Sunni Muslims that feel a genuine sense of powerlessness in the modern world. Now, ISIS takes this deep rooted feeling and moulds it into a dynamic that is strong, proud, vengeful, and immensely transformative.

This point seems to have been lost on Western policy makers. Quite simply, Not only is ISIS taking the sense of impotence felt by Arabs and Sunnis and distilling it into a sense of tremendous potency, ISIS is also now on the verge of changing the very international system that maintains the status quo, and the West’s place within it. Consider the response to ISIS in Iraq today – while Obama has clearly articulated his opposition to the existence of the organisation, the response to their atrocities is still conducted within a statist framework, targeting ISIS as though it is based in Mosul and reaching out from there.

Even within the context of Iraq, this is quite wrong, with ISIS being very strong in other parts of the country, including Anbar. But the ‘Islamic State’ is much bigger than Sunni Arab Iraq – stretching all the way to Aleppo in Syria (which is now, incidentally, dangerously exposed to a new push by ISIS to secure it) and including Hassekeh and Deir az-Zur on the Syrian border with Iraq. Already, ISIS have gained an advantage over Western powers by not continuing to play by the rules of the state system, but by removing those rules when they dismantled state borders.

Why this is Not a Repeat of 2003

In effect, ISIS have exposed a great strategic illusion/miscalculation by Western powers. This is to say that the West is clinging to a traditional, statist response to a cross-border terrorist/insurgent threat from a non-state actor. This is actually a choice of the West not to recognise the expanding threat not because ‘we’ cannot see it, but because political leaders are scared to acknowledge it – scared by the still-fresh memories of the public backlash following the invasion of Iraq in 2003, and scared by the prospect of engaging in the no-win world of Middle East politics. But the situation now is different to then. ISIS is a terrorist organisation (and a spectacularly effective one) and remains border-less. But it has also acquired a substantial chunk of territory (a development which is convincing – insofar as it substantiates the idea of the caliphate – to impressionable recruits). So we have supremely violent, ideologically rampant terrorism fused with a new, border-less version of something like a modern state. This is a new development and one that seems to be studiously, and perilously, ignored.

It is not possible to defeat ISIS by attacking their forward-placed troops on the Great Zab river as they look east towards Erbil: the ‘state’ itself would have to be targeted at its points of concentration – Mosul, Fallujah, Raqqa, Hassekeh – if the challenge of ISIS is to be met. If one were to be privy to ISIS strategy meetings around Ibrahim al-Baghdadi and his policy team in Raqqa, (and, unlike everyone else, they have articulated their vision, they do seem to have a strategy, and they certainly have policies) one would probably see a plan that sees ISIS grow in the Middle East through a combination of pushing the message of their success and thus seeing recruitment grow and neighbouring states undermined. It would be combined with an aggressive policy of territorial expansion, with Lebanon and Jordan both being prime targets. Indeed, the black flag of ISIS has already been raised in these countries.

ISIS therefore do not play by the rules of the game that still underpin much of the West’s responses to such challenges. They are making a new rule book – one that combines the most modern approaches of strategic planning, media messaging, psychological warfare, and counter-insurgency (consider how they have shut down opposition among their close partners/potential threats and implemented their own version of identifying those who could be ‘reconciled’, and those who are ‘irreconcilables’ – a technique perfected by the US in Iraq in 2007-8), with the most brutal, inhuman techniques of control imaginable. Their methods then see the organisation grow either because some followers are genuinely impressed by what is seem to be a strong organisation for once being able to stand up for them, or because some are simply too fearful of the consequences of not being in the biggest and nastiest gang around.

As their plan has unfolded, ISIS have brought two thresholds forward – one is their own advance and the reformation of realities on the ground on the Middle East; the second is the reaction of Western populations and the pressure they could bring to bear on their governments to take actions to roll back ISIS.

The question to ask now is simply which threshold will be passed first? Will ISIS succeed and strengthen the so-called Caliphate so it can no longer be dismissed as the fantasy of a self-proclaimed leader on a remarkably lucky streak, or will the international community recognise the threat of ISIS as being an actor with real agency and with aspirations that are absolutely antagonistic not only to Western interests, but to allies in the Middle East, and stop them? Neither prospect is palatable, but then neither, it seems, is muddling through and banally hoping for the best.


The views expressed here are the author’s own and do not necessarily reflect those of RUSI.

https://www.rusi.org/analysis/commentary/ref:C53ECAE6866DA5/#.U-zG9lh012G

“USA Today: To fight ISIS, make peace with Syria’s Assad: Column *

The U.S. must move quickly to contain self-proclaimed caliphate before it conquers more of the Middle East

by William Young, RAND

Abu Bakr al-Baghdadi, the self-proclaimed caliph of the Islamic State, has said in his speeches that he recognizes no borders. In light of his actions over the past two months and the recent incursions into Arsal in Lebanon and Sinjar in Northern Iraq, the United States should take him at his word and plan accordingly.

Al-Baghdadi’s ambitions in the region seem limitless: expansion to the east and north through Iraq and Kurdish areas, west into Lebanon and Jordan, and south into the Arab Gulf. Saudi Arabia, however, contains what he wants most: control of the holy sites in Mecca and Medina, and control of the kingdom’s oil.

This week, President Obama authorized limited airstrikes against targets in Iraq and the first attacks came Friday near the Kurdish capital of Irbil. Now U.S. advisers are headed to the region. But there are other things the United States could be doing to contain the Islamic State.

No Arab country acting alone or in unison with others in the region is likely to intervene to disrupt these plans. Iran may be able to slow the Islamic State’s aspirations somewhere south and east of Baghdad, but Iraqi forces have already shown that they lack the commitment and firepower to be able to stand their ground against the onslaught, which continues to close in on the capital.

USATODAY

Kirsten Powers: Obama’s inattention to Iraqi Christians

The Lebanese Armed Forces with the help of Hezbollah might be able to make a stand along the Syrian border. The discipline of Jordanian forces is also likely to pose a serious obstacle to the expansion of the caliphate into Jordan. In the end, however, the real challenge to both the Lebanese and Jordanians will be in fighting the internal threat as the Islamic State gains adherents through its messaging campaign and capable administration of the territories it seizes.

Operating from his capital in Raqqah, Syria, al-Baghdadi is working hard to win the hearts and minds of the Sunnis in the region by keeping the electricity on and attempting to show that his governors are not corrupt. His military and political actions so far show that he not only thinks strategically about war, but that he is intent on properly administrating and otherwise actually governing the areas that have fallen under his control. These actions appeal to many people who have grown tired of government corruption and years of war.

The United States and its allies in Europe and the Middle East should consider steps now to counter the Islamic State’s expansion before it more seriously threatens traditional political, social, and economic relationships in the region, and rewrites Islam for the majority of the Muslims in the world.

To disrupt al-Baghdadi’s advance, the United States and its allies should start by addressing the source of the problem — the conflict in Syria. They can begin by negotiating a truce with President Bashar Assad to stop the fighting in Syria. At the same time, an international stabilization force should be mobilized to create humanitarian safe zones in Syria so humanitarian aid can be delivered. This force, made up of NATO and Arab forces, could also be instrumental in taking back territory lost to the Islamic State, and in countering the spread of jihadist influence by the Jabhat al-Nusra front and its al-Qaeda affiliates. This will show the people of the region that al-Baghdadi’s new Islamic State is not invincible and that it does not speak for the majority of other Muslims in the region or beyond. Assad might accept such an arrangement because it would allow him to retain power over at least a portion of Syria.

The United States and it allies also should provide direct military support to the Lebanese, Jordanians, and Arab Gulf states, ensuring that any further attempts at expansion of the Islamic State will meet stiff resistance. The Iraqis and Kurds too should continue to be given assistance to support efforts to contain the Islamic State in the northern part of the country. Iran will defend itself and will fight to preserve Shia areas of Iraq and the holy cities of Karbala and Najaf from encroachment by the Islamic State.

Finally, a messaging campaign should be created that counters al-Baghdadi’s efforts to sow discord between Sunni and Shia and that focuses on the threat al-Baghdadi poses to Islam in general and to the holy sites in Mecca, Medina, Karbala and Najaf. An end to the fighting in Syria will help accomplish some of this new messaging. It also will help curb the increasing radicalization of youth in the region and thereby prevent new jihadists from joining the battle on both sides. In a coordinated effort, the Saudis and others in the region will be able to help turn the propaganda tide back against al-Baghdadi and his allies.

The creation of an international stabilization force and serious defense assistance to allies and neighboring states in the region will serve to contain al-Baghdadi’s aspirations. It is always possible that his new Islamic State may overextend itself and collapse under its own weight, a possibility that would only be hastened by an alliance aimed at isolating it. But it is too dangerous to wait and see. Al Baghdadi’s ambitions at the moment threaten the stability of U.S. allies in the region, as well as the prospects for the development and spread of democracy, and ultimately the free trade and supply of oil from the Arab Gulf. It makes no sense to continue waiting to see what happens next — nothing good awaits.

William Young is a senior policy analyst at RAND Corporation.

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· Iran-Saudi tangle over Iraq’s transition *

The statement by Iran’s Supreme Leader Ayatollah Ali Khamenei on Wednesday endorsing the nomination of Haider al-Abadi as Iraq’s next prime minister puts the seal on Tehran’s backing for the political transition in Baghdad. It virtually seals the fate of incumbent PM Nouri al-Maliki, whose ship has run aground after a decade-long voyage.

Equally, Saudi Arabia has welcomed al-Abadi’s nomination. King Abdullah sent a congratulatory message wishing him success in his endeavors to “res-establish cohesion among Iraq’s people and preserve the unity and stability of Iraq”, hoping that Under the new leadership Iraq will “regain its rightful place in the Arab world and the Muslim world.”

It is a cautious Saudi welcome, because as the editor-in-chief of the Saudi establishment daily Asharq al-Awsat sardonically wrote, while it is doubtless a good thing that al-Maliki is being ousted, it is far from clear whether he is being replaced by yet another al-Maliki.

A profile of al-Abadi featured in the daily, here, also suggests that Riyadh is keeping its fingers crossed — ” Abadi is a longtime ally of Maliki, the man whose position he is now seeking to usurp… Abadi’s nomination… has received broad local, regional and international support, though Iraq’s Sunnis remain wary…

Saudi Arabia is figuring out Tehran’s motivations in withdrawing its support for al-Maliki. A commentary in Al-Arabiya, here, comes to the estimation that Iran had varied objectives here and the principal one would have been that it was “a pro-Western strategy, specifically in favor of the US current foreign policy towards the Iraqi crisis, sectarian conflict and civil war.”

It added that nonetheless, “Iran’s decision to turn its back on Maliki is distinct from those of Western ones.” For sure, this was an agonizing decision for Tehran, as borne out by the detailed attention that Khamenei gave in his speech in Tehran yesterday (where he expressed support for al-Abadi) to defining the political and strategic parameters of Iran’s present engagement with the US. Khamenei noted that there is more than one point of view in this regard within the Iranian establishment.

Reading between the lines of the available excerpts of Khamenei’s speech, which is an extraordinarily nuanced one meant for a gathering of top Iranian diplomats, it appears that he did acknowledge that outside of Iran’s nuclear talks with the US, Tehran has negotiated with the Americans on certain “very specific cases.”

In a roundabout way, he also hinted that if only there is a change in the US’ overall attitudes toward Iran, the scope of the engagement with the US could be broadened. Khamenei framed that difficult thought in a very Persian way like this: “As long as the status quo, that is to say, the US animosity and the hostile statements of the US administration and Congress on Iran continue, [Tehran’s] interaction with them will be unjustified.”

In sum, the ball is in Obama’s court. Of course, Obama faces an acute dilemma as to how far to walk into the night in Mesopotamia holding the Iranian hand. And, this is precisely what explains the angst in the Saudi mind. To be sure, Iraq is becoming a fascinating theatre where the raging Middle Eastern storms are converging.

Tehran hopes that the military intervention in Iraq would compel the Obama administration to take a call, finally, on the extremist islamist groups operating in Iraq and the surrounding region as a whole, which indeed would have ramifications impacting regional politics and regional security as a whole, apart from bringing Iran and the US on the same page as ‘natural allies’.

Saudi Arabia, on the contrary, would hope that the congruence of interests in Iraq at the moment between Iran on the one hand and the US and UK on the other remains a limited one and does not lead to a broader realignment in their mutual relationship. Britain, by the way, is reopening its embassy in Tehran.

*The Real Middle East Crisis Is Economic *

Michael Singh -Also available in New York Times August 19, 2014

It would be naive to think that economic growth will solve all of the Middle East’s thorny dilemmas; but it would be equally naive to believe that they can be solved without it.

President Obama surprised many recently when he diagnosed the crisis gripping Iraq as partly an economic one, noting that Iraqi Sunnis were "detached from the global economy" and thus frustrated in achieving their aspirations. While Iraq’s chaos has many sources, the president is nevertheless on to something; and it’s not just Iraqi Sunnis, but the entire Middle East that is detached from the global economy.

The region accounts for just over 4 percent of global imports, less than it did in 1983; Germany alone accounts for 6.4 percent. Its economic stagnation is vividly illustrated by a comparison to Asian economies. According to the World Bank, in 1965, Egypt’s per-capita gross domestic product was $406, while China’s was merely $110.

Today (using constant dollars), Egypt’s G.D.P. has increased four-fold to $1,566, whereas China’s has increased thirty-fold to $3,583. Similarly, Iran and South Korea had roughly the same per-capita G.D.P. in 1965; now South Korea’s is $24,000, whereas Iran’s is only $3,000.

The economies of the Middle East are not only detached from the world’s, but from one another. Most exports in North America, Europe and Asia remain within those regions. Two-thirds of exports to Europe are also from Europe. In the Middle East, only 16 percent of exports to the region as a whole are from other Middle Eastern states.

While Western observers focus on political issues in the Middle East, people in the region are themselves preoccupied with economic matters. According to a recent poll, residents of the Gaza Strip overwhelmingly desire calm with Israel and the chance to seek jobs there. In another poll, Iranians listed "expanding employment opportunities" as their top political priority, far higher than "continuing our nuclear enrichment program."

But while Gazans hope for an end to their blockade, and Iranians for an end to sanctions, neither step would provide a silver bullet. Economic malaise is endemic to the region, even in places not suffering from blockades or sanctions.

This should concern Western policy makers. The distinction between economic and political problems is false. Like anywhere, economics and politics are inextricably linked. And economic progress is the key to easing the chronic instability that threatens American interests in the region.

Among oil importers, bloated public sectors are at the heart of socioeconomic woes. In places like Egypt, where the public sector employs around 30 percent of workers, post-revolution governments in search of quick economic fixes have further increased the public work force and salaries. Generous government subsidies, particularly on fuel, encourage overconsumption and favor inefficient, energy-intensive industries. Together with the large public-sector wage bills, these subsidies strain government finances, resulting in deficits, which increase the cost of credit.

These policies, together with obstacles to doing business, inhibit the sort of private-sector activity that would boost growth and employment. Across the region, unemployment — especially among youth — is in many cases higher than it was at the outbreak of the Arab uprisings, and economic growth is too slow to reverse the trend.

These problems aren’t limited to the oil importers. The International Monetary Fund has warned that oil exporters‘ years of massive surpluses are nearing an end, as a result of heavy spending and growing populations. This makes them increasingly vulnerable to a decrease in oil prices, which looks increasingly likely as new sources come online internationally.

These economic problems can be fixed, however. In contrast to the region’s political dilemmas — which often seem intractable — not only is the West able to help, but regional leaders are open to receiving help. Jordan offers an example: Amid the chaos of the Arab uprisings, Amman quietly implemented tough reforms with the assistance of the United States and the I.M.F.

Oil importers need to replace costly fuel subsidies with targeted assistance to the poor and the creation of social safety nets. They also need to ease their dependency on external aid, reduce corruption, and make regulatory changes to encourage private-sector growth. Exporters need to reduce spending and diversify their economies. And both need to shrink their public sectors and modernize their educational systems.

The United States and its allies should not only provide advice in overcoming these challenges but also incentivize regional governments to take it. That means working with regional allies that are seeking to diversify and modernize their economies, and coordinating economic aid and tying it to progress on reform, including the political steps necessary to make reforms successful.

America should also promote greater economic integration by cooperating with wealthy oil producers to invest in the prosperity of their poorer neighbors, and by offering Middle Eastern states better access to Western markets, especially the European Union.

Exhortations for the United States to "do more" overseas are often criticized as veiled calls for the use of military force. But integrating economic statecraft into diplomacy would help broaden America’s international role beyond the security sphere in a way that promotes long-term peace and stability.

It would be naive to think that economic growth will solve all of the Middle East’s thorny dilemmas; but it would be equally naive to believe that they can be solved without it.

Michael Singh is managing director of The Washington Institute.

http://www.washingtoninstitute.org/policy-analysis/view/the-real-middle-east-crisis-is-economic

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