Sunni and Shia will probably wage on-again off-again war until the end of time, but the Iran-Saudi deal looks like the start of a substantial off-again period. From F.M. Shakil at thecradle.co:
The Beijing-brokered rapprochement between Tehran and Riyadh is expected to have significant implications for peace and prosperity in and around West Asia, given the considerable influence the two nations wield in the region.
Photo Credit: The Cradle
The China-mediated Saudi-Iran peace agreement, inked on 10 March in Beijing, marks a significant geopolitical shift with far-reaching implications for the Persian Gulf and Iran’s neighboring countries. For decades, Saudi Arabia and Iran have been engaged in ideological and economic competition on the territories of their neighbors, causing regional tensions to escalate.
If the agreement is successful and relations between Riyadh and Tehran improve as envisioned, tensions will likely begin to significantly subside in the Persian Gulf, Levant, and further afield in neighboring Pakistan and Afghanistan. The former, long concerned about its security and energy supply vulnerabilities, will potentially benefit from improved relations between Saudi Arabia and Iran, which could help address its oil and gas crises.
Similarly, Afghanistan, whose Taliban-led government is still struggling to gain international recognition and is in dire need of reconstruction and investment initiatives, may also benefit from the kingdom’s rapprochement with the Islamic Republic.
Persian Gulf States
An early litmus test for the Saudi-Iranian reconciliation will be its impact on Lebanon, Iraq, Syria, and Yemen, where a perceived proxy war has wreaked havoc on their respective economies and in their public spheres.
Saudi Arabia will use the agreement as a wedge in its dealing with the U.S. From Ted Snider at libertarianinstitute.org:
Until it happened, it was unthinkable. The United States has for decades guarded its role as the sole negotiator in the Middle East. It has insisted on being the chief arbiter of agreements and the architect and decider of partnerships. But on March 10, China emerged as the broker of a transformative agreement between Iran and Saudi Arabia while Washington was sidelined and left out of the room. The most important recent realignment of the Middle East was shaped by Beijing.
The story is so critical that it is too big to be contained in one story. It is two stories: the shifting of regional alignments and the shifting of global alignments.
Iran and Saudi Arabia have been exploring improving relations for the past few years. The feelers began with talks in 2020 and grew into several meetings in Iraq and Oman. In 2021, the two announced that Iran had resumed exports to Saudi Arabia, and Iran broached the idea of reopening consulates in each other’s countries and re-establishing diplomatic ties.
Both the Iranian and Saudi statements following their new agreement acknowledged those talks and thanked Iraq and Oman for their efforts and for hosting them. But it was China that brought them to the table, enabled the breakthrough and accomplished the agreement. “The two sides,” the Saudi statement said, “expressed their appreciation and gratitude to the leadership and government of the People’s Republic of China for hosting and sponsoring the talks, and the efforts it placed towards its success.” Iran’s statement expressed similar gratitude.
It looks like Israel and the U.S. are not going to have the run of the Middle East. From Grant Smith at automaticearth.com:
On Thursday the New York Times ran yet another report about Saudi Arabia’s entry into an “Abraham Accord,” but if only certain conditions could be met. It quoted longtime Israel lobby heavyweight Martin Indyk and reported on the American Israel Public Affairs Committee’s think tank the Washington Institute for Near East Policy “expert” delegation’s visit to Riyadh to finalize a deal. Then on Friday explosive news broke that China had successfully concluded a secret peace agreement between Iran and Saudi Arabia.
The plan aims to restore diplomatic relations by reopening embassies within two months. They also agree to restart their April 2001 Security Cooperation. Also back on the front burner is a 1998 General Agreement covering economic, trade, investment, technology, science, culture, sports and youth ties. It is well worth reading the entire statement.
As it often does, the New York Times quickly updated its March 9 story in an attempt not to look foolish having given too much credence to Israel lobby guidance.
Israel and its lobby have for decades attempted to steer the United States into attacking Iran. The neocon policy coup of 2001 was not only a plan to get the U.S. to attack Israel’s arch enemy Iraq, it was also designed to steer the US into attacking seven countries in seven years, most prominently Iran.
When the US invasion of Iraq quickly turned into a quagmire, two American Israel Public Affairs Committee executives tried to place stolen classified Department of Defense information incriminating to Iran into circulation at the Washington Post. The operation failed, the Pentagon colonel leaking classified information was prosecuted, while the longtime AIPAC officials were dismissed.
America is reaping what it has sown. From Ron Unz at unz.com:
On Friday geopolitical plates of tectonic scale may have visibly shifted as Iran and Saudi Arabia, two of the most important countries in the Middle East and erstwhile bitter adversaries, announced that they had reestablished diplomatic relations after a lengthy round of negotiations held with top Chinese officials in Beijing.
Though sometimes stressed during the 1973 Oil Embargo and in the aftermath of the 9/11 Attacks, the relationship remained our most important in the Arab World, being responsible for the rise of the Petrodollar and the maintenance of our own greenback as the world’s reserve currency. With America’s industrial base having been reduced to a mere shadow of its once global dominance and our country plagued by horrendous annual budget deficits and accumulated debt, much of our national prosperity and current standard of living probably today depends upon that maintaining that status.
Meanwhile, during the four decades since its 1979 Islamic Revolution, no country in the region has been a greater object of American hostility than Iran. As recently as January 2020, we assassinated Gen. Qasem Soleimani, Iran’s greatest military commander, who had been considered a likely presidential candidate in their 2021 elections.
It looks the U.S.’s dominant power in the Middle East has reached its sell-by date. From As`ad AbuKhalil at consortium news.com:
The U.S. does not want to experience what Britain experienced in Suez in 1956: a watershed moment signaling its global decline.
Smoke rises from oil tanks beside the Suez Canal hit during the initial Anglo-French assault on Port Said, Nov. 5, 1956. (Fleet Air Arm, Imperial War Museums, Wikimedia Commons)
The announcement in China on Friday of the resumption of relations between Saudi Arabia and Iran (after a 7-year freeze) caused a stir in Washington with U.S. mainstream media underlining the rise of China’s diplomatic role in the region at the expense of the U.S.
The U.S. has consistently aborted diplomatic initiatives of its allies and adversaries alike. China, on the other hand, emphasized that the cornerstone of its policies in the region is peace and diplomatic relations, in clear contrast to U.S. and Western roles in launching wars and instigating conflict.
Iran has been calling for the normalization of relations with Saudi Arabia for a few years, but Saudi Arabia snubbed all those initiatives. The Saudi government has been trying to win a brutal war in Yemen, which basically, and paradoxically, brought Iran closer to the Saudi border by virtue of Houthi reliance on Iranian assistance in the face of Saudi savagery.
The Iraqi government (through its Shiite component) has been mediating between Saudi Arabia and Iran for a few years. The Shiite political groupings in Iraq are fully aware that a rapprochement between the two countries would reflect favorably on the relations between Sunni and Shiite political grouping in the country.
Archrivals Iran and Saudi Arabia agreed Friday to restore diplomatic relations, a dramatic breakthrough brokered by China after years of soaring tensions between the regional rivals.
The deal, which will see the two countries reopen embassies in each other’s capitals, was sealed during a meeting in China — a boost to Beijing’s efforts to rival the United States as a broker on the global stage.
The agreement also may put a dampener Israel’s ongoing efforts to normalize relations with its Arab neighbors.
The talks were held because of a “shared desire to resolve the disagreements between them through dialogue and diplomacy, and in light of their brotherly ties,” according to a joint communique from Tehran, Riyadh and Beijing that was published by the Saudi Press Agency, the country’s official news agency.
The agreement followed intensive negotiations between Ali Shamkhani, a close adviser to Iran’s supreme leader Ayatollah Ali Khameni, and Saudi Arabia’s Minister of State Musaad bin Mohammed Al-Aiban, according to the statement.
It added that the foreign ministers from both countries would “meet to implement this, arrange for the return of their ambassadors, and discuss means of enhancing bilateral relations.”
The Chinese-brokered diplomatic deal between Saudi Arabia and Iran not only opens the way for resolution of region-wide conflicts, but foils U.S. Mideast designs based on Saudi-Iranian enmity, writes Joe Lauria.
King Salman greets Chinese President Xi Jinping. (Chinese Foreign Ministry)
Ever since the 1979 Islamic Revolution that overthrew the U.S.-allied Shah of Iran, the rivalry between the two major Middle East powers — Iran and Saudi Arabia — has been at the heart of every conflict across the region.
The announcement on Friday that Iran and Saudi Arabia have normalized relations could have a seismic effect on all these conflicts and leave the U.S. on the outside looking in.
In Lebanon, Iranian-backed Hezbollah and Saudi-backed parties might begin to resolve their differences, a unity that would worry Israel and lessen U.S. influence in the country.
In Syria, Hezbollah and Iranian militias have been battling Saudi-backed jihadists for more than a decade. The Syrian war could now come to an end.
In Yemen, U.S.-backed Saudis have been fighting the Houthi, who have been driven into a closer alliance with Iran. Obstacles to a peace deal could now have been removed.
In Iraq, reconciliation between Sunni and Shia could make the U.S. presence and influence irrelevant and unwelcomed by all sides.
In Bahrain, Iranian-backed Shi’ites no longer in conflict with the Saudi-aligned monarchy could sideline the presence of the U.S. Fifth Fleet in a region on the mend.
And in Saudi Arabia itself, the state’s tensions with Shi’tes in the eastern oil regions should lessen.
Saudi Arabia’s move away from the petrodollar is yet another sign of the U.S. government’s diminishing influence and power. From Ryan McMaken at mises.org:
On January 17, the Saudi minister of finance, Mohammed Al-Jadaan, announced that the Saudi state is open to selling oil in currencies other than the dollar. “There are no issues with discussing how we settle our trade arrangements, whether it is in the US dollar, whether it is the euro, whether it is the Saudi riyal,” Al-Jadaan told Bloomberg TV.
If the Saudi regime does indeed embrace substantial trade in currencies other than the dollar as part of its oil-export business, this would signal a shift away from the dollar as the dominant currency in global oil payments. Or measured another way, this would signal the end of the so-called petrodollar.
Will a shift away from the dollar in the global oil trade really lead to a big relative decline in the dollar? Probably and eventually. But a number of other dominoes would need to fall first, most especially the domino we call “Eurodollars.”
On the other hand, it would be foolish to simply dismiss the potential end of the Saudi preference for the dollar with hand-waving. The end of the petrodollar would indeed weaken the dollar, even if this would not be a mortal blow in itself. Moreover, it is especially foolhardy to ignore the status of the petrodollar because that status also has geopolitical implications. Saudi comments on the dollar signal that the Saudis no longer consider its alliance with the United States to be as important as it has been since the 1970s. What’s not an immediate economic problem for the US regime or the dollar may nonetheless be an immediate geopolitical problem.
The Russians have a not-so-secret weapon that would devastate the U.S.: back the ruble with gold. From Alasdair Macleod at goldmoney.com:
We have confirmation from the highest sources that Russia and the Shanghai Cooperation Organisation (SCO) are considering using gold for pan-Asian trade settlements, fully replacing dollars and euros.
In an article written for Vedomosti, a Moscow-based Russian newspaper published on 27 December, Sergey Glazyev, a prominent economic adviser to Vladimir Putin who is heading up the Eurasian Economic Union committee charged with devising a replacement for dollars in trade settlements sent a very clear signal to that effect. It appears he will drop earlier plans to design a new commodity-linked trade currency because it has been superseded.
Furthermore, increasing numbers of nations have joined or have applied to join the SCO as dialog members, including Saudi Arabia and other important Gulf Cooperation Organisation members. The economic benefits of discounted energy, China’s investment capital, and sound money are the ingredients for a new, Asia-wide industrial revolution, while the economies of the western alliance sink under rising prices, rising interest rates, collapsing financial markets, and collapsing currencies.
While it will mark the end of the road for the western alliance and its fiat currencies, Putin must be careful not to take the blame. Now that the alliance is racking up tanks and other equipment for the Ukrainians, they are actively promoting a new battle, with NATO getting almost directly involved. It is that action which will drive up commodity prices, undermine western financial markets, undermine government finances, and ultimately collapse their currencies.
Putin is likely to use NATO’s impetuous action in defence of Ukraine as cover for securing Russia’s future as an Asian superstate, which will be the west’s undoing.
We forget, perhaps, that from 1 March 1950 the Soviet rouble was on a gold standard at 4 roubles 45 kopecks for 1 gram of pure gold until 1961, when Khrushchev devalued it and refixed it to the dollar. Stalin had been a signatory to the Bretton Woods agreement but refused to join it and make the rouble subservient to the dollar as its intermediary for a gold standard.
More and more countries are signalling that they no longer want to trade real commodities, particularly oil, for pieces of paper or computer entries. From Brandon Smith at alt-market.com:
The decline of a currency’s world reserve status is often a long process rife with denials. There are numerous economic “experts” out there that have been dismissing any and all warnings of dollar collapse for years. They just don’t get it, or they don’t want to get it. The idea that the US currency could ever be dethroned as the defacto global trade mechanism is impossible in their minds.
One of the key pillars keeping the dollar in place as the world reserve is its petro-status, and this factor is often held up as the reason why the Greenback cannot fail. The other argument is that the dollar is backed by the full force of the US military, and the US military is backed by the US Treasury and the Federal Reserve – In other words, the dollar is backed by…the dollar; it’s a very circular and naive position.
These sentiments are not only pervasive among mainstream economists, they are also all over the place within the alternative media. I suspect the main hang-up for liberty movement analysts is the notion that the globalist establishment would ever allow the dollar or the US economy to fail. Isn’t the dollar system their “golden goose”?
The answer is no, it is NOT their golden goose. The dollar is just another stepping stone towards their goal of a one-world economy and a one-world currency. They have killed the world reserve status of other currencies in the past, why wouldn’t they do the same to the dollar?
Globalist white papers and essays specifically outline the need for a diminished role for the US currency as well as a decline in the American economy in order to make way for Central Bank Digital Currencies (CBDCs) and a new global currency system controlled by the IMF. I warned about this years go, and my position has always been that the derailment of the dollar would likely start with the end of its petro status.
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