In the current Iranian economic and political system there are many old and new geopolitical and economic tensions.
At a time when many countries, including China, but not the United States, are adopting the criteria of the Paris Climate Agreement – signed, however, by 196 countries – it is obvious that oil will see its economic and technological importance decrease, while the role of alternative energy resources and, above all, natural gas will increase.
This is the first aspect to be studied: Saudi Arabia does not possess significant reserves of natural gas which, however, is much more “environmental-friendly” than oil, while Iran and Qatar have plenty of it.
Incidentally, the two countries which were accused of “sponsoring terrorism” during the meeting gathering 13 countries in Riyadh in May 2017 to establish the “Sunni Arab NATO” – a meeting where President Trump-led America which, however, is supposed to have some intelligence, had to say only yes.
This is exactly the reason why Saudi Arabia wants to immediately double its gas production up to 23 million cubic feet per day, while the country is also thinking about an OPEC oil reduction of 1.8 million barrels per day until the end of 2018.
This situation has nothing to do with the situation prevailing in the Islamic Republic of Iran, which has 18% of all natural gas reserves in the world, the second in size after the Russian Federation’s.
Another political problem in the use of natural gas, as can be easily imagined.
Conversely, Qatar has “only” 14% of global natural gas reserves, the third largest region in the world in terms of oil and gas.
This is the reason why, for example, the issue of renewables is at the core of Vision 2030, the great Saudi reform project.
Saudi Arabia still ranks sixth in terms of natural gas reserves, and the new leader of the Saudi Kingdom, Mohammed bin Salman, wants to expand gas extraction in the country by approximately 4% or at most 6% on a yearly basis – with savings currently estimated at 71 US dollars for each oil barrel “replaced” by an equivalent amount of gas for the same energy production.
Hence the Saudi natural gas is mainly used at domestic level so as to avoid the energy additional cost of using national oil, which must be sold in huge quantities, while for Iran and Qatar gas is the only great economic and geopolitical opportunity of the future.
Moreover, Prince Muhammad wants to increase the production of solar energy, again to be sold to Europe, considering the obvious difference in sun exposure of Saudi lands compared to the European ones.
Hence new formulas for exporting oil and gas require different strategic configurations compared to the current ones, which arise from the now old invention of petrodollars after the Yom Kippur War but, above all, are unavoidable after the transformation of power potentials within the OPEC system.
Even today Iran often sells oil barrels in euros – Saddam Hussein’s original sin.
New energy routes to be established and defended towards Western markets and hence new distribution of satellite or enemy countries in the very long passage from the origin of energy sources up to European end consumers.
Also the United States relies on said consumers. I am afraid that, in the near future, it will try to sell us its shale oil and gas.
This explains the “materialistic” root of the Iran-Saudi Arabia tension in Yemen for the Shi’ite and Zaydist rebels of the Fifth Imam, the Houthis – officially called Ansar Allah – who should be supported by Iran, Eritrea and other Iran’s friendly countries.
Who controls Yemen controls the Suez Canal.
On the contrary, Saudi Arabia is helped there – although softly – by the United States and the United Kingdom.
I have not yet well understood the reason why the United States and Great Britain have long put all their eggs in the Saudi basket, thus relinquishing a more balanced action for hegemony over the Greater Middle East.
Obviously Mohammed Bin Salman still wants to sell significant shares of ARAMCO – the state-owned Saudi oil company – to major foreign investors and later diversify the Saudi economy.
The deal of the century for many US investment bankers.
The Saudi Prince has also planned to spend tens of billion US dollars on US armaments, mainly to support the Saudi invasion of Yemen and, again, to fight the Houthis, who inflicted heavy losses on Saudi Arabia itself and finally to strengthen the strategic friendly relationship with the United States, the primary axis of Saudi Arabia also after Mohammed Bin Salman’s “purges”.
Therefore, if Iran’s economic potential is released, the strategic potentials inside the Greater Middle East and relating to the link between Shi’ites and Sunnis are placed on an equal footing and, indeed, change in favour of Iran.
This is the real problem underlying the “reform” or the termination of the Joint Comprehensive Plan of Action on Iran’s nuclear program, signed on July 14, 2015 between the P5 + 1 (China, France, Russia, United Kingdom and the United States, plus Germany) and later by the EU and the Shi’ite Republic of Iran.
Furthermore, obviously the post-1979/1981 sanctions against Iran had already seriously harmed Iran’s economy, which began to recover after 2015.
At the time, the cost of international sanctions for the Shi’ite Republic had been calculated at 100 million US dollars per day.
Pursuant to the JCPOA agreements, 1.3 billion US dollars have so far been returned to Iran for interest on frozen assets, while approximately 53.8 million dollars of “frozen” funds have not yet been returned to their legitimate owners.
The United States is keeping on indicating Iran’s personae non gratae.
There are still other unresolved issues between Iran and the United States – many years after signing the JCPOA – but, as always happens in these cases, negotiations are very complex.
Iran has many advantages over Saudi Arabia: it has a more developed and diversified industrial structure; a lower fertility rate, as well as a less exploited oil production – and this precisely because of sanctions.
Nevertheless, for the time being Iran and the Caspian gas-producing countries can meet the energy demands of two major global players, namely Europe and China.
Both regions signed the Paris Climate Agreement.
Furthermore, within three years, Iran will have 24.6 billion cubic meters of gas available for being transferred to the pipelines, which can be calculated in addition to the current level of Iranian gas sales to both Europe and China.
What is the connection between this new Iranian geo-energy system and the probable US withdrawal from the JCPOA?
Let us consider the most important data: pursuant to the agreement, the IAEA can check every phase of the process for enriching Iranian uranium and plutonium – to an extent never experienced before in such international agreements.
Iran, however, must explain to the IAEA the relationship existing between the reprocessing of its uranium-plutonium and the probable military applications.
Again controlled by the IAEA, Iran shall certify it does no longer produce High-Enriched Uranium (HEU) or maintain reserves of such material. Furthermore, Iran must convert its heavy-water reactors (HWR) into research centres that can no longer produce plutonium suitable for nuclear weapons, under penalty of termination of the Treaty.
This is still enshrined in the JCPOA and in the IAEA’s practice.
Hence, since July 2015, the International Atomic Energy Agency based in Vienna has been monitoring every phase of the Iranian fuel cycle.
Nevertheless, the strictly military aspects of the Iranian nuclear system are not explicitly dealt with by the P5 + 1 agreement of 2015, but have been tackled in a separate document signed by both Iran and the IAEA, which defines a mechanism through which Iran replies directly to the questions put by the IAEA.
Iran, however, has currently no interest in manipulating or rejecting the 2015 agreement. Nevertheless, it is equally evident that the JCPOA has so far had no noticeable effects on the transformation of the Iranian support to Assad in Syria; to the Houthis in Yemen, who were initially attacked by Saudi Arabia, and to Iran’s operations on Saudi Arabia’s peripheral interests in the Middle East.
In short, the JCPOA works well in itself, but it is not politically useful to influence and condition Iran.
The agreement that President Trump wants to reject alone, possibly in contrast with his European allies, technically counteracts both ways through which nuclear weapons can be achieved, namely enriched uranium and plutonium.
However, with specific reference to uranium, pursuant to the P5 + 1 agreement, Iran must remove all the IR-2 centrifuges – developed from an old and now inefficient Pakistani model – and must also make the IAEA monitor the most modern IR-4 ones. According to the IAEA agreements and checks, they are fewer than thirty.
In the agreement already signed, it is also clear that for 15 years Iran cannot enrich uranium over 3.76% – a level that is very different from the previous 20%.
25 kilos of 20%-enriched uranium are needed to make a nuclear weapon.
Before signing the JCPOA, however, Iran possessed as many as 10,000 kilos of low-enriched uranium, which were enough to make ten nuclear weapons if the material had been further enriched.
With specific reference to plutonium, again pursuant to the P5 + 1 agreement, Iran accepts to immediately stop the construction of the Arak reactor and later turn it into a “normal” heavy-water reactor.
In 2016 Iran even made the Arak system unusable, by cementing the internal pipes.
In accordance with the JCPOA, the IAEA can carry out very intrusive checks.
The Vienna-based Agency can have free access to all Iranian nuclear facilities for the next 20 years.
An arbitration is also envisaged if the IAEA and the Iranian government disagreed with checking a site deemed “suspicious” by the Agency.
The arbitration time is approximately one month, but it is enough to check whether activities not permitted by the agreement have been carried out in that site.
However, every nuclear processing, operation and activity, even the hidden ones, leaves signs and traces that are very evident for the IAEA.
Furthermore, if Iran decided to organize a new production line of nuclear weapons on its own, it should at first build a new series of reactors and centrifuges, by using the scarce uranium it could find both internally and in covert international trade.
Nothing could be easier to discover.
Certainly the JCPOA lacks the immediate and selective procedures to carry out checks, where needed, without limits from the Iranian government but, once again, any deviation from the rule would be easily and quickly discovered by both the IAEA and any intelligence service operating on site.
With regard to the above stated matter of sanctions, it is worth recalling that Europe lifted its sanctions, including the 2012 oil embargo, on the day when the Treaty was signed.
Other sanctions were lifted by the European Union on trade in precious materials and gold, as well as on shipping and insurance.
As already mentioned, after signing the Treaty, the United States lifted sanctions on the Iranian funds frozen in their banks and on the financial assets of the Shi’ite Republic, as well as on part of the oil ones.
Nevertheless, currently President Trump does not want to maintain the agreement reached with Iran in 2015, unless it includes “expanded” safeguards.
Is it a way to favour Saudi Arabia unilaterally? Why? What does the United States get for it? Would it be more useful than a peaceful Iran entering the world market and, consequently, also abandoning dangerous anti-Semitic and anti-Israeli positions?
The US President essentially wants in-depth international inspections for Iran’s specifically military facilities, be they nuclear or not, besides additional sanctions if the Islamic Republic exceeds specific levels of missile tests, be they nuclear or not.
Certainly if President Trump participated in the talks on the North Korean nuclear system with a tough and isolated position, at least as far as the JCPOA is concerned – which many US analysts predict will “be dead and gone in May” – it would be impossible for Kim Jong-Un, for example, to take him very seriously.
Moreover, a few days ago the US President announced an increase in tariffs and duties on Chinese products to the tune of 60 billion dollars.
Obviously President Trump is putting pressures on China for North Korea to make less military investment, but China has well-known and powerful commercial countermeasures to take and it will certainly not leave North Korea alone, especially in a situation of exacerbated Sino-American relations.
Finally, the US President threatened to withdraw a substantial amount of US troops from South Korea.
This makes the traditional US ally in the Korean peninsula, namely South Korea, less loyal and provides to Kim Jong-Un additional cards to play during the negotiations – and the North Korean leader has already proved to be an excellent poker player.
The strategic aim underlying President Trump’s operation is obvious. He wants to favour – far too much – the old circle of interests between the United States and Saudi Arabia, which is connected with economic assessments (the military and non-military Saudi investment in the United States) or with the maintenance of the petrodollar system – which is essential for the whole Sunni and US horizon – so as to later isolate Iran as a “rogue state” and only terrorist country, thus forgetting the well-known ties existing between the Gulf petromonarchies and the Salafist, Qaedist and neo-Caliphate Middle East jihadism.
In simpler terms, “withdrawing” from the Treaty means that the United States wants to return to the pre-JCPOA sanction regime, which implies the return to stricter regimes for both the UN and the ever more reluctant European allies, who have already much business in place with Iran.
Germany is already lobbying in the EU for new sanctions against Iran, which, in its opinion, would convince President Trump not to withdraw from the JCPOA.
As Voltaire used to say, “a little evil is often necessary for obtaining a great good”, but in this case it is unlikely that the mechanism will work.
In this case President Trump would say that sanctions are fine with the EU and would add new ones.
To the delight of Saudi Arabia which, if deprived of geopolitical and military control east of the Middle East, would become much less tractable than it currently is.
Fighting each other – “Befriend a distant State and strike a neighbouring one”, as taught by the everlasting Chinese 36 Stratagems of the Art of War (and not only applying to war and military strategy).
This holds true also for Israel.
Certainly the pressure on the border with Syria must be relieved and Israel is right in conveying harsh signs of its presence. However, are we sure that an all-powerful Saudi Arabia throughout the Middle East still remains friendly to the Jewish State, albeit secretly? What about Palestine?
If, on May 12, President Trump reintroduces sanctions, Iran will no longer be able to export oil or anything else, since it would incur US “secondary sanctions” and any bank acting as a broker in Iran’s transactions would be excluded from the North American circuit, which is certainly no small thing.
The US President, however, can reduce the financial isolation of any country by declaring that one of its banks “has significantly reduced Iranian oil imports”, which provides further room for political autonomy for President Trump.
In fact, the EU is studying mechanisms to shield against US secondary sanctions, but May 12 is very close.
There is also the concrete possibility that President Trump may want to “make an agreement to have another agreement”: the US President may want to make a new JCPOA, with more sanctions, to force the Europeans to follow him in this adventure.
This would be the US President’s real goal, i.e. a EU economy again ancillary to the US cycle – as at the time of Kissinger’s “Year of Europe”.
This would be currently impossible.
The EU Member States also know that the sanctions on Iran increase the oil barrel price by one or two dollars.
And these sanctions against Iran cost to the United States over 272 million US dollars a year.
Approximately 315,000-420,000 fewer jobs for the US rednecks.
What are the possible solutions? A proposal for a new JCPOA to be redrafted immediately, with a specific note in addition to those already present in relation to the IAEA checks on any nuclear weapon systems that could be installed on ICBM carriers.
Abolition – after a three-month standby period – of any secondary sanction procedure, after Iran declaring the size and structures of its missile program which may be used with very unlikely nuclear warheads.
Apart from the technical work carried out by the Vienna-based Agency, political control powers should be granted to a joint committee including JCPOA members and representatives appointed by the UN Security Council, without fearing any possible overlap, which can only do good.
We should make President Trump understand that, while it is true that the EU is the largest commercial region imposing import duties, repeating this model in the United States is not at all useful, neither for America, nor for Europe, nor for the Middle East countries which must let be developed in peace.
It is our primary interest for three main reasons.
Firstly to avoid being tied up, hand and foot, to Saudi Arabia alone; secondly to avoid financial transfers from the Sunni Middle East in one direction only and thirdly to avoid having to cover up, indefinitely, some countries which pay lip service to the fight against “terrorism” and, indeed, finance terrorists massively.
GIANCARLO ELIA VALORI
Honorable de l’Académie des Sciences de l’Institut de France