AMY GOODMAN: This is Democracy Now! I’m Amy Goodman, with Nermeen Shaikh.

NERMEEN SHAIKH: Global oil and natural gas prices are soaring after Israel bombed a massive natural gas reserve in Iran, the largest in the world. Iran retaliated by twice attacking the world’s largest liquid natural gas production facility, located in Qatar.

Iran also attacked key energy infrastructure in Saudi Arabia, Kuwait and the United Arab Emirates. At one point, the price of oil reached US$118 a barrel, a 60 percent jump since the US and Israel launched their war on Iran.

In a post online, Trump threatened to blow up the entire South Pars gas field if Iran continued to target the Qatari facility. Trump also claimed the US, “knew nothing” about the Israeli attack on the South Pars gas field, but The Wall Street Journal reports Trump approved the strike to pressure Iran to open up the critical Strait of Hormuz.

AMY GOODMAN: About 20 percent of the world’s oil exports flows through the Strait of Hormuz. President Trump has asked other countries to send warships to help force open the strait, but many nations are rejecting the request.

We’re joined now by Laleh Khalili, professor of Gulf studies at University of Exeter and the author of several books, including her latest, Extractive Capitalism: How Commodities and Cronyism Drive the Global Economy. She also wrote Sinews of War and Trade: Shipping and Capitalism in the Arabian Peninsula.

Professor Khalili, thanks so much for being with us. Can you start off by talking about the state of the Strait of Hormuz right now, its closure; President Trump, according to Reuters, perhaps sending in thousands of troops, what exactly this means; and the Israeli bombing of the South Pars gas field, the largest in the world?

President Trump said, in a rare rebuke, the US didn’t know. Most people are saying that is highly unlikely, that is probably untrue.

The end of the petrodollar?             Video: Democracy Now!

Transcript:

LALEH KHALILI: So, the Strait of Hormuz is one of the most important choke points for oil — a choke point being an area during which, if it’s closed down, you end up getting a major disruption in the flow of global trade.

So, the Strait of Hormuz is one. The Suez Canal is another one. The Panama Canal is another one.

And there are a number of these different choke points all around the world. Now, what’s specific about Hormuz and what’s distinctive about it is that it is the choke point where the quantity of oil that goes through is higher than any other commodity that actually flows across the strait.

As you just mentioned, about 30 percent of the global oil flows through that. And part of the reason for that is, of course, that the world’s biggest oil producers — some of the biggest oil producers are all sitting around the Persian/Arabian Gulf, so Iran, Iraq, Kuwait, Saudi Arabia and Qatar, Abu Dhabi, which all are huge producers of oil in the first place, and then natural gas in the case of Qatar and Iran in second place.

Now, what has been fascinating is that anybody who has one of these apps that you can put on your phone, like MarineTraffic or VesselFinder, you can actually take a look at the flow of traffic, the flow of vessel traffic, flow of ship traffic, through these different seas in the world.

And if you zoom in on the Strait of Hormuz, what you’ll find is that instead of seeing actually a steady traffic of little usually pink or green arrows going through, which indicate tankers, what you end up seeing are major clusters of ships that are bunched up very near ports where oil is produced and usually put on ships.

What that indicates is that, basically, for a number of different reasons — and I’m going to go into that in a minute — the flow of ships, the flow of ship traffic, has basically come to a halt.

Now, the reasons behind this are multifold. Of course, there is, number one, that Iran is attacking a number of the ships that are going through, and the way that it’s attacking them is through the use of very cheap either drones or sea mines, and that means that it’s basically almost impossible to deal with this particular threat, because the drones are produced so extensively in terms of number and they’re so inexpensive that they can basically be replenished even if they are destroyed.

Also being smaller, they’re much harder to target, etc. So, there has been a number of drone attacks against ships carrying oil through the channel, and so, of course, that scares a lot of carriers, a lot of tankers.

The second reason, which I actually think is perhaps even more significant, in part because it is actually not something that either the US or Iran can control, is that the moment something like this happens, the moment that there is a threat against ships, what you end up having is that insurance brokers, primarily situated in London, but there are, of course, some also in the US, China and in Europe, but really the centre for provision of maritime insurance is London, at Lloyd’s, and the ship brokers end up putting a specific war risk premium on ships.

And that means that going from something like 1 percent of the cost of the hull, meaning the ship’s body, or the cargo, meaning what it’s carrying, goes to something like 5 percent, or it goes from one fraction of 1 percent to, say, 5 percent. So that means that suddenly, instead of paying in the hundreds of thousands for insurance for a super tanker, what you’re looking at is millions in insurance, which, of course, increases the cost of the oil that is traveling. So, that’s the second reason.

The third reason is something that the Houthis noticed when they were blockading the Red Sea in support of the Palestinians when Israel was committing genocide against Palestinians. And that is that sometimes the threat alone suffices in getting the ships to stop going through or, indeed, to make declarations that allows for them a degree of protection.

So, the Houthis, when they had blockaded the sea, had asked that any ships that claimed that they were not touching Israel, meaning they were not delivering to or picking up from Israel, could be allowed to go through the canal.

And so, it happened that this automatic identification system that a lot of ships — well, all ships carry — it’s called the AIS system, and the AIS system indicates what ship is in the vicinity of the system, what it’s carrying and what flag it has, meaning which authorities it responds to.

So, now what we’re seeing is that apparently Iran has mentioned that any ship, for example, that is going to China will be let through, or any ship that is not coming from one of these allied states to the US will be allowed through. Of course, there is a lot of variation in what kind of thing they have requested or what is being reported, so it’s a lot harder to see what exactly the AIS systems are being on these ships.

As I said, we are mostly seeing them clustering and waiting in these locations, one of the main ones being the Port of Fujairah, which is actually not in the Persian Gulf. It is in the Gulf of Oman.

And oil from Abu Dhabi, which is on the Persian Gulf side, is shipped to Fujaira through a pipeline. So we’re seeing a cluster of ships near Fujaira.

Iran, of course, also attacked Fujaira port. And then we’re seeing a cluster of ships near Ras Laffan, which is the main gas production and gas lifting port in Qatar. The third is, of course, around the oil fields of Saudi Arabia, a little bit further up the Persian Gulf. And so, these clusters of ships are waiting there and hoping to be able to at some point pick up oil to be carried out.

But we’re not seeing much of that flow anywhere at all.

NERMEEN SHAIKH: Professor Khalili, you mentioned that there are — they are looking for, the Iranians, to see which vessels in the Strait of Hormuz — to what countries they’re affiliated, looking at their flags. Chinese vessels have reportedly been permitted to pass through the strait. China imports about 40 percent of its oil from the Middle East and has been one of the largest buyers of Iranian oil. There are also reports that the Iranians are suggesting they’d consider allowing a small number of oil tankers to pass through the strait if the oil cargo is traded in Chinese yuan rather than —

LALEH KHALILI: Yes.

NERMEEN SHAIKH: — US dollars. If you could comment on that?

LALEH KHALILI: This is really fascinating, because, of course, we know that the fundamental basis of the US imperial order since the end of the Second World War has been, on the one hand, petroleum and, on the other hand, the US dollar. The globe’s production and finance worlds are dependent on the petroleum that the US has guaranteed the flow of since the end of the Second World War, and which, until the nationalisation of oil in the 1970s and 1980s, basically controlled something like 60 percent of the world’s oil reserves.

After nationalisation, that percentage dropped dramatically, but the US dollar continues to be, and the financial channels that the US has crafted, continue to be a very significant bolster for the empire.

So, the fact that Iran is actually looking for alternatives to the dollar in order to challenge the petrodollar regime, which is, you know, as I said, one of the fundamentals of the US empire, is a really interesting and quite clever indication of how the Iranians are hoping to influence the crafting of a world post this war, or a new world order post this war, where there’s a multipolar financial system, where, for example, the dollar is no longer a single currency that rules the world and the US is the only channel that controls — or, the only power that controls financial channels, because, of course, the US has used this inordinate power to strong-arm various states, to institute sanctions, to make it difficult for its enemies, for example, to purchase oil.

And, of course, it has used it to coerce a lot of countries, as we see, for example, in the case of Cuba or Iran, or indeed Russia, to do its bidding. So, the fact that Iran is calling for petroyuans to become an alternative to petrodollars is actually quite significant also in indicating that the Iranians are well aware of how extensively the US has used its coercive sanction capabilities, through its control of the financial channels and through its mastery of the petrodollar, and are trying to erode that power.

NERMEEN SHAIKH: Professor Khalili, you know, the US is now the world’s largest oil producer, but because oil is a globally priced commodity, the price goes up in the US if the world market price goes up. But —

LALEH KHALILI: That’s right.

NERMEEN SHAIKH: — how important do you think this might be in Trump’s calculation? Because another consideration, another aspect of this, may be that as oil supplies diminish from the Middle East, the US could benefit, because it is the world’s largest oil producer, and the price of its oil will go up, and the demand for its oil.

LALEH KHALILI: Absolutely. What a fantastic question, because, in fact, we have seen that when the Russian invasion of Ukraine began and the Nord Stream gas, natural gas, pipelines to Europe were sabotaged, we now — there are now indications that this may have been done at the behest of the US.and its Ukrainian allies. But nevertheless, when that sabotage happened, it actually translated into massive gains for US natural gas production.

The thing is that there are a number of reasons why oil is not — why the US cannot become the sole oil producer for the whole of the world. One is the question of proximity, for example. The second is the question of capacity that the US has in order to actually replace, for example, the oil that is produced by Saudi Arabia or by Iran or, indeed, by Russia.

But the third factor — and I think that this is the one that I think we should look out for — is that in the last 10 or 15 years, China has actually begun generating an alternative set of fuels, sustainable fuels, and developing technologies, particularly of electric and battery technologies, that will allow for, for example, solar or wind energy to displace fossil fuels.

And the more that the price of oil goes up, which, of course, we’ve seen that happen, as you mentioned earlier — and, in fact, this also translates into major windfalls for US oil companies. This oil prices going up benefits Chevron. It benefits Exxon. It doesn’t benefit the average US citizen at the petrol stations, at the gas stations, but it does benefit the oil companies.

So, it definitely does — that does happen. But the higher the price of oil goes up, the relatively cheaper it becomes to actually have sustainable alternatives, which, of course, that means that it benefits China in a major way, since China is way ahead of the rest of the world in producing these technologies and in producing them cheaply.

The solar panels that are being produced in China are a fraction of the price of solar panels that were being produced something like 15 or 20 years ago. And I think this shift is actually a major long-term concern for the oil companies.

In the short term, they’re taking all the windfall that they can get. But this, again, is — the kind of a postwar order that will likely also have major implications for the kind of energy people are paying to use or people are willing to use, actually.

AMY GOODMAN: We just have 20 seconds. But the effect of the bombing of the South Pars facility, the largest gas facility in the world, what it means for Iran, what it means for the world, and President Trump denying the US had anything to do with, which most do not believe?

LALEH KHALILI: No, absolutely not. There is no way that Israel would have actually done this without coordination with the United States. And, in fact, the channels that deny, for example, that the US coordinated, or report Trump’s denials, are the channels that are often used to feed us the kinds of lies that the administration tells us.

But what is quite significant about South Pars — and I know it’s a very short time left, so I’m going to be very quick about it — is that the South Pars field is actually shared between Iran and Qatar.

The North Dome, which is on the south part of the Persian Gulf, is Qatar’s share of this major field, and Iran’s bit is in the northern part of the Persian Gulf.

And so, the destruction of the infrastructure there will not only have an effect on Iranians’ ability to produce electricity and fuel their various kinds of industries and/or homes, but it will also have an effect on the infrastructures that are used by the Qataris and which the Iranians and Qataris have been using in an extraordinary degree — to an extraordinary degree of coordination since the fields have been used. So, this actually also affects Qatar.

The bombing itself also affects Qatar. And I don’t think that this is a calculation that the rather know-nothing Trump administration has taken into account.

AMY GOODMAN: Laleh Khalili, we want to thank you so much for being with us, professor of Gulf studies at University of Exeter, author of several books, including her latest, Extractive Capitalism: How Commodities and Cronyism Drive the Global Economy. Thanks so much for being there.

Republished from Democracy Now! under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States Licence.

Article by AsiaPacificReport.nz

As the US and Israel battle to control the narrative of their war against Iran, their messaging gets harder to defend, reports Al Jazeera’s Listening Post.

With the war entering its third week, the upper hand that the United States and Israel hold militarily is being countered asymmetrically by Iran which has been targeting various economic pressure points outside of its borders.

With censorship and propaganda shaping coverage on all sides, news audiences are having to navigate a confused and often misleading maze of information.

Contributors:
Vali Nasr – Professor, Johns Hopkins University
Michael Omer-Man – Director of research for Israel-Palestine, DAWN
Matt Duss – Executive vice-president, Center for International Policy (CIP)
Eskandar Sadeghi-Boroujerdi – Lecturer, University of St Andrews

On our radar
Israeli media outlets published near-simultaneous reports, citing anonymous officials, claiming Gulf states had attacked Iran. Qatar and the United Arab Emirates quickly denied the allegations, forcing corrections.

Critics say that the aim of the coverage was to suggest Gulf support for Israel and pull those states into the conflict. Tariq Nafi looks at how the episode has fuelled anger across the Arab world towards Washington and Tel Aviv.

Out Of Control: An escalating war accompanied by escalating war rhetoric    Video: AJ Listening Post

Battlefield AI: An interview with Matt Mahmoudi
Since the first attacks on Iran, the White House and Pentagon have been eager to test new military technologies.

As seen previously in Gaza, AI systems appear to be playing a central role in identifying targets and guiding strikes.

This raises serious ethical and accountability questions about how life-and-death decisions are being made on the battlefield.

Amnesty Tech researcher and assistant professor at the University of Cambridge, Matt Mahmoudi joins The Listening Post to discuss AI-assisted warfare.

Article by AsiaPacificReport.nz

The United States and Israel have, for decades, pursued the destruction of Iran as a sovereign state.

We are now in the opening days of what may be the final, decisive war to determine either the survival of the Iranian state or the expulsion of the US from the Arab lands and the creation of an entirely new security architecture for West Asia.

Sounds implausible? We live in truly unprecedented times and many scenarios are possible.

There are signals as to what may come next and to help identify them I spoke with US Ambassador (ret) Chas W. Freeman.

Whether intended or unintended, the US and Israel are in the process of severely damaging the economies of the Gulf States. By attacking Iran, they knew full well what the Iranians would do in response — after all, Iran had warned that any further attack on it would lead to a regional war.

Are we witnessing a brazen plan to destroy both Iran and seriously weaken the Gulf States, using Iran as a weapon to do the latter? Could this be a Machiavellian plan to throw a cluster bomb into The Great Muslim Reconciliation between the Sunni states and Shia Iran?

Will the war halt or accelerate the project to create an Islamic NATO which is based around last year’s Saudi-Pakistani defence pact? The Saudis have the dollars; the Pakistanis have the nukes and the troops.

Permanent isolation of Iran
The permanent isolation of Iran was the centrepiece of the US-promoted Abraham Accords — designed to bring the Israeli regime into the circle of love and keep Iran out in the cold.

Anything that runs counter to this is a threat. The war comes at a time when Iran and the Gulf States had taken major steps to mend fences after decades of hostility.

The murder of top Iranian General Qassem Soleimani on orders of Donald Trump in 2020 was supposed to kill off a diplomatic rapprochement between Saudi Arabia and Iran.

Soleimani and other officials were killed in a US missile strike at Baghdad airport without the permission of or notification to the Iraqi government. He was, according to Iranian, Saudi and Iraqi sources, including Iraqi PM Adil Abdul-Mahdi, heading for a meeting with his Saudi counterpart to broker a peace deal.

The assassination was successful but the US attempt to kill off the peace process failed.

US sabotages diplomacy
A week before the US and Israel launched their latest attack, Egypt and Iran announced that they had agreed to fully restore diplomatic relations and exchange ambassadors. It was the latest in a series of such moves to bring Iran in from the cold.

As the Middle East Institute pointed out shortly after, “Within days of the Israeli strike, [Pakistan’s] Prime Minister Shehbaz Sharif visited Doha in a show of solidarity. Seizing the crisis as an opportunity to elevate Pakistan’s strategic presence in the Gulf and the wider Middle East, its government voiced support for the proposed formation of a joint Arab-Islamic security force.”

The quickly signed Strategic Mutual Defense Agreement (SMDA) got a lot of attention in West Asia and was soon dubbed an “Islamic NATO” — an alliance that could one day replace American boots on the ground.

The Gulf States were also slowly coming to the realisation that America was unreliable, Israel was a genuine threat and Iran might be useful as a counterbalance to the US and Israel. A Pakistani nuclear shield and conventional military backup was being discussed as far away as Ankara; there were even whispers Iran might be invited to join.

Now, back to that question of whether the US is, through its war on Iran, deliberately weakening the Gulf States as part of a strategy to keep the Muslim world divided. I asked US Ambassador (ret) Chas W. Freeman and he replied, “I think you give far too much credit to the United States, and more particularly, to Israel, in terms of devious planning to do these things in the Gulf,” Freeman said.

“We’re actually pretty stupid and clumsy at what we do. Look at what we’re doing with the Peshmerga and the Kurds. How stupid do you have to be to do that?”

Ambassador Freeman is highlighting what has been a recurring cycle in US foreign policy – strategic betrayal — in which it uses groups like the Kurdish Peshmerga or the freshly-minted Coalition of Political Forces of Iranian Kurdistan (CPFIK) to attack US enemies only to throw them under the bus the moment they have served their purpose.

Luring Iranian Kurds
The CIA and the White House have tried to lure the Iranian Kurds into the current battle, Trump blurting out how “wonderful” it would be and how the map of Iran would be redrawn. This will only fuel Iranian nationalism.

Ambassador Freeman is numbered among those who believe that the US-Israeli defence shield is running low on interceptors and Iran could strike back hard in the coming weeks. He also surmises that the Iranians will have secretly signalled to the Gulf States that a condition of the war ending — if Iran gets to set the terms — will be the removal of all US military from the Gulf States.

None of us can say with certainty what the respective breaking points for the belligerents are but I certainly believe Iran is very far from out of the fight that the US and Israel has forced on them.

“Prior to the US-Israeli attack, the Gulf Arabs were moving — in their usual incoherent and inchoate way — toward some kind of coalition with Iran to balance Israeli military hegemony in the region,” Ambassador Freeman told me.

“Now Israel and the United States have given an opening to Iran to pursue its long term objective, which is to remove the American presence from the Gulf. Iran has turned a vicious attack on it into a strategic opportunity to force the Gulf States to do a cost-benefit analysis.”

Chas Freeman is probably right: the US didn’t intend to shatter the Gulf States as one of its war aims. That leaves the more plausible explanation: the Americans and Israelis are simply demented and war-crazed.

Either way, the US-Israeli war machine must be stopped for the sake of humanity.

Eugene Doyle is a writer based in Wellington, New Zealand, and a contributor to Asia Pacific Report. He has written extensively on the Middle East, as well as peace and security issues in the Asia Pacific region. This article was first published on his website www.solidarity.co.nz

Article by AsiaPacificReport.nz