BRANDON J. WEICHERT | THE WEICHERT REPORT
With the announcement that the People’s Republic of China is slowly starting to enact (somewhat) sanctions on the North Korean regime, the fact that Russia, despite its bluster has even less influence over the North Koreans than the Chinese do, and the revelation that U.S. Secretary of State Rex Tillerson is having not-so-secret meetings with his counterparts in North Korea, there seems to be a mild cooling off of tensions in that region.
In fact, many nuclear warfare experts, such as the venerable physicist, Dr. Michio Kaku, remain skeptical that the North Koreans possess an actual thermonuclear warhead, let alone true nuclear weapons. He thinks (as do I) that the North Koreans have a basic nuclear weapons capability that they are perfecting, but that their current stock of weapons are hastily arranged and nowhere near as effective as American, Chinese, or Russian bombs of similar make and yield.
Essentially, the bluster is going to start ratcheting down. Of course, in today’s world, as one crisis moves back from boil to simmer, another one moves forward with explosive intensity. In this instance, the next nuclear imbroglio to consume the world is the issue of the Iranian nuclear program (a partner state in the gallery of rogues of which I’ve dubbed, the “nuclear nexus”). This issue is more complex than the North Korean situation, because the United States is tethered to the executive agreement that the previous Obama Administration crafted that granted Iran the right to develop nuclear technology, and essentially normalized International relations with Iran.
During the 2016 U.S. presidential campaign, Donald J. Trump rightly attacked the Obama Administration’s executive agreement with Iran as the “worst deal” he had ever seen. The deal not only saw the transfer of hundreds of billions of dollars from the United States’ already-strained coffers into the Iranian banks, but it also allowed for Iran to rehabilitate its ailing economy by opening trade with the rest of the world. As soon as the sanctions were lifted following the completion of the deal, Iran entered into a series of high-profile, 15-year contracts with several European businesses–including those from Italy, France, and Germany (three of the continental European states who spend the most on defense and have long been viewed as primary American allies on the continent).
Thankfully, reports suggest that the business deals that Iran entered into have not been as fruitful as either the Mullahs or the Europeans had wished. The reason? American pressure since the ascendance of Donald Trump to the presidency has been enough to scare away the solidification of these business ties. What business wants to risk billions of dollars in deals with Iran under uncertain circumstances? Even still, the mere existence of these deals undermines the American position, as it appears to drive a wedge between America and the countries she would need to reinstitute the containment of Iran.
This is another issue: regardless of the nuclear agreement, Iran has been loosed from its proverbial box. The 2003 Iraq War was bad enough to upset the vital balance of power in the Middle East, but ever since then things have gotten more complicated in the case of deterring Iran. During the Obama Administration, great effort was put into distancing the United States from its traditional regional partners (i.e. Saudi Arabia, Jordan, Egypt, and Israel) and stabilizing relations with Iran.
At the same time, the United States did little to reassure its partners that it planned on remaining in the region beyond the diplomatic level: the Obama Administration faltered on its campaign commitment to beefing up America’s presence in “the right war” in Afghanistan (one of the few moves that I think former President Obama was likely correct about), and Obama withdrew U.S. forces precipitously from Iraq just as the situation in the country had stabilized.
Then, of course, the Obama Administration supported the Islamist Muslim Brotherhood in its attempt to overthrow the traditional pro-American regime in Egypt and it looked the other way as similar movements swept throughout the region during the ill-fated Arab Spring. To compound our problems, Obama then bombed Libya and facilitated the rise of jihadist networks when he toppled Muammar Gaddafi. These moves destabilized the region further and in that instability, Iran broke free from its constraints–empowered by the Russian Federation–and sought to push the American presence out of the region entirely and to topple the Sunni Arab powers (as well as Israel). In the morass of these changes, Turkey stepped forward, and has further undermined both the American position in the Middle East as well as overall European security, as it has sought to move closer to both Iran and Russia, in an effort to reassert its own dominion over the Sunni Arab world.
Since April, President Donald Trump has done his part in re-certifying the Iran nuclear agreement–which he is required to do every 90 days. However, when he last re-certified, he emphatically stated that, while Iran was living up to the letter of the deal, it was not living up to the “spirit” of that deal (i.e. Iran continues to flout the agreement by developing nuclear weapons capabilities). There is a clear desire on the President’s part to put pressure on Iran. Meanwhile, the Iranians continue claiming that the Trump Administration has re-certified the agreement, but has not lived up to its end of the agreement either. Both sides seem to be intent that the deal is all-but dead, yet neither side is willing to be seen in the eyes of the world as the aggressor.
The Trump Administration has worked assiduously to rebuild America’s old alliance system in the Middle East that has been strained since the Iraq War of 2003, the Arab Spring, and the Obama Administration’s bad deal with Iran. The Qatar incident seems to be the boldest move yet by the new-old regional alliance to put Iran back into its box. In fact, recent reports suggest that the Saudi leadership met with the Qatari leadership, and it would appear that there might be some movement on bringing Qatar to heel. If that occurs, a major conduit for Iranian power beyond its borders will have been closed. Time will tell if this ultimately bears fruit. But there does seem to be a real push on the part of the American-backed alliance to constrain Iran and roll back its significant gains.
As we move toward a new period of increased hostility with Iran, the price of oil will spike. As for Russia? It is likely that the Russians will do little to protect their proxy in Iran other than supply weapons. You see, the Russians want a stable Iran that it can sell weapons and equipment to; it needs a strong Iran to prevent a flood of refugees from marching up to its own borders in its southern periphery; and it truly wants to complicate American designs in the region, if for only the fact of appearing as though it were a major player on the world stage. Remember, the Russian leadership takes an oppositional view of the United States. No longer able to significantly bend international affairs to its own interests (as Russia did during the Cold War), and not wanting to acknowledge the fact that Russia has fallen far under Putin’s leadership, the Kremlin maintains appearances of being a real power by simply opposing the United States on critical issues globally.
Also, as I have argued repeatedly, current Russian capabilities and defense expenditures are not commensurate with Western fears over the Russian threat. Ultimately, at this time, the Russians would not openly oppose American efforts to punish Iran for their nuclear program in the military realm, simply because they could not. The ongoing Russian military operations in Ukraine and Syria have simply stretched the Russian military to its capacity (throw in internal instability and the Russian Armed Forces are not what many think they are today). In fact, the Russians are not the Nazis in 1939, they are the Ottoman Empire or the Austro-Hungarian Empire in its final years of existence. However, like the two aforementioned empires, a failing empire can be just as dangerous as an ascendant one–particularly if given new (albeit temporary) life through the rise in oil prices.
Any confrontation with Iran following the end of the executive agreement on their nuclear program would likely see the vast Iranian oil supply go off-line for some time. Plus, the Strait of Hormuz, through which a bulk of the world’s oil supply passes daily, would be effectively closed off by Iranian mining operations and the threat of Iranian piracy and missile attacks. This, then, would force the world to turn more readily to other sources of energy–in this case, the Russian Federation. Overall, the price of oil will spike (because there is an inverse relationship between the price of oil and supply risk), which will empower the Russians.
While I remain skeptical about Russia’s staying power and true ability to threaten the world, the fact that Russia’s economy is almost entirely dependent on the unstable price of oil means that its military modernization and political stability are heavily dependent on a high price of oil worldwide. Since the global price of oil has been relatively low for a few years, the Russians have suffered mightily. The Eastern Europeans, who most fear the return of the old Russian bear, have been given a brief respite from the threat of invasion, as Russia simply cannot afford to agitate for war against them–especially now that the United States seems intent on propping up the necrotic NATO alliance (I’ve argued the best solution is to give Eastern European states the capability to defend themselves, rather than rely on the sclerotic NATO and EU).
The relatively low price of oil has prevented Russia from experimenting with greater levels of aggression. However, that might change if the global price rises above $80 per barrel–which it would do in the event of some kind of conflict between the West and Iran. So, rather than rushing to defend their erstwhile ally in Iran, it is highly likely that Russia would give the Iranians just enough abilities to defend themselves to prolong the conflict. The Russians need the money, after all. Essentially, the relatively low price of oil has affirmed my long-time belief that Russia’s threat is overhyped. However, if the price were to spike upward significantly–and for a protracted period–the Russians would once again have a momentary bout of strength where they could try and cleave more bits of Eastern Europe into their sphere of power.
Lastly, in terms of instability, we’ve witnessed just how American-backed wars in the Middle East have destabilized Europe with immigration flows. Since the Iraq War of 2003, scores of refugees have flooded over the continent, bringing with them foreign ideas of culture and governance–as well as increased incidences of Islamic terrorism. Since the Syrian Civil War began in 2011, Europe has been simply overwhelmed by ceaseless refugee flows. This, on top of the prolonged economic crisis that Europe has endured, has led to absolute political instability. In fact, the German decision in 2015 to effectively welcome everyone into their lands has only exacerbated the decline of European solidarity and the rise of nationalist-populist movements, in places like Southern, Western, and Northern Europe. The one area of Europe that is resistant to the overall European push for greater levels of uncontrollable immigration has been Eastern Europe, which has rightly insisted upon sensible border controls and sustainable levels of immigration, in order to protect their countries from unwanted ideas and reduced economic activity.
Any further aggression in the Middle East would likely send refugees flowing toward Europe and Russia alike. Although, I would contend that any instability in the Shiite world would have far greater negative consequences for the Russians than for the Europeans. For this reason, Putin would likely remain engaged in support of the Iranians–but, again, only to a point.
I agree with Seeking Alpha‘s Kirk Spano: I’d say buy oil stocks now because in the next several months, things are likely to ratchet up in the Middle East. In fact, speculators are already assuming that the price of oil will reach over $100 per barrel in 2018. If the Qatari imbroglio is resolved in Saudi Arabia’s favor (it is likely to, especially now that Qatar is reaching out to Israel), then it is quite likely that the Trump Administration will abrogate the former Obama Administration’s nuclear agreement with Iran.
Once that happens, it will only be a matter of time before there is greater regional conflict. For their part, the Europeans should focus on shoring up their own immigration controls, and preventing yet another wave of immigration to their shores. And, the United States should seek to flood the global market with its own energy supplies, so as to destabilize the Russian position further and to help prevent the massive rise in the price of oil, which would only benefit the Russians. Whether or not the United States can manage this is another story entirely.
The issue at hand, though, is that any conflict with Iran would likely benefit Russia which has been withering away slowly, under the current low price of oil. Should that change, then we are in a entirely new dynamic.