Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Israelis, Saudis and the U.S. Iranian Nuclear Agreement

Politics / Middle East Nov 26, 2013 - 12:53 PM GMT

By: STRATFOR

Politics

A deal between Iran and the P-5+1 (the five permanent members of the U.N. Security Council plus Germany) was reached Saturday night. The Iranians agreed to certain limitations on their nuclear program while the P-5+1 agreed to remove certain economic sanctions. The next negotiation, scheduled for six months from now depending on both sides' adherence to the current agreement, will seek a more permanent resolution. The key players in this were the United States and Iran. The mere fact that the U.S. secretary of state would meet openly with the Iranian foreign minister would have been difficult to imagine a few months ago, and unthinkable at the beginning of the Islamic republic.


The U.S. goal is to eliminate Iran's nuclear weapons before they are built, without the United States having to take military action to eliminate them. While it is commonly assumed that the United States could eliminate the Iranian nuclear program at will with airstrikes, as with most military actions, doing so would be more difficult and riskier than it might appear at first glance. The United States in effect has now traded a risky and unpredictable air campaign for some controls over the Iranian nuclear program.

The Iranians' primary goal is regime preservation. While Tehran managed the Green Revolution in 2009 because the protesters lacked broad public support, Western sanctions have dramatically increased the economic pressure on Iran and have affected a wide swath of the Iranian public. It isn't clear that public unhappiness has reached a breaking point, but were the public to be facing years of economic dysfunction, the future would be unpredictable. The election of President Hassan Rouhani to replace Mahmoud Ahmadinejad after the latter's two terms was a sign of unhappiness. Supreme Leader Ali Khamenei clearly noted this, displaying a willingness to trade a nuclear program that had not yet produced a weapon for the elimination of some sanctions.

The logic here suggests a process leading to the elimination of all sanctions in exchange for the supervision of Iran's nuclear activities to prevent it from developing a weapon. Unless this is an Iranian trick to somehow buy time to complete a weapon and test it, I would think that the deal could be done in six months. An Iranian ploy to create cover for building a weapon would also demand a reliable missile and a launch pad invisible to surveillance satellites and the CIA, National Security Agency, Mossad, MI6 and other intelligence agencies. The Iranians would likely fail at this, triggering airstrikes however risky they might be and putting Iran back where it started economically. While this is a possibility, the scenario is not likely when analyzed closely.

While the unfolding deal involves the United States, Britain, France, China, Russia and Germany, two countries intensely oppose it: Israel and Saudi Arabia. Though not powers on the order of the P-5+1, they are still significant. There is a bit of irony in Israel and Saudi Arabia being allied on this issue, but only on the surface. Both have been intense enemies of Iran, and close allies of the United States; each sees this act as a betrayal of its relationship with Washington.

The View from Saudi Arabia

In a way, this marks a deeper shift in relations with Saudi Arabia than with Israel. Saudi Arabia has been under British and later American protection since its creation after World War I. Under the leadership of the Sauds, it became a critical player in the global system for a single reason: It was a massive producer of oil. It was also the protector of Mecca and Medina, two Muslim holy cities, giving the Saudis an added influence in the Islamic world on top of their extraordinary wealth.

It was in British and American interests to protect Saudi Arabia from its enemies, most of which were part of the Muslim world. The United States protected the Saudis from radical Arab socialists who threatened to overthrow the monarchies of the Arabian Peninsula. It later protected Saudi Arabia from Saddam Hussein after he invaded Kuwait. But it also protected Saudi Arabia from Iran.

Absent the United States in the Persian Gulf, Iran would have been the most powerful regional military power. In addition, the Saudis have a substantial Shiite minority concentrated in the country's oil-rich east. The Iranians, also Shia, had a potential affinity with them, and thereby the power to cause unrest in Saudi Arabia.

Until this agreement with Iran, the United States had an unhedged commitment to protect Saudi Arabia from the Iranians. Given the recent deal, and potential follow-on deals, this commitment becomes increasingly hedged. The problem from the Saudi point of view is that while there was a wide ideological gulf between the United States and Iran, there was little in the way of substantial issues separating Washington from Tehran. The United States did not want Iran to develop nuclear weapons. The Iranians didn't want the United States hindering Iran's economic development. The fact was that getting a nuclear weapon was not a fundamental Iranian interest, and crippling Iran's economy was not a fundamental interest to the United States absent an Iranian nuclear program.

If the United States and Iran can agree on this quid pro quo, the basic issues are settled. And there is something drawing them together. The Iranians want investment in their oil sector and other parts of their economy. American oil companies would love to invest in Iran, as would other U.S. businesses. As the core issue separating the two countries dissolves, and economic relations open up -- a step that almost by definition will form part of a final agreement -- mutual interests will appear.

There are other significant political issues that can't be publicly addressed. The United States wants Iran to temper its support for Hezbollah's militancy, and guarantee it will not support terrorism. The Iranians want guarantees that Iraq will not develop an anti-Iranian government, and that the United States will work to prevent this. (Iran's memories of its war with Iraq run deep.) The Iranians will also want American guarantees that Washington will not support anti-Iranian forces based in Iraq.

From the Saudi point of view, Iranian demands regarding Iraq will be of greatest concern. Agreements or not, it does not want a pro-Iranian Shiite state on its northern border. Riyadh has been funding Sunni fighters throughout the region against Shiite fighters in a proxy war with Iran. Any agreement by the Americans to respect Iranian interests in Iraq would represent a threat to Saudi Arabia.

The View from Israel

From the Israeli point of view, there are two threats from Iran. One is the nuclear program. The other is Iranian support not only for Hezbollah but also for Hamas and other groups in the region. Iran is far from Israel and poses no conventional military threat. The Israelis would be delighted if Iran gave up its nuclear program in some verifiable way, simply because they themselves have no reliable means to destroy that program militarily. What the Israelis don't want to see is the United States and Iran making deals on their side issues, especially the political ones that really matter to Israel.

The Israelis have more room to maneuver than the Saudis do. Israel can live with a pro-Iranian Iraq. The Saudis can't; from their point of view, it is only a matter of time before Iranian power starts to encroach on their sphere of influence. The Saudis can't live with an Iranian-supported Hezbollah. The Israelis can and have, but don't want to; the issue is less fundamental to the Israelis than Iraq is to the Saudis.

But in the end, this is not the problem that the Saudis and Israelis have. Their problem is that both depend on the United States for their national security. Neither country can permanently exist in a region filled with dangers without the United States as a guarantor. Israel needs access to American military equipment that it can't build itself, like fighter aircraft. Saudi Arabia needs to have American troops available as the ultimate guarantor of their security, as they were in 1990. Israel and Saudi Arabia have been the two countries with the greatest influence in Washington. As this agreement shows, that is no longer the case. Both together weren't strong enough to block this agreement. What frightens them the most about this agreement is that fact. If the foundation of their national security is the American commitment to them, then the inability to influence Washington is a threat to their national security.

There are no other guarantors available. Israeli Prime Minister Benjamin Netanyahu went to Moscow, clearly trying to get the Russians to block the agreement. He failed. But even if he had succeeded, he would have alienated the United States, and would have gotten instead a patron incapable of supplying the type of equipment Israel might need when Israel might need it. The fact is that neither the Saudis nor the Israelis have a potential patron other than the United States.

U.S. Regional Policy

The United States is not abandoning either Israel or Saudi Arabia. A regional policy based solely on the Iranians would be irrational. What the United States wants to do is retain its relationship with Israel and Saudi Arabia, but on modified terms. The modification is that U.S. support will come in the context of a balance of power, particularly between Iran and Saudi Arabia. While the United States is prepared to support the Saudis in that context, it will not simply support them absolutely. The Saudis and Israelis will have to live with things that they have not had to live with before -- namely, an American concern for a reasonably strong and stable Iran regardless of its ideology.

The American strategy is built on experience in Iraq and Afghanistan. Washington has learned that it has interests in the region, but that the direct use of American force cannot achieve those goals, partly because imposing solutions takes more force than the United States has and partly because the more force it uses, the more resistance it generates. Therefore, the United States needs a means of minimizing its interests, and pursuing those it has without direct force.

With its interests being limited, the United States' strategy is a balance of power. The most natural balance of power is Sunni versus Shia, the Arabs against the Iranians. The goal is not war, but sufficient force on each side to paralyze the other. In that sense, a stable Iran and a more self-reliant Saudi Arabia are needed. Saudi Arabia is not abandoned, but nor is it the sole interest of the United States.

In the same sense, the United States is committed to the survival of Israel. If Iranian nuclear weapons are prevented, the United States has fulfilled that commitment, since there are no current threats that could conceivably threaten Israeli survival. Israel's other interests, such as building settlements in the West Bank, do not require American support. If the United States determines that they do not serve American interests (for example, because they radicalize the region and threaten the survival of Jordan), then the United States will force Israel to abandon the settlements by threatening to change its relationship with Israel. If the settlements do not threaten American interests, then they are Israel's problem.

Israel has outgrown its dependence on the United States. It is not clear that Israel is comfortable with its own maturation, but the United States has entered a new period where what America wants is a mature Israel that can pursue its interests without recourse to the United States. And if Israel finds it cannot have what it wants without American support, Israel may not get that support, unless Israel's survival is at stake.

In the same sense, the perpetual Saudi inability to create an armed force capable of effectively defending itself has led the United States to send troops on occasion -- and contractors always -- to deal with the problem. Under the new strategy, the expectation is that Saudi soldiers will fight Saudi Arabia's wars -- with American assistance as needed, but not as an alternative force.

With this opening to Iran, the United States will no longer be bound by its Israeli and Saudi relationships. They will not be abandoned, but the United States has broader interests than those relationships, and at the same time few interests that rise to the level of prompting it to directly involve U.S. troops. The Saudis will have to exert themselves to balance the Iranians, and Israel will have to wend its way in a world where it has no strategic threats, but only strategic problems, like everyone else has. It is not a world in which Israeli or Saudi rigidity can sustain itself.

This analysis was just a fraction of what our Members enjoy, Click Here to start your Free Membership Trial Today! "This report is republished with permission of STRATFOR"

© Copyright 2013 Stratfor. All rights reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis.

STRATFOR Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in