The Intra-Arab War for Oil : 1950-1970

Egypt and Syria are two Arab countries of the East Mediterranean Sea. Actually Egypt is the largest and most important country of the Arab world. The two countries have some oil and natural gas reserves, but their reserves are peanuts when compared to the reserves of the Arab countries of the Persian Gulf i.e. Saudi Arabia, Iraq, United Arab Emirates, Kuwait, Qatar. At the following two tables of the Energy Information Administration you can see the 10 richest countries in oil and natural gas reserves.

Natural Gas

Picture 1

Richest Countries in Natural Gas Map

Oil

Picture 2

Richest Countries in Oil Map

Natural gas is given in billion cubic feet, and needs to be divided by 35 in order to be converted to billion cubic meters, and oil is given in billions of barrels. As you can see there are 4 Arab countries in the natural gas top ten, and another 5 in the oil top ten. I believe that shale oil and shale gas are also included in the reserves, and that’s why USA ranks 4th in the list of the richest countries in natural gas reserves.

Gamal Nasser was a socialist army officer in the Egyptian army. In 1952 Nasser, together with other Egyptian army officers, overturned the Egyptian King. Eventually Nasser became Egypt’s president, and he established a one party political system. Nasser, like all socialists, greatly admired looked upon the Soviet Union, and he moved Egypt away from the west and towards the Soviet Union. Nasser could not accept that Egypt, the most important Arab country, was so poor in oil and natural gas reserves, and his dream was for Egypt to gain control of the Persian Gulf oil.

In order to achieve his goal, Nasser used Pan-Arabism as his main ideology. Pan-Arabism was calling all Arabs to unite in one socialist country. Nasser was hopping to unite all Arabs in one country, under Egypt’s control. That way Egypt would control the oil of the Arab world. In order to protect their oil from Nasser, the Arabs of the Persian Gulf used Pan-Islamism as their ideology. Pan-Islamism asked Muslims to be united in one country under the Islamic Law.

Under Pan-Islamism Saudi Arabia was hoping to be the leader, since Mecca and Medina are in Saudi Arabia. Prophet Mohamed was born in Mecca and buried in Medina, and for the Muslims these cities are the two holiest cities in the world. Therefore under Pan-Islamism Saudi Arabia would have an advantage over Egypt. On the other hand religion would only play a minor role under Nasser’s socialism, and therefore Egypt would have an advantage, because Nasser was promising to redistribute the oil of the Persian Gulf.

In 1958, Egypt and Syria managed to become one country under Nasser’s leadership. The two countries formed the United Arab Republic. The Syrians surrendered their sovereignty to Egypt, hoping that the oil rich Arab countries of the Persian Gulf, under Nasser’s pressure, sooner or later would have to join the new country. Therefore the Syrian people would enjoy some of the oil profits. In 1958 the Iraqi socialists managed to overturn the Iraqi monarch too. The problem was that the new Iraqi president, Abd al-Karim Qasim, was not willing to surrender to Egypt the control of Iraq’s oil, and he was not willing to join Egypt and Syria in the United Arab Republic.

Gamal Naser and Abd al-Karim Qasim became enemies, and Egypt and Iraq had very problematic relations during this period. Iraq’s refusal to join Egypt and Syria was a great disappointment for the Syrian people, because they had surrendered their sovereignty to Egypt, in return for oil profits. And now they were seeing that their sacrifice was for nothing, because even though a radical socialist came in power in Iraq, a man who aligned his country with the Soviet Union, there was no benefit for Syria. That caused great disappointment in Syria, and in 1961 Egypt and Syria became again two independent states. Gamal Nasser was furious, but he preferred not to intervene militarily in Syria, because he did not want Arab blood on his hands.

In 1963, Abd al-Karim Qasim was assassinated in Iraq, and the socialists that came to power started again discussing with Egypt and Syria the possibility of a union between the three countries, but this time under a federation, which meant that Iraq would not have to surrender to Nasser the control of its oil. However the discussion collapsed at some point and nothing happened. The thing with the Iraqis was that even though they did not really want to share their oil with the Egyptians and the Syrians, they needed Syria and Egypt, because they were encircled by American allies, as you can see at the following map. Remember that Iran was an American ally until 1979 and the Islamic revolution. The Iraqis needed the Egyptians and the Syrians, in order to reach the Mediterranean Sea and sell their oil without having to cross the Persian Gulf and the Red Sea.

Picture 3

Map of Syria Iraq Egypt

You can also see on the map that Israel and Lebanon were a thorn in the eyes of Egypt and Syria. If Egypt and Syria had managed to conquer Israel and Lebanon, they could have blocked the exit of the oil pipelines of the Arabs of the Persian Gulf to the Mediterranean Sea, and they could have asked for a greater share of the oil profits. Israel and Lebanon were significantly reducing the geopolitical significance of Egypt and Syria.

At the following map, with the red line, you can see a rough sketch of the Trans Arabian Pipeline, which operated from 1947 to 1982. This was the largest pipeline of its time, and it crossed the Golan Heights in order to reach Lebanon and the Mediterranean Sea. The Golan Heights were under Syrian control until 1967, when they came under Israeli control. It is said that 30% of the oil that the Saudi ARAMCO has ever sold, has been sold through the Trans Arabian Pipeline. Gradually, with the construction of the large oil tankers, which could carry huge volumes of oil, the pipeline became less important, and it was abandoned in 1982.

Picture 4

Map of Syria and Lebanon

That’s why Nasser was Israel’s greatest enemy, and that’s why Syria never recognized Lebanon. Syria always claimed that Lebanon was a part of Syria. If Syria and Egypt had managed to eliminate Israel and Lebanon they would have drastically increased their geopolitical importance, and they could have asked for a much larger portion of the oil profits. It was only in 2008 that Syria and Lebanon accepted to establish diplomatic relations. I guess the reason is that Iran, Syria’s main ally, is financing Hezbollah in Lebanon. Hezbollah is playing an increasingly important role in Lebanon. Moreover, Iran brought forward the project of the Iran-Iraq-Syria-Lebanon Pipeline.

And like all that was not enough for Egypt and Syria in the 60s, Israel and Iran agreed on the Eilat-AShkelon Pipeline. Eilat is the only Israeli port that gives Israel access to the Red Sea. The Eilat-Ashkelon Pipeline would carry Iranian oil to the Mediterranean Sea, avoiding Egypt and the Suez Canal, and also avoiding Syria. For a rough map of the Eilat-Ashkelon Pipeline see the following map.

Picture 5

Map of Eilat-Ashkelon Pipeline

Nasser could not accept all that, and in 1967 he decided to close the Straits of Tiran to Israel, sending at the same time many army units at the Sinai Peninsula. By closing the Straits of Tiran, Nasser was basically blocking the Eilat-Ashkelon Pipeline. However Israel, supported by the Americans, attacked Egypt and Syria, and during the Six Days War, the Israelis took the Sinai Peninsula and the Golan Heights. Therefore the Eilat- Askhelon Pipeline Company was established in 1968, and at the same time the piece of the Trans Arabian Pipeline that was passing through the Golan Heights was no longer under Syrian control.  For the Golan Heights see the following Wikipedia map.

Picture 6

Map of Golan Heights

At another geographic location, in North Africa, Nasser could not blackmail Algeria and Libya, at least not in the same way that he could blackmail the Arabs of the Gulf. Even though the socialists took control in Algeria and Libya, and they did aligned their countries with the Soviet Union, they did not want to share their oil with Egypt and Syria. The Algerians and the Libyans did not need Egypt and Syria in order to sell their oil to the Europeans and the Americans. Because even though the Algerian and Libyan socialists aligned their countries with the Soviet Union, they could only sell their oil to the Europeans and the Americans. Russia had, and still has, an abundance of oil.

Gamal Nasser died in 1970, without ever achieving to control the oil of the Persian Gulf. However he had supporters in all Arab countries, and all Arab leaders attended his funeral. The only Arab leader who did not attend was the Saudi King. After all, Nasser was mainly after the Saudi oil. I must also say that when Nasser was using Pan-Arabism, and the socialists of the Persian Gulf, in order to attack the Arab monarchs of the Persian Gulf, the Saudis were using Pan-Islamism and the Muslim Brotherhood in Egypt, in order to attack Nasser. Therefore Nasser designated the Muslim Brotherhood as a terrorist organization.

However nowadays, the Muslim Brotherhood is supported by Turkey and Erdogan. Tayip Erdogan wishes to become the new Sultan of the chaliphate. That way Turkey would play a greater role in the oil and natural gas of the Persian Gulf. As a result the Saudis have designated the Muslim Brotherhood a terrorist organization. In a way Erdogan is for the Saudis a new Nasser. Except that Erdogan is not a socialist, like Nasser was, but he is an islamist. That does not mean that the Saudis and the Turks cannot reach an agreement. That will depend on how much Turkey wants.

You always hear intellectuals saying how complicated the Middle East is. That’s a great lie. The Middle East is complicated only when oil and natural gas is not based at the centre of the analysis. When oil and natural gas are placed at the centre of the analysis the Middle East is the simplest region in the world. There is only one rule in the Middle East, and that is that the fastest gun takes the oil. But the intellectuals will not say that, because their job, as Murray Rothbard and Ayn Rand were saying many decades ago, is to convince us about how much we need the civil servants that are paying them.

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Russia vs Turkey : The Geopolitics of the South and the Turk Stream Pipelines

Capture

This essay is the the second part of a series, with the first part being “USA Russia & China in the Middle East: Alliances & Conflicts”.

This is a very long essay which includes over 80 maps, and you are advised to download a free compy in pdf, mobi or epub version from Smashwords, at the following address:

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If however you decide to read this essay from this address please note that you can double click on the maps  to enlarge them.

Iakovos Alhadeff

 May 2015

Table of Contents

Introduction

 The 21st Century Conflicts Between Russia &Turkey

 Turkey’s Energy Dependence on Russia

 The South and the Turk Stream Pipelines

 Why the Turk Stream is not the Best Option

Neither for Russia nor for Turkey

 How the Announcement of the

Turk Stream Benefits Russia

 How the Announcement of the

Turk Stream Benefits Turkey

 The Cost of the South and the Turk Stream

 Greece Between Russia and Turkey

 Comparing 2015 with the First World War

 A Final Note

Introduction

In December 2014 the Russian President, Vladimir Putin, announced the cancellation of the South Stream pipeline, and its replacement by the Turk Stream pipeline. Before examining the geopolitical consequences of the cancellation of the South Stream and its replacement by the Turk Stream one needs to examine the geopolitical framework of the Russian-Turkish relations. This basically means to examine Russia’s and Turkey’s main geopolitical objectives, and to examine how the objectives of one country affect the objectives of the other.

Picture 1

Russia-Turkey

Russia’s most important geopolitical objective is to maintain her dominant role in the European oil and natural gas markets. Russia is the largest exporter of natural gas in the world, and one of the largest exporters of oil. Approximately one third of Europe’s oil and natural gas imports come from Russia.

Turkey’s most important geopolitical objective is to ensure the country’s energy security, because Turkey is very poor in oil and natural gas reserves. In addition Turkey wants to become the absolute energy hub between the Middle East and Europe, in order to generate huge revenues in transit fees, and to be able to bargain for better prices with the rich in oil and natural gas countries, which will depend on Turkey for their sales. By doing that Turkey will also increase her geopolitical might, because Europe will increase her dependence on Turkey.

Which are the main threats for Russia and Turkey? Which are the main obstacles to their geopolitical objectives? For Russia the main danger is the construction of a pipeline network that will connect Europe with the Caspian Sea and the Middle East through Turkey. This pipeline network would send to Europe the natural gas and oil of Iran, Iraq, Turkmenistan, Qatar, Saudi Arabia and Azerbaijan, which are all very rich countries in oil and natural gas. This would mean lower prices and lower market share for Russia’s oil and natural gas industry, which account for approximately 70% of the Russian government’s revenues.

Picture 2

Competition for Russia

For Turkey the main danger is the connection of Europe with the Middle East and the Caspian Sea with a pipeline network that will bypass Turkey as an energy hub. This would reduce Turkey’s ability to bargain vis a vis the rich in oil and natural gas countries, and it would also reduce Turkey’s geopolitical significance, because it would reduce Europe’s dependence on Turkey.

Picture 3

Competition for Turkey

In the past there have been two main efforts to bypass Turkey as the absolute energy connection between Europe and the Middle East. The first one was the Iran-Iraq-Syria pipeline, see the red line on the above map, and the other was the East Med pipeline (Israel-Cyprus-Greece), see the yellow line on the above map. Turkey attacked both Israel and Syria. Turkey attacked Syria with the help of Saudi Arabia, Qatar and UAE, and Turkey attacked Israel with the help of Qatar and Iran. Turkey and Qatar support Hamas, the Muslim Brotherhood affiliate that runs Gaza, and Iran supports Hezbollah, the shite military organization that operates at the borders of Israel and Lebanon. For more information see “USA Russia & China in the Middle East: Alliances & Conflicts”.

The above represent the main geopolitical objectives of Russia and Turkey, and the main threats to their geopolitical objectives. What is very important is that Turkey is the main threat for Russia’s geopolitical objectives, and Russia is the main threat for Turkey’s main geopolitical objectives. It is mainly through Turkey that a competing to Russia pipeline network can be constructed, in order to send Iranian, Iraqi, Qatari, Azerbaijani and Turkmen natural gas to Europe. At least that’s the best option, because the other options require the construction of long underwater pipeline networks, which are much harder to construct and they also cost a lot more.

Russia is behind the Iran-Iraq-Syria and the East Med pipelines. Gazprom agreed to construct and manage the Iran-Iraq-Syria pipeline, which would bypass Turkey (red line at the following map). An LNG plant would be built in Syria or Lebanon, which would liquefy the natural gas and send it to Europe or Africa with LNG carriers (ships). The pipeline would carry Iranian and Iraqi natural gas. In addition Russia agreed with Syria to exploit Syria’s off-shore natural gas fields in the Mediterranean Sea (purple circle at the following map).

Picture 4

Russia Israel Cyprus Syria

Moreover Russia formed an alliance with Cyprus and Israel in the East Mediterranean Sea. Both Israel and Cyprus have found natural gas reserves in the Mediterranean Sea (see black and yellow circles on the above map). Cyprus and Israel would be very happy to sell their natural gas to Europe through the East Med Pipeline (Israel-Cyprus-Greece), or by liquefying their natural gas at an LNG plant, which would be built in Cyprus, and then ship it to Europe.

With the plans for the Iran-Iraq-Syria pipelines, and the alliance with Cyprus and Israel, Russia managed to become for Turkey what Turkey was for Russia i.e. a geopolitical headache. Russia managed to become a geopolitical headache at the south of Turkey, in the same way that Turkey was a geopolitical headache at the south of Russia. In the same way that Turkey bypasses Russia from the south, with the TANAP and TAP pipelines (purple lines), Russia can bypass Turkey from the south with the Iran-Iraq-Syria and the East Med pipelines (red and yellow lines).

Picture 5

Turkey Russia Rivalry

It must be mentioned that the East Med pipeline is not completely controlled by Russia, as it would have been the case with the Iran-Iraq-Syria pipeline, but Russia’s alliance with Cyprus and Israel makes life for Turkey much harder.

The last factor that must be taken into account when examining the Russian-Turkish relations is the large trade in the energy sector between the two countries. Turkey is the second largest importer of Russian natural gas, with Germany being the largest, as you can see at the following table from the site of Gazprom.

Picture 6

Gazprom Gaz Supplies to Europe Part A

Πηγή:: Gazprom http://www.gazpromexport.ru/en/statistics/

Russian natural gas accounts for 56% of the Turkish imports, as you can see at the following pie chart of the Energy Information Administration.

Picture 7

Turkey's natural gas supplies

http://www.eia.gov/countries/cab.cfm?fips=tu

The above 5 points are the main elements of the geopolitical framework that should be used in order to analyse the Russian-Turkish relations. The first one is the energy corridor Turkey-Europe i.e. (TANAP-TAP). The second one is the energy corridor Middle East-East Mediterranean Sea-Europe (Iran-Iraq-Syria and East Med Pipelines). The third one is Turkey’s energy dependence on Russia. The fourth one is that Turkey is Gazprom’s second largest customer. The fifth one is that most of Russia’s income comes from her oil and natural gas sales in the European markets.

The 21st Century Conflicts Between Russia & Turkey

In this section I will describe in more detail the conflicts between Russia and Turkey. As you can see at the following map, both Russia and Turkey are of strategic importance for the energy security of Eastern European countries.

Picture 8

Russia Turkey Eastern Europe

The countries of Western and Southern Europe have alternatives to the Russian natural gas and oil. They can import oil and natural gas from Algeria and Libya, through pipelines, but also with the use of ships from Saudi Arabia, Qatar, Iraq, Iran, Kuwait and the United Arab Emirates, which are among the largest producers and exporters of oil and natural gas in the world.

On the contrary it is very difficult for the countries of Eastern Europe to find alternatives to the Russian natural gas and oil. Therefore they have to pay higher prices and they are vulnerable to Putin’s political manipulations. Their main alternative is Norway, which has 2 trillion cubic meters of natural gas reserves, but Norway is facing a falling production due to overexploitation of her reserves and due to the aging of her gas fields. Their other alternatives are the UK, which already imports more natural gas than it exports, and has become a net importer, and the Netherlands, which have small reserves and also face a falling natural gas production.

For the natural gas production of the European Union see page 8 of the following table from an article of the American Congress, titled “Europe’s Energy Security: Options and Challenges to Natural Gas Supply Diversification”, August 2013. Figures are given in cubic feet, and they must be divided by 35 in order to be converted to cubic meters. As you can see it is only England and the Netherlands which have satisfactory production levels, but it is only the Netherlands which produces more than it consumes, making the Netherlands the only net exporter of natural gas in the European Union.

Picture 9

European Gas Production by Country

https://www.fas.org/sgp/crs/row/R42405.pdf

The article was written in 2013, and it refers to 2012, and it gives the Dutch production at 65 billion cubic meters (2.257 billion cubic feet). However the Dutch production has fallen, as you can read at the following Reuters article, titled “Dutch to cut output from huge Groningen gas field”, January 2014. The reason for the fallen production is that the Dutch are wary about the earth tremors that are taking place near their largest gas field, Groningen, which is also the largest gas field of Western Europe.

1st Paragraph

The Netherlands will cut gas production at Groningen, the largest gas field in western Europe, by about a quarter over the next three years, the Economics Ministry said on Friday, bowing to public concerns over earth tremors in the area.

 8th Paragraph

The ministry said production would be cut in 2014 and 2015 to 42.5 bcm and in 2016 to 40 bcm, adding that it was technically possible to reduce Groningen’s output to 30 bcm a year and still meet domestic demand.

http://www.reuters.com/article/2014/01/17/netherlands-gas-idUSL5N0KR1C820140117

At the 10th page of the Congress article I just mentioned, you can see a table with the dependence of the individual countries of the European Union on Russian natural gas. There are 6 countries of the EU which import 100% of their natural gas from Russia i.e. Estonia, Latvia, Lithuania, Sweden, Finland and Bulgaria. Please note that Lithuania recently built a floating LNG terminal in the Baltic Sea and now has a minor alternative.

Picture 10

European Dependence on Russian Gas

https://www.fas.org/sgp/crs/row/R42405.pdf

Norway, which is not a member of the European Union, also faces a falling oil and natural gas production, due to the aging of her oil and natural gas fields, as you can read at the following International Resource Journal, titled “Norwegian Oil and Gas: Managing Decline of a Sunset Industry”.

1st, 2nd , 3rd Paragraphs

With Norwegian production now passed its peak, oil and gas output is expected to drop rapidly within relatively few years, combined with the absence of major discoveries over the last decade,  this will present a considerable challenge for maintaining value creation and a sustainable level of activity on the Norwegian Continental Shelf.

The remaining resource potential is large but will this decline be adequately met by the commercialisation of many smaller finds in mature areas of exploration?
Opportunities for future output growth rest primarily on large new discoveries but this is an unlikely prospect at best. In light of this reality how is the Norwegian oil industry seeking to manage its decline?

http://www.internationalresourcejournal.com/features/june_09_features/norwegian_oil_and_gas.html

At the following Financial Times article, titled “UK warned over dependence on Qatar gas”, January 2012, you can read about the problems that England is facing due to the falling production of natural gas in Norway, England and the Netherlands. You can also read that England has to find alternatives, either in Russia or Qatar, and England is currently over dependent on Qatar for natural gas. The article says that so much dependence on Qatar is very risky for England, because Qatar can find better prices in Asia, but also because Qatar would cut supplies if a war in the Persian Gulf was to break out.

1st, 2nd , 3rd, 4th, 5th, 6th , 7th, 8th  Paragraphs

Britain’s dependence on Qatari liquefied natural gas has grown so stark that, last year, all but two cargoes of the product shipped into the UK came from the small Persian Gulf state.

The situation is about to get worse, analysts say, raising profound questions over UK energy security.

Not only is Iran threatening to cut off all Qatar’s LNG exports by blocking the critical Strait of Hormuz waterway, but even if that does not happen, the UK will be unable to rely so heavily on Qatar in the coming years.

Unlike other European nations, Britain has not guaranteed its LNG cargoes with long-term fixed contracts. Deutsche Bank calculates that only 24 per cent of the UK’s LNG coming from Qatar is secured under fixed contracts, meaning the rest can be diverted to the highest international bidder.

The Qatari gas the UK relies on has in part taken the place of more reliable gas from the UK’s own North Sea, whose production is quickly declining because of the age of the fields and dwindling investment.

In fact, Qatar’s supply to the UK grew 67 per cent from 2010 to 2011, according to the Department of Energy and Climate Change.

In contrast, the UK’s indigenous production has fallen at an average annual rate of 6.2 per cent since 2005.

Imports from Norway, Britain’s second-biggest foreign supplier after Qatar, fell 17 per cent from 2010 to 2011, and LNG from suppliers other than Qatar all but dried up amid increasing competition from rival customers, such as Argentina and South Korea.

http://www.ft.com/intl/cms/s/0/c403bec6-3f63-11e1-ad6a-00144feab49a.html

I must say that England’s energy dependence on Qatar is one of the reasons that England supports the Hamas, the terrorist organization that runs Gaza and attacks Israel. Hamas is funded by Qatar, and therefore England has to support Hamas, at least partially, in her conflicts with Israel. Another factor that explains the English support to Hamas is the billions of dollars that the Qataris have invested in England. You can read about the Qatari investments in England at the following Guardian article, titled “How much of London is owned by Qatar’s royal family?”, December 2014

http://www.theguardian.com/world/shortcuts/2014/dec/09/london-qatar-royal-family-regents-park-200m-palace-harrods

You can also read about Britain’s problems in finding energy sources at the following Oil Price article, titled “Britain Faces Difficult Winter Due to Tight Norwegian Natural Gas Supplies”, September 2013.

1st, 2nd, 3rd Paragraph

Britain is likely to face a tight winter for natural gas as it finds itself with few alternative sources of cheap natural gas, forcing it to rely heavily on Norwegian supplies, where production is already lower than normal.

The problem is that the Troll field, Norway’s largest natural gas field which produces 35 percent of the country’s natural gas output, has had to reduce its capacity for most of the year, and the field’s operator Statoil expects this lower production level to continue into next year.

Morten Eek, of Statoil, said that they “expect to see somewhat reduced capacity into the winter at the Troll field due to technical issues at Troll A.”

 6th, 7th and 8th Paragraphs

Britain has always been reliant on Norwegian imports, but this is set to increase as Russian gas is expected to go to continental Europe, and LNG imports from other countries will be sent to the Asian markets.

Should the Norwegian supplies fail to meet British demand, then more gas could be imported from Russia, but this will come at a high cost, as Russian prices are much higher than those offered by Norway. Russian gas would cost an estimated 74-78 pence per therm, compared with current UK prices of 65 pence.

Britain could also import LNG from places such as Qatar, but again, prices will be much higher as demand from Asia is high, and forces prices up. LNG would cost around $15.5 per million Btu, equivalent to 155 pence per therm.

http://oilprice.com/Latest-Energy-News/World-News/Britain-Faces-Difficult-Winter-Due-to-Tight-Norwegian-Natural-Gas-Supplies.html

Therefore it can be seen that there are many energy security issues in the European Union, and therefore both Russia and Turkey are of high strategic importance for the European energy security, but they are even more important when it comes to Central and Eastern Europe. Russia is very important because of her huge oil and natural gas reserves, and Turkey is very important because of her geographical location, which is the only way to connect the Middle East and the Caspian Sea to Europe with a pipeline network, in order to avoid the sea and reduce European dependence on Russia. When natural gas is sent in liquefied form (LNG) by ships it costs a lot more than natural gas supplied by pipeline networks.

The above situation increases the rivalry between Russia and Turkey, two countries which have been competing for regional hegemony during the last centuries, from the times of the Ottoman Empire and the Russian Empire. Today their rivalry manifests itself mostly in two regions. The first one is the region of Central Asia and the Caspian Sea. Russia and Turkey are competing for influence over Azerbaijan, Georgia, Armenia, Kazakhstan, Turkmenistan, and Uzbekistan, which are all ex-members of the Soviet Union, and they are all very important for what is called the Southern Energy Corridor, which is promoted by the EU, the US and Turkey. The Southern Energy Corridor means a lot more competition in Europe for the Russian oil and natural gas.

Turkmenistan is very rich in natural gas reserves, Kazakhstan is very rich in oil reserves, and Azerbaijan has some descent reserves of both oil and natural gas. Turkey wants to use the oil and natural gas of these countries, together with the reserves of Northern Iraq (Iraqi Kurdistan) and Iran, in order to supply the Southern Energy Corridor. Russia wants to prevent Turkey from sending this oil and natural gas to Europe. Turkey’s plans are supported by the EU and the US, and Russia’s plans are supported by many corrupt European politicians who are under Russian influence.

Picture 11

Competition for Russia

As you can see on the map, Azerbaijan is very important for the Southern Energy Corridor, and is backed by Turkey. In the past Azerbaijan had many military clashes with Armenia, which is a Russian satelite. The Southern Energy corridor is also the main cause of the military confrontations between Russia and Georgia. Azerbaijan and Georgia are two ex-members of the Soviet Union, and they both wish to join NATO. If the two countries were not afraid of Russian retaliations they would have already joined NATO. Azerbaijan is the first ex-member of the Soviet Union which dared to sell its natural gas to Europe without using Gazprom’s pipeline networks.

With red at the following map you can see the alliance between Turkey, Azerbaijan and Georgia, and with blue the alliance between Russia, Armenia and Iran. Russia and Turkey are also fighting diplomatic wars at the other side of the Caspian Sea, for the influence of the rich in natural gas Turkmenistan, and for the rich in oil Kazakhstan.

Picture 12

Georgia Azerbaijan Russia Turkey

As you can see at the above map, due to geographical factors, Turkey cannot support Kazakhstan and Turkmenistan as much as she can support Georgia and Azerbaijan. Both Turkmenistan and Kazakhstan have a motive to cooperate with Turkey, in order to send their natural gas and oil to Europe, reducing their dependence on China, which is currently their main customer, but also reducing their dependence on Russia.

However they have to be very careful when hurting Russia’s economic interests, because in the past the Russian President Vladimir Putin has openly threatened them in numerous occasions. In the past Russia did not hesitate to attack Georgia, in order to increase her military presence in South Ossetia and Abhazia, which you can see at the following map. Therefore Turkmenistan and Kazakhstan cannot rule out the possibility of a Russian military intervention in their territories.

Picture 13

South Ossetia Abhazia

On top of their indirect clash in the Azerbaijani-Armenian wars, in the past Turkey has helped the Chechen separatists in Russia, and Russia has helped the Kurdish separatists in Eastern Turkey (see red regions in the following map).

Picture 14

Chechnya Kurdistan

The Southern Energy Corridor is the reason there is so much tension in the Caucasus area, which you can see at the following map.

Picture 15

Cacausus

On top of the Armenia-Azerbaijani wars and the Chechen-Kurdish issue, Russia and Turkey are fighting in Syria and Iraq. Russia and Iran are supporting the Syrian dictator Bashar al-Assad, and Turkey, Qatar, Saudi Arabia and the UAE are supporting the Syrian rebels. Assad, the Syrian dictator, did not agree to the construction of the Qatar-Turkey pipeline, which would have to pass through Syria, while he agreed to the Iran-Iraq-Syria pipeline, which would have been constructed and managed by Gazprom, and which would bypass Turkey. For more information see “USA, Russia & China in the Middle East: Alliances & Conflicts”.

For the Qatar-Turkey and the Iran-Iraq-Syria pipeline see the green and red lines at the following map. Both pipelines would be mainly supplied by the South Pars/North Fields, which is the largest natural gas field in the world. It is located in the Persian Gulf and it is jointly owned by Qatar and Iran.

Picture 16

Qatar-Turkey Iran-Iraq-Syria

Moreover Russia and Turkey are facing each other in Eastern Mediterranean Sea, with Russia standing next to Israel and Cyprus. Israel and Cyprus have found natural gas reserves in their waters. Leviathan and Tamar are the two largest Israeli gas fields, and Aphrodite is the largest Cypriot gas field (see following map).

Picture 17

Natural Gas of Israel and Cyprus

For a very good article about the Israeli and Cypriot gas fields and the disputes between Israel, Cyprus and Turkey, with an exact map, see Foreign Affairs’ “Trouble in the Eastern Mediterranean Sea-The Coming Dash for Gas”, March 2013.

http://www.foreignaffairs.com/articles/139069/yuri-m-zhukov/trouble-in-the-eastern-mediterranean-sea

Syria, a very loyal supporter of Iran and Russia, also found off-shore natural gas fields, and gave Russia the exclusive right to exploit these gas fields, as you can read at the following Financial Times article, titled “Russia tightens links to Bashar al-Assad with Syria energy deal”, December 2013:

2nd and 3rd Paragraphs

The state-controlled Russian group Soyuzneftegaz and the Syrian regime this week signed a deal that allows for the exploration and drilling, development and production of oil and gas in a 2,190 sq km area off Syria’s coast, the first-such deal for the country.

It might be years before the deal is implemented, analysts said. But the concession, which is to span 25 years, further solidifies Moscow’s ties to Damascus ahead of a highly anticipated January conference in Switzerland in which the future of Syria may be negotiated.

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With much of Syria’s other oil reserves in the largely Sunni Muslim east and northeast of the country and currently under the control of rebel factions, the deal dangles the prospect of a potential source of revenue for President Bashar al-Assad’s Allawite co-religionists, which dominate the regime. It also gives Russia a stake in the scramble for Mediterranean energy reserves that already includes Israel, Lebanon, Turkey and Cyprus and other countries.

http://www.ft.com/intl/cms/s/0/9e8040e0-6e3f-11e3-8dff-00144feabdc0.html

For the agreement on the Iran-Iraq-Syria pipeline between Russia, Iran, Iraq and Syria you can read the following CNBC article, titled “How Vladimir Putin and Russia Hope to Win Big in Syria”, February 2013.

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“What Russia lost through the anti-Al-Assad alliance was the possibility to control the natural gas market across Europe and the means to shape events on the continent. In July 2011, Iran, Iraq, and Syria agreed to build a gas pipeline from the South Pars gas field in Iran to Lebanon and across the Mediterranean to Europe. The pipeline that would have been managed by Gazprom would have carried 110 million cubic meters of gas. About a quarter of the gas would be consumed by the transit countries, leaving seventy or so million cubic meters to be sold to Europe”.

Violence in Iraq and the Syrian civil war has ended any hope that the pipeline will be built, but not all hope is lost. 

http://www.cnbc.com/id/100496808#

Israel also gave Gazprom the exclusive right to purchase the natural gas of Tamar, which is Israel’s second largest gas field, as you can read at the following article of Sputnik News, a state owned Russian news agency, titled “Gazprom Signs 20-Year LNG Purchase Deal with Israel, February 2013.

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A subsidiary of Russian energy giant Gazprom has signed a 20-year deal with Levant LNG Marketing Corp. to exclusively purchase liquefied natural gas (LNG) from Israel’s Tamar offshore gas field in the Mediterranean, Gazprom said on Tuesday.

http://sputniknews.com/business/20130226/179690676.html

Moreover Russia and Cyprus are traditional allies, and Russia gave Cyprus a 3.5 billion dollar loan, which is a huge amount for the tiny Cypriot economy, guaranteeing Russia a major role in the Cypriot energy sector, as you can read at the following Commentator article, titled “Russia’s new Middle East energy game”.

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Discovered in 2009, the Tamar and Dalit offshore fields hold around nine trillion cubic feet (tcf) of gas. Due to come online in 2017, the Tamar LNG Project is expected to produce a cool three million metric tons of LNG annually. A multi-billion dollar floating LNG terminal is to be built near Cyprus to handle the conversion to LNG. And that will also bring into play gas piped from the island’s own Aphrodite field – another seven tcf.

That Moscow is in this for the long haul with its Israeli-Cypriot partners is plain enough. Moscow has already advanced a $3.5 billion loan and attempted to gain more leverage over Cyprus’ economic and energy assets during the recent bitter negotiations in the banking crisis.

http://www.thecommentator.com/article/3048/russia_s_new_middle_east_energy_game

 Therefore Russia became an important player in the natural gas sectors of Israel and Cyprus, two countries that have the potential of sending natural gas to Europe through Greece, bypassing Turkey. Please not that the Israeli natural gas is not completely controlled by Russia. It is an American energy company, namely Noble Energy, which is the main player in the Israeli gas fields.

Picture 18

East Med

I must also say a few more words about the relations between Russia and Israel. The radical Islamists that are supported by Turkey and Qatar are for Russia and Israel a common enemy, something which further strengthen the cooperation between the two countries. The two countries also have a motive to help the PKK, the Kurdish organization of Kurdish separatists in Turkey. See the following map.

Picture 19

Israel and Russia in Kurdistan

Actually it is easier for Israel than Russia to support the Kurds of the PKK, because Russia has a very close cooperation with Turkey in the energy sector, while the diplomatic relations between Turkey and Israel have completely collapsed. And Israel does indeed support the PKK, as you can read at the following article of the Turkish newspaper Today’s Zaman, titled “Israeli Herons give intelligence to PKK, intelligence officers say”, January 2012. The Turks claim that the Israelis supplied the Kurds of Turkey with the Herons unmanned aerial vehicles, in order for the Kurds to spy on Turkey. I do not know if it is true but it definitely sounds possible.

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According to reports by Turkish intelligence agencies, Heron unmanned aerial vehicles (UAVs) operated by Israel that have been observed in Hatay and Adana provinces in recent months spied for the terrorist Kurdistan Worker’s Party (PKK).

Turkish intelligence agencies prepared a report after the detection of two israeli herons in Hatay and Adana roughly two months ago, claiming that the Herons are collecting intelligence on Turkish military units in order to aid PKK operations in those regions.

http://www.todayszaman.com/diplomacy_israeli-herons-give-intelligence-to-pkk-intelligence-officers-say_268815.html

 Moreover, as you can read at the following Haaretz article, which is Israel’s oldest newspaper, titled “Netanyahu’s office distances itself from Lieberman’s planned measures against Turkey”, September 2011, Avidgor Lieberman, the ex Foreign Minister of Israel, said that Israel should support the PKK and Armenia in order to retaliate for Turkey’s support to Hamas in Gaza. Lieberman is a Russian Jew, who served in the Soviet Army and he has excellent relations with Russian officials. Lieberman’s party formed a coalition government with Netanyahu’s party in the previous elections, and Lieberman was Israel Foreign Minister when he said that. Lieberman’s party is mainly supported by the Israelis of Russian origin, who compromise 20% of Israel’s Jewish population.

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Israeli Prime Minister Benjamin Netanyahu’s office released on Friday a statement regarding Foreign Minister Avidgor Lieberman’s “plan” to take retaliatory steps against Turkey.

According to a report in Yedioth Ahronoth, Lieberman assembled a team in charge of retaliating against Turkey. According to the report, the team recommended to Lieberman that Israel should cooperate with the terrorist organization PKK (Kurdistan Workers’ Party) and even consider supplying it with weapons. Another suggestion was to offer assistance to the Armenians and file UN reports against Turkey for violating human rights of Turkey’s minorities.

http://www.haaretz.com/news/diplomacy-defense/netanyahu-s-office-distances-itself-from-lieberman-s-planned-measures-against-turkey-1.383561

I believe Lieberman’s statements were very strange, and I can only assume that he made them in order to increase his popularity in Russia, and his popularity among the Israelis of Russian origin. As you can read at the following Haaretz article, titled “After Turkey, PKK now also demanding apology from Israel”, September 2011, even the Prime Minister Netanyahu distanced himself from Lieberman, and even the PKK criticized Israel, and asked from Israel to apologize for its role in Ocalan’s arrest in 1999. Ocalan is the PKK leader and he is still held in a Turkish prison. In 1999, when Ocalan was arrested, Israel and Turkey were very close allies.

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The leader of the outlawed Kurdistan Workers’ Party has demanded that Israel apologize for its part in the capture of the PKK’s imprisoned leader Abdullah Öcalan in 1999 after a report that Israel was planning to use the PKK against Turkey, the Turkish newspaper Today’s Zaman reported on Monday.

http://www.haaretz.com/news/diplomacy-defense/after-turkey-pkk-now-also-demanding-apology-from-israel-1.384197

It is very normal for Israel to help the PKK, in order to retaliate for Turkey’s support to Hamas, but it is not normal for the Israeli Foreign Minister to say that openly. The only explanation is that Lieberman said that because it was convenient for his personal agenda.

However even though Israel can help the PKK in order to retaliate for Turkey’s support to Hamas, Israel could not support the PKK to a point that would endanger the Southern Energy Corridor, because that would make Israel and enemy of the United States and the EU. And even though Israel follows a more independent foreign policy than it did in the past, its survival still depends on the US. It is true that the Americans badly need Turkey and Iran for the Southern Energy Corridor, and they have in Qatar their largest military bases in the Middle East. And it is true that Turkey, Iran and Qatar are Israel’s three most dangerous enemies.

But that does not mean that the US has stopped believing in Israel’s survival. If Israel falls, the Americans will have to cooperate only with the corrupt socialist and religious regimes of the Middle East. The Americans know very well that they will never find an ally like Israel in the Middle East if Israel falls. As you can read at the following New York Times article, titled “Sale of U.S. Arms Fuels the Wars of Arab States”, April 2015, the Israelis have survived all these years because the Americans made sure that they had a technological advantage in military terms in the region. The article also says that due to the improvement in the relations between the Israelis and the Arabs, since they all perceive Iran as a common enemy, the Americans can allow the Arabs to buy more technologically advanced weapons.

In the 11th paragraph the article says that the Arabs want to buy the F-35, which is the most advanced American aircraft, but the Americans are hesitating to sell it to them because they worry about Israel’s survival.

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The United States has long put restrictions on the types of weapons that American defense firms can sell to Arab nations, meant to ensure that Israel keeps a military advantage against its traditional adversaries in the region. But because Israel and the Arab states are now in a de facto alliance against Iran, the Obama administration has been far more willing to allow the sale of advanced weapons in the Persian Gulf, with few public objections from Israel.

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Saudi Arabia spent more than $80 billion on weaponry last year — the most ever, and more than either France or Britain — and has become the world’s fourth-largest defense market, according to figures released last week by the Stockholm International Peace Research Institute, which tracks global military spending. The Emirates spent nearly $23 billion last year, more than three times what they spent in 2006.

Qatar, another gulf country with bulging coffers and a desire to assert its influence around the Middle East, is on a shopping spree. Last year, Qatar signed an $11 billion deal with the Pentagon to purchase Apache attack helicopters and Patriot and Javelin air-defense systems. Now the tiny nation is hoping to make a large purchase of Boeing F-15 fighters to replace its aging fleet of French Mirage jets. Qatari officials are expected to present the Obama administration with a wish list of advanced weapons before they come to Washington next month for meetings with other gulf nations.

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American intelligence agencies believe that the proxy wars in the Middle East could last for years, which will make countries in the region even more eager for the F-35 fighter jet, considered to be the jewel of America’s future arsenal of weapons. The plane, the world’s most expensive weapons project, has stealth capabilities and has been marketed heavily to European and Asian allies. It has not yet been peddled to Arab allies because of concerns about preserving Israel’s military edge.

But with the balance of power in the Middle East in flux, several defense analysts said that could change. Russia is a major arms supplier to Iran, and a decision by President Vladimir V. Putin to sell an advanced air defense system to Iran could increase demand for the F-35, which is likely to have the ability to penetrate Russian-made defenses.

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Congress enacted a law in 2008 requiring that arms sales allow Israel to maintain a “qualitative military edge” in the region. All sales to the Middle East are evaluated based on how they will affect Israeli military superiority. But the Obama administration has also viewed improving the militaries of select Arab nations — those that see Iran as a threat in the region — as critical to Israeli security.

http://www.nytimes.com/2015/04/19/world/middleeast/sale-of-us-arms-fuels-the-wars-of-arab-states.html?ref=middleeast&_r=0

At the following Business Insider article, titled “Biden says the US ‘has Israel’s back’ as he promises to deliver new F-35 fighter jets”, April 2015, you can read that the Americans are thinking about allowing the sale of F-35 to both the Israelis and the Arabs, in order for both of them to feel more secure about the American-Iranian rapprochement. But they are thinking about selling the F-35 first to the Israelis, and three years later to the Arabs, actually to United Arab Emirates, in order for the Israelis to still have an advantage over their Arab neighbors. Please note that the Americans do not want to sell it to Saudi Arabia, and they prefer to sell it to the United Arab Emirates instead.

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Seeking to ease U.S.-Israeli tensions, Vice President Joe Biden on Thursday promised Israel delivery of top-flight fighter jets next year to maintain its military edge and vowed that any final nuclear deal with Iran would ensure Israel’s security.

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Biden won applause from a pro-Israel audience when he told them the United States would begin delivery of Lockheed Martin’s new F-35 jets to its ally next year, making Israel the only country in the Middle East to have the new stealth warplane.

But he was met with silence when he reaffirmed U.S. support for a two-state solution to the Israeli-Palestinian conflict, an allusion to White House objections to Netanyahu’s comments last month casting doubt on his commitment to a Palestinian state.

http://www.businessinsider.com/biden-the-us-has-israels-back-as-new-f-35s-are-set-for-delivery-2015-4?nr_email_referer=1&utm_source=Sailthru&utm_medium=email&utm_term=Business%20Insider%20Select&utm_campaign=BI%20Select%20%28Wednesday%20Friday%29%202015-04-24&utm_content=BISelect

Therefore the significant improvement in the Russian-Israeli relations should not be seen as more important than it is, because it is only the Americans who can keep the Israelis alive, and because Iran is for Russia a much more important country than Israel. If Iran decides to sell its natural gas and oil to Europe it will significantly hurt Russia’s economic interests. Therefore the Israelis and the Russians can cooperate very well against their common enemy, which is the Islamists who are backed by Turkey and Qatar, but there is a limit to this cooperation because the Israelis need the Americans and the Russians need the Iranians.

As you can see at the following Wikipedia table Israel has a GDP (total income) of 300 billion dollars, and Saudi Arabia, the United Arab Emirates, Turkey and Iran have a total GDP of 2.4 trillion dollars. And that is without taking into account many other Arab and Muslim countries of the region. Therefore it is impossible for Israel to survive if the Americans do not make sure that the Israelis have a military technological advantage over the Arabs, the Persians and the Turks.

“List of countries by GDP (nominal)”

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GDP of Israel

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29

At the following table you can see the largest arms producing companies. You can see that most of them are American companies.

Picture 21

Arms Companies

http://www.sipri.org/research/armaments/production/recent-trends-in-arms-industry/ap-images/The%2010%20largest%20arms-producing%20and%20military%20services%20companies%20in%20the%20world%20excluding%20China-%202012.png/image_view_fullscreen

I mentioned the Kurdish PKK which operates in Eastern Turkey. There are many people who mistakenly believe that the US could use the PKK against Turkey, because of the problems that arose in the American-Turkish relations over Syria. However they are very wrong because this would destabilize the region and endanger the Southern Energy Corridor and it would be the greatest gift to the Russians. It is only the Russians and the Israelis who have a motive to support the PKK, but the Russians cannot overdo it, because they are working with Turkey in the energy sector, and the Israelis cannot overdo it either, because they need the Americans. Only if Turkey decided to block the Southern Energy Corridor the Americans would have a motive to help the PKK against the Turks. But the Turks are promoting the Southern Energy Corridor with all their might.

In Gaza, where Turkey is fighting a proxy war with Israel through the Islamists of Hamas, the Russians have to be somewhat neutral, because Iran, a Russian ally, is also supporting Hamas. Therefore Russia is definitely not supporting the Islamists of Hamas in Gaza, but she cannot go against Hamas either, because this would interrupt her relations with Iran, as you can read at the following Moscow Times article, tilted “Despite His Sympathy, Putin Is Unable to Support Israel Against Hamas”, July 2014.

You can read in the article that even though there are 1 million Israelis of Russian origin living in Israel, and even though Putin is the first Russian president who has not cultivated anti-Semitism in Russia, Russia cannot support Israel in its fight against Hamas, because for many years Iran has been supplying Hamas with arms. The article also mentions that Putin was the first Russian president to visit Israel, and that Russia does not consider Hamas to be a terrorist organization, as many other countries do, and that the leader of Hamas visited Russia in 2010.

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More than 1 million Russian and Soviet immigrants live in Israel today, forming a powerful political lobby. Unlike many former Russian leaders, Putin has not exhibited any signs of anti-Semitism during his time in office. On the contrary, he was the first Russian head of state to visit the country, and has demonstrated strong interest in Israel’s culture and its connections with Russia.

According to Satanovsky, Putin represents a new approach to the Jews.

“He is not a hostage to myths, and anti-Semitism does not interest him. He visited Auschwitz despite strong opposition from many political forces in Russia,” he said.

However, leaders of Hamas, considered a terrorist organization by most Western states, visited Moscow in 2006 after a personal invitation from Putin. Putin did not meet with its leaders at the time, but President Dmitry Medvedev met with Hamas’s political leader Khaled Mashal in Syria in 2010.

 Mashal was scheduled to pay another visit to Moscow this summer, but the trip was postponed due to the armed conflict in Israel, according to Yelena Suponina, head of the Asia and Middle East Center at the Russian Institute of Strategic Studies.

According to Suponina, Russia has been trying hard to refrain from embracing one side of the conflict in order to boost its influence in world affairs, given that it has much less resources at its disposal than the U.S.

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To straddle the interests of different powers, Putin also has to avoid upsetting Iran, analysts agreed.

Iran has been supplying Hamas with armaments and financial aid for years. Following the Monday cease-fire attempt, the Iranian-backed Hezbollah organization has already been sending more missiles to rearm Hamas in the Gaza strip, news website Wnd.com reported on Tuesday.

Russia has been opposing the imposition of U.S. sanctions against Iran over the country’s nuclear program. Iran is also one of the key supporters of the Syrian President Bashar Assad, who is also backed by Putin.  

http://www.themoscowtimes.com/news/article/despite-his-sympathy-putin-is-unable-to-support-israel-against-hamas/503466.html

However I must say that in 2010 both Qatar and Iran were trying to gain influence over Hamas, Iran by supplying arms and military support, and Qatar by supplying money. It was Qatar which finally gained most influence over Hamas, with Turkey supplying military support to Hamas. Hamas aligned itself with Turkey, Qatar in the Syrian war, and that interrupted relations between Iran and Hamas, without however totally alienating the two parties. After all it is both Qatar and Iran, together with Turkey, who want to attack Israel from the Gaza strip, and they therefore have a motive to cooperate in Gaza.

Also note that if Israel tries to send its natural gas to Europe through the East Med Pipeline, Russia would have a motive to align herself with Turkey, Qatar and Iran in Gaza, since the Israeli gas would also hurt Gazprom in Europe. It is true of course that the Israeli gas reserves are nothing compared to the Russian ones. However Russia could help Israel to sell its natural gas to Africa and Asia. Anyway, the general rule is that the Sunni Arab Islamists are a common enemy for Russia and Israel. Russia is also facing the threat of radical Islam in the countries of Central Asia but also from the Chechen separatists within Russia. Russia’s rivals in the oil and natural gas markets can use these radical Islamist groups against Russia.

I must also mention an article by the British Telegraph, titled “Iran ‘is intensifying efforts to support Hamas in Gaza”, April 2015, which mentions that Iran is once again sending millions of dollars to Hamas, in order to help the organization rebuild the tunnels that the Israelis destroyed during the Gaza war of 2014. In the 3rd paragraph you can read that the two old allies, Iran and Hamas, are leaving behind the differences that arose between them during the war in Syria. That’s very bad news for Israel of course, because Iran controls Hezbollah, the terrorist Lebanese organization that attacks Israel from the north.

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Iran has sent Hamas’s military wing tens of millions of dollars to help it rebuild the network of tunnels in Gaza destroyed by Israel’s invasion last summer, intelligence sources have told The Sunday Telegraph.

It is also funding new missile supplies to replenish stocks used to bombard residential neighbourhoods in Israel during the war, code-named Operation Protective Edge by Israel.

The renewed funding is a sign that the two old allies are putting behind them a rift caused by the conflict in Syria, where Shia Iran is backing President Bashar al-Assad against Hamas’s mainly Sunni allies.

Iran has sponsored Hamas’s military operations for years, despite thecontradiction that Hamas is part of the worldwide, Sunni-supremacist Muslim Brotherhood, while Iran is Shia.

Hamas’s leader, Khaled Meshaal, who left Damascus for Qatar after falling out with the Assad regime, has often fought with Hamas’s military wing over the strength of the Iranian connection.

However, with the Sunni Arab world joining forces against Iran, led by Saudi Arabia and President Abdelfattah el-Sisi of Egypt, who are both hostile to Hamas, the Palestinian militant group has been left little option but to accept the Iranian largesse.

http://www.telegraph.co.uk/news/worldnews/middleeast/iran/11515603/Iran-is-intensifying-efforts-to-support-Hamas-in-Gaza.html

The above is a summary about how Israel, Turkey and Russia interact in Gaza and the Middle East. Therefore, with her alliance with Syria, Iran, Cyprus and Israel against Turkey in the East Mediterranean Sea, Russia had agreed to construct and manage the Iran-Iraq-Syria pipeline, and she had also been involved in the off-shore natural gas fields of Syria, Israel and Cyprus (see following map).

Picture 22

Russia Israel Cyprus Syria

The Iran-Iraq-Syria and East Med Pipelines not only bypass Turkey as the absolute energy hub between Europe and the Middle East, but they are also direct competition for the Baku-Ceyhan pipeline, which exits in the Mediterranean Sea at the Turkish port of Ceyhan, as you can see at the following map (purple line).

Picture 23

Iran-Iraq-Syria and Baku Ceyhan

However it is not mainly for economic reasons that Russia decided to play a role in the Iran-Iraq-Syria and East Med pipelines. Russia has huge oil and natural gas reserves, and her main concern is how to promote her own reserves, and not how to promote the Iranian, Israeli and Cypriot ones. Russia wants to control the reserves of East Mediterranean in order to prevent others from taking control of them. A war in the region is not a bad scenario for Russia, because it will push oil and natural gas prices upwards, but it will also prevent the region from being connected to Europe. Therefore it is very important to remember that Russia is not there because she is interested in the natural gas of East Mediterranean Sea, since Russia has 48 trillion cubic meters of natural gas. Russia is there to prevent others from sending this natural gas to Europe.

Moreover by her involvement in the Iran-Iraq-Syria and the East Med pipelines Russia is making life for Turkey much harder, paying her back for promoting the Southern Energy Corridor, which hurts Russia’s interests in Europe. With her presence in the East Mediterranean Sea Russia is putting pressure on Turkey in order to choose the Russian natural gas over the Azerbaijani and Turkmen ones. Additionally if the pipelines of the East Mediterranean ever come to life, Russia will be a major player and will control prices. Russia could also use these networks to supply South European countries in case of a crisis in her relations with Ukraine and Turkey, as you can see at the following map.

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Ukraine Turkey Russia

As you can see on the above map, in order to supply Southern Europe, Russia needs either Ukraine or Turkey. Without these two countries the Russian natural gas cannot reach Southern Europe and the Balkans. The natural gas of Eastern Mediterranean could be an alternative for Russia in order to honour her contracts with Southern European countries (yellow line).

Moreover the Russian presence in East Mediterranean Sea is a threat for Turkey. That is if Turkey ever thinks about blocking the Russian natural gas. However the truth is that neither Turkey nor Russia want the natural gas of the East Mediterranean Sea to reach Europe, because it would bypass Turkey as an energy hub, and it would compete with the Russian natural gas and oil in Europe.

Finally, with her presence in the East Mediterranean Sea, Russia is putting pressure on Qatar, which is Russia’s most important rival in the natural gas markets. Russia is the largest exporter of natural gas in the world, and Qatar is the second largest. Actually if only liquefied natural gas (LNG) is taken into account, Qatar is the largest exporter in the world, because Russia mainly exports through pipelines. As you can see at the following map, Russia can use the natural gas of East Mediterranean Sea to reach South Asia, which is the market that Qatar is mainly selling at. If Qatar threatens Russia’s interests in Europe, Russia could retaliate by hurting Qatar’s interest in South Asia.

Picture 25

Russia Qatar

It is true of course that due to geographical factors, Qatar will always have an advantage over Russia in the markets of South Asia, in the same way that Russia will always have an advantage over Qatar in the European markets. However it is important to remember that Russia is not there for the natural gas of the region. Russia is there to prevent others from sending this gas to Europe, and maybe to send this gas to Africa and South Asia, since the Russian natural gas does not reach Africa and South Asia.

Russia and Turkey are also facing each other in Egypt and Libya. Qatar and Turkey backed the Muslim Brotherhood’s candidate in Egypt, Mohamed Morsi, who won the elections in 2012. With Morsi in power Egypt wouldn’t do anything to harm the Qatari and Turkish interests, because the Muslim Brotherhood is mainly funded and supported by Qatar and Turkey. But the Egyptian General al-Sisi, with the help of Saudi Arabia and United Arab Emirates, overturn Mohamed Morsi and came to power. With Sisi the Egyptian-Turkish relations collapsed, and the Egyptian-Russian relations flourished.

However Turkey and Qatar did not give up, and together with Sudan, they have formed an Islamist army in East Libya, which attacks Egypt and tries to overturn General Sisi. This army in East Libya is also supported by Iran. Iran prefers the Muslim Brotherhood than General Sisi, because the Muslim Brotherhood is currently an enemy of Saudi Arabia, and Saudi Arabia is Iran’s main rival. Saudi Arabia and Iran are two of the richest countries in the world in terms of oil reserves. For Saudi Arabia and Iran also see “The 21st Century War for Iran’s Oil”.

Turkey and Qatar also attack Egypt from the Sinai Peninsula in East Egypt, because Qatar and Turkey control Hamas, which is the Muslim Brotherhood affiliate that runs Gaza (see the following map).

Picture 26

East Libya Egypt

Picture 27

Sinai Peninsula

Picture 28

Gaza Egypt Sinai

A final, but minor difference between Russia and Turkey is the issue of the Crimean Tatars. During the Ukraine crisis of 2014 Russia annexed the Crimean Peninsula. This affects the Crimean Tatars, who are populations of Turkic origin. There are over 200 thousands Tatars in Crimea, accounting for 12% of the Crimean population. However the Tatars are not that useful for Turkey, and therefore Turkey would not want to open a new front with Russia over the issue of the Tatars.

Turkey cannot seriously hope to gain control of the Crimean Peninsula because of the Tatars, or they cannot seriously hope to prevent Russia from selling natural gas to Europe by using the Tatars. Therefore for the moment the Tatars are more of an ace in Turkey’s sleeve than a major difference between Turkey and Russia. For Crimea see the following map.

Picture 29

Crimean Tatars

However if at some point Turkey wishes to further isolate Russia from the international community, she could easily bring up the issue of the Crimean Tatars. At the following article of Hurriyet, a major Turkish newspaper, titled “Crimean Tatars and the Russian annexation of Crimea”, February 2015, you can read that the Crimean Tatars condemned Russia’s annexation of Crimea, and they are complaining that Turkey does not care for them as much as she cares for the Palestinians and the Syrians. The Tatars also expect Turkey to join the other Western countries on imposing economic sanctions on Russia, something that Turkey has not done so far.

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Shortly after the Euromaidan Revolution and former Ukrainian President Viktor Yanukovych’s ousting from power, Moscow organized a coup in Crimea on Feb. 27, 2014, installing a new local government in Simferopol and declaring a referendum on Crimea’s political future. The Crimean Tatar national assembly, the Qurultay, and its representative-executive body, the Meclis, categorically condemned the Russian annexation and boycotted the referendum.

Russian President Vladimir Putin promised rehabilitation for the Crimean Tatars, but they currently face risks to their security. Almost 20 Tatar men have been abducted or found dead since Crimea’s annexation.

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The Crimean crisis of 2014 created a foreign policy dilemma for Turkey, as Turkey grappled with balancing its NATO allegiance and loyalty to Crimean Tatar kin with its growing economic relations and strategic partnership with Russia. Thus, Turkey’s reaction to the Russian annexation of Crimea and support of the Crimean Tatars was subdued. Today, the Crimean Tatar diaspora, together with Turkish nationalists, protest that Turkey is paying less attention to the Crimean Tatars than to other human rights crises, such as those experienced by Palestinians and Syrians. 

 The Crimean Tatar diaspora demands that Turkey join the bandwagon of states that have applied economic sanctions to Russia. However, Turkey continues to engage with an increasingly isolated Russia, and hopes to use this leverage to demand improvements in the situation of the Crimean Tatars. 

 Because of interdependence between the two countries, Moscow is courting Ankara by making promises such as the “rehabilitation of the Crimean Tatars,” which seem inconsistent with other acts of the regime that are clearly detrimental to the Tatars’ well-being. Moreover, Russia would benefit from Turkish economic investments in Crimea. However, the Turkish-Russian rapprochement has limits. After all, although Turkish President Recep Tayyip Erdoğan tried, he could not prevent Crimean Tatar leader Mustafa Cemilev’s ban from Crimea. Sooner than we think, Turkey might need to downgrade its relations with Russia and conform to the EU policy of containing Russia.

While many realists bash the United States and the European Union for promoting democracy and enlarging NATO and the EU into the “sphere of influence” of Russia, the truth is that both the U.S. and EU neglected Ukraine and did not provide adequate financial and political resources for its transition to democracy. The U.S. and the EU have the responsibility to ensure the well-being of Ukraine and the Crimean Tatars. They cannot afford to forget Crimea.

http://www.hurriyetdailynews.com/crimean-tatars-and-the-russian-annexation-of-crimea.aspx?pageID=449&nID=77736&NewsCatID=396

The Crimean Tatars are right when they say that Turkey does not care for them as much as she cares for the Syrians and the Palestinians, because for Turkey Crimea is not as important as Gaza, Syria and Egypt. Another very good article about Turkey and the Crimean Tatars is the Canandian Broadcasting Corporation’s “Ukraine crisis: Why Turkey is silent as NATO operations ramp up” May 2014. In the article you can read that even though Turkey is a prominent NATO member, she has been quite on the issue of the Ukrainian crisis and the annexation of Crimea by Russia, because of the strong partnership between Russia and Turkey on the natural gas sector.

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The violence prompted the ever-vigilant U.S. Secretary of State John Kerry to call the troops to arms, saying these events are a “wake-up call” to NATO allies — because the West believes Russia is fomenting the unrest and stirring up the rebels in Ukraine.

But one ally is curiously keeping its distance — Turkey, a NATO member state since 1952 and Russia’s neighbour across the Black Sea with the potential to wield much influence with Moscow.In fact, Turkey recently agreed to increase its energy supply from Russia, while other countries are talking about scaling back.

 To be fair, Turkey has echoed the prevailing Western sentiment, calling for a diplomatic solution to the crisis and for Ukraine’s territorial integrity to be respected — but that was before the Crimean referendum, which directly impacted the Tatar minority (ethnically related to the Turks).

 The indigenous Tatars, which make up 12 per cent of the population in Crimea, have a history of strained relations with ethnic Russians in the region. They were expelled from Crimea by Joseph Stalin after the Second World War and only began to return in the 1980s. 

They fiercely opposed the annexation of Crimea, fearing a return of Russian rule. The Tatars boycotted the referendum, which ultimately resulted in the Crimean peninsula being parcelled off to Moscow.

Since then, Turkey has kept tight-lipped, largely due to domestic reasons, according to experts.

 We’ve seen the Turkish government be very quiet on this because Russia’s a very important trade partner,” said Bessma Momani, an associate professor at the Balsillie School of International Affairs at the University of Waterloo in Ontario. 

Russia is Turkey’s main import source —about $26 billion worth in 2012, with natural gas alone accounting for about $12 billion of the total. Russia also supplies nearly 60 per cent of Turkey’s energy demand. Last week, Turkey agreed to bring in more Russian gas through its Blue Stream pipeline, which enters via the Black Sea.

http://www.cbc.ca/news/world/ukraine-crisis-why-turkey-is-silent-as-nato-operations-ramp-up-1.2625991

At the following Guardian article, titled “Crimea’s independent Tatar TV news channel silenced by ‘red tape”, April 2015, you can read that Russia closed down the only Tatar channel of Crimea, which is also the only Tatar channel in the world. It is well known that Putin does not like news agencies that criticize his regime.

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Crimea’s only independent TV news channel, ATR, has been forced to stop broadcasting after the new authorities rejected its attempts to register for a licence.

ATR is also the only channel that broadcasts in the language of the Crimean Tatars, an ethnic minority that opposed Russia’s annexation of the peninsula in March 2014. Sixty per cent of the channel’s content was in Russian, 35% in Crimean Tatar and 5% in Ukrainian.

Although the official reason the channel wasn’t registered was mistakes in its paperwork, ATR’s director, Shevket Memetov, tied the forced closure to the channel’s occasionally critical coverage of life under Russian rule. Crimean Tatars have faced disappearances and police searches under the new government.

http://www.theguardian.com/world/2015/apr/01/crimeas-independent-tatar-tv-news-channel-silenced-by-red-tape

The above are the main conflicts between Russia and Turkey. Russia is opposing the Southern Energy Corridor which is backed by Turkey, and Turkey is opposing the Iran-Iraq-Syria and the East Med pipelines which are backed by Russia. Therefore the Russian-Turkish confrontations can be split in two major categories. The first one has to do with the Southern Energy Corridor i.e. the conflict between Armenia and Azerbaijan, the conflict between Russia and Georgia, the Russian support for the Kurdish separatists and the Turkish support for the Chechen separatists, and the diplomatic wars between Russia and Turkey for influence over Turkmenistan and Kazakhstan. The second one has to do with the natural gas of the Eastern Mediterranean Sea i.e. the conflicts in Syria, Iraq and Gaza in the Middle East, and the conflicts in Egypt and Libya in North Africa.

The above conflicts, together with the overlapping economic interests between Russia and Turkey, which I described in the introduction, are the geopolitical framework that must be used to examine the cancellation of the South Stream, and its replacement by the Turk Stream pipeline. However before examining the South and the Turk Stream pipelines, I would like to mention some very interesting articles for what I have said so far.

1) At the following Stratfor article, titled “Armenia and Azerbaijan Feel the Effects of the Ukraine Standoff”, January 2015, you can read that Russia has a very strong military presence in the Caucasus region. According to Stratfor, after defeating Georgia, Russia increased her military presence in the regions of South Ossetia and Abkhazia, and countered Georgia’s ambitions of joining NATO. Moreover with her alliance with Armenia, Russia forced Azerbaijan to follow a more balanced approach towards Russia and the West. The article also says that due to Azerbaijan’s increasing geostrategic importance, Azerbaijan managed to establish strong ties with Turkey, the US and the European Union, and is now a lot more confident than it used to be.

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Prior to the conflict in Ukraine, Russia was in a very strong position in the Caucasus region, which includes Armenia, Azerbaijan and Georgia. Russia’s defeat of Georgia in the August 2008 war countered Tbilisi’s efforts to join NATO, and Moscow expanded its military presence in the breakaway territories of Abkhazia and South Ossetia. Armenia, a longtime ally of Russia and the site of the Russian 102nd Military Base in Gyumri, had strengthened ties with Moscow in the security and economic spheres. Azerbaijan maintained a more independent and diversified foreign policy position because of its sizable energy resources and strategic location on the Caspian Sea. However, Russia’s military presence in the region and its alliance with Armenia effectively kept Baku in check, particularly since Russia is Armenia’s security guarantor in its ongoing conflict with Azerbaijan over the breakaway territory of Nagorno-Karabakh, which Azerbaijan lost in its 1988-1994 war with Armenia.

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Azerbaijan’s new importance has increased its leverage over Russia, a development that could explain the shift in the Nagorno-Karabakh theaterduring the past year. Violence in the region has escalated since the Ukraine crisis broke out, including a sharp spike in cross-border casualties in August 2014 and the downing of an Armenian helicopter by Azerbaijani forces in November. This appears to be a product of a renewed assertiveness by Azerbaijan, which may no longer feel as threatened by an Armenian — and, by extension, Russian — reprisal as it once did. This could also explain why Armenia has so far been subdued and cautious in responding to acts such as the helicopter downing; Yerevan knows that Russia’s focus is still very concentrated on the Ukrainian theater.

 That said, the uptick in violence does not mean that a return to full-scale military conflict between Azerbaijan and Armenia is looming. Russia still retains its military presence in Armenia, and Azerbaijan knows it cannot win a direct military confrontation with Russia, even considering Moscow’s current political and economic constraints. Instead, Baku has been testing the waters with a more limited engagement along the line of contact and with diplomatic maneuvering with key players like the European Union, the United States and Turkey. This strategy demonstrates Azerbaijan’s leverage to all parties involved and shows its ability to avoid making a commitment to any single country in what is still a very dynamic environment.

https://www.stratfor.com/analysis/armenia-and-azerbaijan-feel-effects-ukraine-standoff

2) At the following Bloomberg article, titled “Ukraine Clash Shows Azeris Who’s Boss as Russia Ties Bind”, November 2014, you can read that the Russian intervention in Ukraine, which is the largest diamond of the former Soviet Union, sent the other former Soviet members a clear message about who is the boss. The article means that the US and the EU did not support Ukraine as much as one would have expected.

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The nation, which provides the only westward route for central Asian oil bypassing Russia, has grown alarmed that Ukraine was left to fend for itself as President Vladimir Putin had his way in Europe’s biggest crisis since the Iron Curtain fell 25 years ago. That was a “very bad” signal, according to Elnur Soltanov, head of the Caspian Center for Energy and Environment, a research group focused on foreign policy in Baku.

“It told everybody who is the real boss in the region, who is the real hegemon,” he said. “Ukraine is the biggest jewel among the post-Soviet states and if Russia comes in broad daylight and occupies Ukraine and the Western world shows this limited reaction — it tells us that if something goes wrong with Russia, we shouldn’t trust anybody to come and save us.

http://www.bloomberg.com/news/articles/2014-11-21/ukraine-clash-shows-azeris-who-s-boss-as-russia-ties-bind

3) At the following Reuters article, titled “Turkmenistan inks deal with Turkey to supply gas to TANAP pipeline”, November 2014, you can read that Turkey wants TANAP to carry 16 billion cubic meters of natural gas per year, at the first stage, this number to increase to 23 billion by 2023, and finally to 31 billion by 2026.

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Turkmenistan has signed an outline deal with Turkey to supply gas to a new pipeline that could help Europe reduce its dependence on Russian gas imports.

The two countries struck a so-called framework agreement on Friday for Turkmenistan, which is keen to diversify exports of its gas to world markets, to supply gas to the proposed Trans-Anatolian natural gas pipeline project (TANAP).

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Erdogan and his Turkmen counterpart Kurbanguly Berdymukhamedov oversaw the signing of the agreement between Turkmen state gas company Turkmengas and private Turkish firm Atagas for the purchase and sale of Turkmen gas for TANAP.

The two sides did not disclose the terms of the agreement.

TANAP envisages carrying 16 billion cubic metres (bcm) of gas a year from Azerbaijan’s Shah Deniz II field in the Caspian Sea, one of the world’s largest gas fields, which is being developed by a BP-led consortium. TANAP’s capacity is set to rise to 23 bcm by 2023 and to 31 bcm by 2026.

TANAP will be built from the Turkish-Georgian border to Turkey’s frontier with Bulgaria and Greece. Its construction is expected to be completed by the end of 2018 in order to start deliveries of gas from Shah Deniz II in 2019. The preliminary cost of the pipeline has been estimated at $20 billion.

 Turkmenistan, a Central Asian nation of 5.5 million, holds the world’s fourth-largest reserves of natural gas. Since independence in 1991 the reclusive desert nation has sought to break its reliance on gas exports to former imperial master Russia.

Beijing supplanted Moscow as the main importer of the fuel after a China-bound pipeline was launched in 2009. Next-door Iran buys small volumes of Turkmen gas.

Watching with unease Turkmenistan’s plans to sell its gas to Europe, Russia has voiced concerns that a would-be gas pipeline to be laid in the shallow Caspian could harm the fragile ecology of the sea. (Reporting by Marat Gurt; Writing by Dmitry Solovyov; Editing by Mark Potter)

http://www.reuters.com/article/2014/11/07/turkmenistan-turkey-tanap-idUSL6N0SX2QK20141107

The article also mentions Russia’s objections on the construction of the Trans-Caspian pipeline, which can connect Turkmenistan and Azerbaijan through the Caspian Sea. However if Azerbaijan, Iran and Turkmenistan were to agree, the Turkmen natural gas could reach TANAP through Iran, as you can see at the following map.

Picture 30

TANAP Iran Turkmenistan Turkey

It is very difficult to say whether all these countries can work together. These countries have many differences, and many conflicting economic interests, but they also need each other because currently none of them have production levels that can satisfy Europe, in order to provide an alternative to Gazprom.

Azerbaijan’s natural gas reserves are less than 2 trillion cubic meters. Turkmenistan has 10 trillion cubic meters of natural gas reserves, and satisfactory levels of production, but it sends most of its production to China. The Iraqi Kurdistan has another 3 trillion cubic meters of natural gas, but in the near future it will not be able to send to Turkey more than 10 billion cubic meters of natural gas per year. Finally Iran, which is the second richest country in natural gas reserves in the world, has very low levels of production, because its natural gas industry is underdeveloped due to many years of economic sanctions imposed on Iran by the West. Actually sometimes Iran has to import natural gas to cover the Iranian internal demand. In the oil industry Iran does much better.

4) It is also important to say that there is some confusion about the exact level of Azerbaijan’s natural gas reserves. They are somewhere between 1.25 and 2.50 trillion cubic meters. It is claimed that some of Azerbaijan’s natural gas reserves are not recoverable. According to the Azerbaijani government the country holds 2.6 trillion cubic meters of natural gas, as you can read at the following Azernews article, titled “Reserves allow Azerbaijan’s gas industry to develop for over 100 years”, September 2013.

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The Industry and Energy Ministry announced that currently the country’s proven gas reserves are at the level of 2.6 trillion cubic meters, while the oil reserves amount to 2 billion tons.

http://www.azernews.az/oil_and_gas/59062.html

Azerbaijan’s reserves are very important because Azerbaijan is a NATO friendly country that is already cooperating with Turkey, and therefore it is the first supplier of the Southern Energy Corridor. However it is clear that the Azerbaijani natural gas is not a satisfactory alternative to the 48 trillion cubic meters of Russian natural gas. And that’s true even if the government of Azerbaijan is right, and if Azerbaijan indeed holds 2.6 trillion cubic meters of natural gas.

5) At the 1st, 2nd and 3rd paragraphs of the following Reuters article, titled “Turkey, Iraqi Kurdistan clinch major energy pipeline deals”, November 2013, you can read that Turkey has signed multibillion dollar agreements with the Iraqi Kurds, for the construction of oil and natural gas pipelines, which will export the oil and natural gas of Iraqi Kurdistan to Turkey and Europe.

http://www.reuters.com/article/2013/11/06/us-turkey-iraq-kurdistan-idUSBRE9A50HR20131106

Picture 31

Kurdistan Iran TANAP

6) At the following Hurriyet article, titled “Turkey, Iraqi Kurdistan agree on 50-year energy accord”, June 2014, you can read that Turkey and the Iraqi Kurds have signed a 50 year agreement for cooperation in the oil sector.

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Turkey and the Kurdistan Regional Government (KRG) have signed a 50-year deal to export Kurdish oil, the prime minister of the administration has announced amid the ongoing spat between Baghdad and Arbil.

“We have signed an energy deal with Turkey that comprises of 50 years and can be extendable if necessary,” Nechirvan Barzani said June 4 during a speech at the Kurdish Parliament in Arbil. 

Relations between Arbil and Baghdad have been strained by disputes over the sale of northern Iraqi oil through Turkey. 

The central government insists it has the sole right to export Iraqi crude and says contracts between Kurdish authorities and foreign energy firms without its expressed consent are illegal, statements Arbil rejects.

Hussein al-Shahristani, Iraq’s deputy prime minister for energy affairs, has threatened legal action against firms that purchase what he called “smuggled oil,” which Turkey started to export through its territory last week. Turkish Energy Minister Taner Yıldız dismissed claims that Ankara was trying to illegally profit from the exports.

http://www.hurriyetdailynews.com/turkey-iraqi-kurdistan-agree-on-50-year-energy-accord.aspx?pageID=238&nID=67428&NewsCatID=348

7) At the following Reuters article, titled “Turkmenistan inks deal with Turkey to supply gas to TANAP pipeline”, November 2014, you can read about the agreement between Turkey and Turkmenistan, according to which Turkmenistan will supply TANAP with some given quantities of natural gas for the next years.

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“The two countries struck a so-called framework agreement on Friday for Turkmenistan, which is keen to diversify exports of its gas to world markets, to supply gas to the proposed Trans-Anatolian natural gas pipeline project (TANAP).

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Erdogan and his Turkmen counterpart Kurbanguly Berdymukhamedov oversaw the signing of the agreement between Turkmen state gas company Turkmengas and private Turkish firm Atagas for the purchase and sale of Turkmen gas for TANAP”

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“TANAP envisages carrying 16 billion cubic metres (bcm) of gas a year from Azerbaijan’s Shah Deniz II field in the Caspian Sea, one of the world’s largest gas fields, which is being developed by a BP-led consortium. TANAP’s capacity is set to rise to 23 bcm by 2023 and to 31 bcm by 2026.

However, to join the pipeline Turkmenistan will have to lay another pipeline across the Caspian Sea.

Asked how Turkmenistan could join the TANAP project, Atagas head Osman Saim Dinc told Reuters: “We are working on all alternative routes.” He did not elaborate.

TANAP will be built from the Turkish-Georgian border to Turkey’s frontier with Bulgaria and Greece. Its construction is expected to be completed by the end of 2018 in order to start deliveries of gas from Shah Deniz II in 2019. The preliminary cost of the pipeline has been estimated at $20 billion

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“Turkmenistan, a Central Asian nation of 5.5 million, holds the world’s fourth-largest reserves of natural gas. Since independence in 1991 the reclusive desert nation has sought to break its reliance on gas exports to former imperial master Russia.

Beijing supplanted Moscow as the main importer of the fuel after a China-bound pipeline was launched in 2009. Next-door Iran buys small volumes of Turkmen gas.

Watching with unease Turkmenistan’s plans to sell its gas to Europe, Russia has voiced concerns that a would-be gas pipeline to be laid in the shallow Caspian could harm the fragile ecology of the sea. (Reporting by Marat Gurt; Writing by Dmitry Solovyov; Editing by Mark Potter)”.

http://www.reuters.com/article/2014/11/07/turkmenistan-turkey-tanap-idUSL6N0SX2QK20141107

 8) At the following Financial Times article, titled “Azerbaijan and Turkey ties bolstered by energy and political solidarity”, September 2014, you can read about the very good relations between Turkey and Azerbaijan, due to their cooperation in the oil and natural gas sectors.

http://www.ft.com/intl/cms/s/0/b11e1bec-10fa-11e4-b116-00144feabdc0.html

9) At the following article of the Turkish newspaper Today’s Zaman, titled “Turkey, Georgia to keep good relations under Margvelashvili presidency”, October 2013, you can read about the very good relations between Turkey and Georgia. According to the article the Baku-Tbilisi-Ceyhan (BTC) and the Baku-Tbilisi-Erzurum (BTE) pipelines are only two of the many economic partnerships between the two countries. The article also mentions Georgia’s strategic importance for Turkey, because Georgia can isolate Armenia, which is backed by Russia and Iran (see following map).

http://www.todayszaman.com/diplomacy_turkey-georgia-to-keep-good-relations-under-margvelashvili-presidency_330010.html

Picture 32

Georgia

10) At the following CNN article, titled “2008 Georgia Russia Conflict Fast Facts”, March 2014, you can read about the last war between Russia and Georgia in 2008.

http://www.cnn.com/2014/03/13/world/europe/2008-georgia-russia-conflict/

11) At the following Natural Gas Europe article, titled “In Search of New Partners: Putin’s Turkish Stream for Turkey”, February 2015, you can read that Turkey and Russia have been fighting for regional dominance for the last 500 years, but after 1984 the relations between the two countries improved because of their cooperation in the natural gas sector. However after the collapse of the Soviet Union the relations of the two countries deteriorated because Turkey was supporting the Chechen separatists in Russia, and Russia was supporting the Kurdish separatists in Eastern Turkey, but also because of their differences over Cyprus and Syria.

The article also says about the plan for the construction of the Blue Stream 2, which would transfer Russian natural gas to the Middle East and Africa through Turkey and Israel. This plan was abandoned after the collapse of the Turkish-Israeli relations. According to the article, despite the close cooperation between Russia and Turkey on the energy sector, the issue of the Nabucco and TANAP pipelines came up, which offered Turkey the opportunity to become an independent energy hub.

http://www.naturalgaseurope.com/new-partners-putin-turkish-stream-turkey

12) At the following Natural Gas article, titled “Southern Gas Corridor: The Dilemma of Azerbaijan Energy Policy”, February 2015, you can read that the shareholders of TANAP are SOCAR (68%), the state owned company of Azerbaijan, BOTAS (15%), a Turkish state owned company, TPAO (5%), another Turkish state owned company, and BP (12%), the British multinational. These are the shareholders of the TANAP project at the beginning of 2015. SOCAR is willing to sell some more shares and therefore the shares held by SOCAR might change in the future. I guess what SOCAR wants is to keep 51% of the shares.

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Turkey is more interested in natural gas of Iran and Turkmenistan for the TANAP project. Thus, the formation of cooperation with these countries in the energy field will help Turkey’s gas import diversification policy. Therefore, the dispatch of Iranian gas via Trans Anatolian Natural Gas Pipeline (TANAP), which will be actualized with the collaboration between Turkey and Azerbaijan has gained strategic importance in Ankara’s energy policies. Taner Yıldız, the Minister of Energy and Natural Resources of Turkey, stated that the Iranian gas will be an important supply source for Europe (The TEPAV – BP Energy Forum, February 26, 2014). Such a development is expected to be up to the completion of the TANAP project in 2018, if the sanctions against Iran are lifted. Iran could transfer gas from Azerbaijan and Turkmenistan to Europe, said the international affairs director of the National Iranian Gas Company.

 The EU Commission and Turkey are active in negotiating with Turkmenistan regarding deliveries of Turkmen gas into a projected Trans-Caspian Pipeline (TCP) to be connected via TANAP to Europe. Turkmenistan offers up to 40 bcm per year of gas to be fed into the Southern Corridor. The Turkmen leadership is interested in selling larger volumes on the European market and identifying a collective buyer for these quantities. Apparently, there is a conflict of interests between Azerbaijan and Turkey, in the issue of the gas transit to Europe. The main reason is that, Azerbaijan Energy Company SOCAR is opposed to Turkmen and Iranian gaz.

 Azerbaijan’s ruling party’s purpose of protecting its own interests, and also Western and Eastern balancing policy of Baku, is jeopardizing the future of the Southern Gas Corridor. Firstly, the main reason of Azerbaijan’s opposition to the gas of Iran for TANAP project, despite insufficiency of its own gas, is Russia. In this way, Azerbaijan is preventing harm of Russia’s energy transit policy in Europe. Because the gas of Iran will pose a serious threat for the Russian gas in Europe. In bypassing Iran, Azerbaijan intends to get rid of the Russia’s pressure.

 Baku is turning the South Gas Corridor into a political bargaining project with Russia and the West. Secondly, the selection of TAP over NABUCCO was not only a commercial, but also a political decision as Russia put Azerbaijan under immense pressure to withdraw from NABUCCO in order to allow its competitor Turkish Stream to be built. Baku faced both political and commercial challenges because Gazprom gave a significant discount to its European customers in 2013. This was a significant bargaining chip for potential customers of the Shah Deniz Consortium. The selection of TAP over NABUCCO was a disappointment for the Central and East European countries of Romania, Bulgaria, Hungary, Slovakia and Moldova. 

http://www.naturalgaseurope.com/southern-gas-corridor-azerbaijan-energy-policy-7719

13) At the following article of the World Tribune, titled “Post-Gadhafi Libya Now a Jihadist Springboard Backed by Iran, Qatar, Sudan and Turkey”, March 2015, you can read that Turkey, Qatar, Sudan, and Iran support an Islamic army in East Libya, in order to attack and overthrow General Sisi.

http://www.worldtribune.com/2015/03/02/post-gadhafi-libya-morphs-country-jihadist-springboard-backed-iran-qatar-sudan-turkey/

 In the 8th paragraph of the World Tribune article you can read that once the war in Libya broke out, Iran and Sudan were among the first ones to arrive, through their presence in Hezbollah and Hamas. In the 70th paragraph you can read that Turkey and Qatar used Qaddafi’s armaments in order to equip various African Islamist organizations, like the terrorist organization Boko Haram, which operates in North Nigeria, Niger, Chad, and Cameroon. Please note that Mali and Niger are very rich in Uranium, and Nigeria is very rich in oil and natural gas.

Picture 33

Boko Haram

Also note that through the Trans-Saharan pipeline (red lines lines at the following map), Nigeria will connect to Algeria and supply Europe with one more source of natural gas. Algeria is already connected to Europe through pipelines.

Picture 34

Libya Algeria

As you can see at the following table from the Energy Information Administration, Nigeria and Algeria are the 9th and 10th richest countries in the world in terms of natural gas reserves.

Picture 35

Algeria Nigeria

http://www.eia.gov/countries/analysisbriefs/Iran/iran.pdf

Obviously connecting Algeria and Nigeria through the Trans-Saharan pipeline hurts the interests of Qatar, Iran and Turkey, unless of course they manage to control Algeria through the Islamists, which is not currently the case. By arming Boko Haram, Qatar and Turkey can use this organization to control the connection between Algeria and Nigeria.

14) At the following International Business Times article, titled “How The ISIS Allegiance Application Process Works For Groups Joining The Caliphate Like Boko Haram”, March 2015, you can read that the leader of Boko Haram announced his loyalty to ISIS.

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On Saturday, Boko Haram leader Abubakar Shekau released an audio recording declaring his loyalty to ISIS caliph Abu Bakr al-Baghdadi, but there was no official alliance until now. The formal acceptance, contained in a message purporting to be from ISIS spokesperson Mohammad Al-Adnani, changes the picture. Dozens of jihadist groups around the world have professed their allegiance to al-Baghdadi, but ISIS maintains a strict application process in order to be officially considered one of the so-called caliphate’s wilayat (provinces) and receive ISIS support.

http://www.ibtimes.com/how-isis-allegiance-application-process-works-groups-joining-caliphate-boko-haram-1845560?ft=3aj78&utm_medium=Mar_13_2015_0827_200185&utm_source=TailoredMail&utm_term=%20Boko+Haram+Allegedly+Passes+ISIS+Application+Process&utm_campaign=Mar_13_2015_0827

15) At the following article of the Guardian, titled “UAE and Egypt behind bombing raids against Libyan militias, say US officials”, August 2014, you can read that Egypt and the United Arab Emirates bomb the Islamists in East Libya.

http://www.theguardian.com/world/2014/aug/26/united-arab-emirates-bombing-raids-libyan-militias

16) At the following Reuters article, titled “Egypt blasts Turkish leader Erdogan after U.N. speech”, September 2014, you can read that Egypt accuses Erdogan, the Turkish President, of supporting international terrorism.

http://www.reuters.com/article/2014/09/25/us-egypt-turkey-idUSKCN0HK0TH20140925

17) A long but very good article about the relations between Turkey and Egypt, which also affect the relations between Russia and Turkey, is Foreign Affairs’ “Turkey and Egypt’s Great Game in the Middle East”, March 2015. In the 3rd paragraph the article says about the problematic relations between Egypt and Turkey, which became even worse when Egypt decided to bomb the army of the Islamic State in Libya.

http://www.foreignaffairs.com/articles/143231/soner-cagaptay-and-marc-sievers/turkey-and-egypts-great-game-in-the-middle-east?cid=nlc-foreign_affairs_today-030915-turkey_and_egypts_great_game_i_5-030915&sp_mid=48184637&sp_rid=aWFrb3ZvczEwMDBAeWFob28uZ3IS1&nocache=1

 18) At the following Al Monitor article, titled “Russian Recognition of Armenian Genocide Strains Ties with Turkey”, April 2015, you can read that in April 2015 Putin used the world “genocide” to refer to the killing of the Armenians by the Turks in 1915, and Erdogan said that this was a personal insult to him. Normally Turkey withdraws her ambassadors from the countries that recognize the mass killings of the Armenians by the Turks as a genocide, but Erdogan did not dare to do that with Russia, due to the close cooperation between the two countries in the energy sector. In the article you can read that Erdogan said that Russia should focus on what the Russians did in Ukraine. Erdogan refers to 1933, when Stalin confiscated the crops of the Ukrainian people and let them died from hunger, because they were not obedient enough. Many people refer to the starvation of the Ukrainian people in 1933 as a genocide and that’s what Erdgogan was talking about.

http://www.al-monitor.com/pulse/originals/2015/04/turkey-russia-armenia-ties-lost-magic.html

It is not of course a coincidence that on April 2015 it was the first time that Putin used the word “genocide”, and that the TANAP project started in March 2015. Besides Armenia is a Russian ally, and that’s the reason the Turks killed so many Armenians, and deported many others from their lands in 1915. During the First World War 1914-1918 the Turks believed that the Armenians, who were not Muslims but Christians, would help the Russians. And they were probably right.

As you can see at the following map, Turkey (Ottoman Empire) and Russia (Russian Empire) had common borders during the First World War, but they were in opposite camps.

Picture 36

Map of Europe 1900

At the following map you can see the Ottoman Empire at her peak, during the period of 1480-1550. With yellow you can see the traditional Armenian homeland. An alliance between the Russian and the Armenians was a great threat for the Turks during WW1, since both the Turks and the Russians wanted to control the Caspian Sea and the oil of Baku. At the time the oil of Kazakhstan had not been discovered yet. Therefore the Turks either killed the Armenians or they relocated them to Syria, where they could not help the Russians.

Picture 37

Armenian Homelnad

Turkey’s Energy Dependence on Russia

Before examining the issue of the Turkish Stream pipeline I would like to examine in more detail Turkey’s dependence on Russian natural gas. As you can read at the following Al Monitor article, titled “What will Turkey do if Russia turns off gas”, September 2014, Turkey imports 45 billion cubic meters of natural gas every year, 26 of which are imported from Russia. The Russian natural gas reaches Turkey through the Black Sea and through Ukraine.

The Blue Stream pipeline connects Russia and Turkey through the Black Sea. The Blue Stream can send to Turkey 16 billion cubic meters of Russian natural gas every year. The Trans-Balkan pipeline connects Russia and Turkey via Ukraine, Moldova, Romania and Bulgaria, sending another 16 billion cubic meters of Russian natural gas to Turkey every year. For the Blue Stream pipeline and the Russia-Ukraine-Moldova-Rumania-Bulgaria-Turkey pipeline see the blue and red lines at the following map.

Picture 38

Russian Pipelines to Turkey

Please note that the Trans-Balkan natural gas pipeline should not be confused with the Burgas-Alexandroupolis oil pipeline, which is sometimes referred to as Trans-Balkan oil pipeline. For the Trans-Balkan natural gas pipeline see the following article of the Energy Information Administration, titled “16% of natural gas consumed in Europe flows through Ukraine”, March 2014, which includes the following map.

Picture 39

 Trans-Balkan Pipeline

http://www.eia.gov/todayinenergy/detail.cfm?id=15411

The crises in the Russian-Ukrainian relations do not pose a threat for the natural gas supplies that reach Turkey through the Black Sea and the Blue Stream, but they pose a great threat for the supplies that reach Turkey through Ukraine. The main reason for the conflicts between Russia and Ukraine is that the Ukrainians have a lot of bargaining power over Russia, because a large part of the Russian natural gas travels through Ukraine before it reaches its final destination. Therefore the Ukrainians always ask for better prices from the Russians and this causes a lot of tensions in the Russian-Ukrainian relations.

In the past, during the Russian-Ukrainian crises, the Russians have turned off the supply of natural gas to Ukraine, and this has left many other European countries without natural gas. Turkey was one of these countries. As you can read at the Al Monitor article that I mentioned above, the Russian-Ukrainian crises are a very big problem for Turkey, because Turkey does not have an internal network which can transfer natural gas from Central Turkey to Western Turkey.

But even if there was such a network, connecting Ankara to the European part of Turkey, the Blue Stream would not have the capacity to do the job. The Blue Stream has an annual capacity of 16 billion cubic meters and that’s not enough for Turkey. Russia has promised Turkey to increase the annual capacity of the Blue Stream by 2-3 billion cubic meters per year, but this has not happened yet.

The South Stream and the Turk Stream pipelines would eliminate Turkey’s dependence on Ukraine, given that both of them bypass Ukraine. Both of them were supposed to carry 63 billion cubic meters, which is a lot more than the 15-20 billion cubic meters required by the western part of Turkey.

Picture 40

Marmara

The above map shows Turkey’s geographical regions. You can see on the map the region of Marmara, which imports Russian natural gas from Ukraine, and which is very sensitive to crises between Russia and Ukraine. Central and Eastern Anatolia are more secure because they import Russian natural gas through the Blue Stream, and they are also near Azerbaijan, Northern Iraq and Iran, which are countries very rich in oil and natural gas reserves.

Picture 41

Turkey Natural Gas

I suggest that you read the whole Al Monitor article. It is a very good article.

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Before we answer the question, let’s see how much gas Turkey imports from Russia. Last year, Turkey imported a total of 45 billion cubic meters (1.6 trillion cubic feet) of gas, including 26.6 billion cubic meters (939 billion cubic feet) from Russia. Two gas conduits carry gas from Russia to Turkey: the Blue Stream, which runs under the Black Sea to the Turkish port city of Samsun and has an annual capacity of 16 billion cubic meters (565 billion cubic feet), and the Western pipeline, which reaches Turkey via Ukraine, Romania and Bulgaria, has a capacity of 14 billion cubic meters (494 billion cubic feet) and is vital for Istanbul.

The crisis between Russia and Ukraine poses no risk to the Blue Stream, but may affect the Western pipeline. Russia has already cut gas supplies for Ukraine over its $5.15 billion gas debt.

 

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But if Russia shuts down the pipeline, Istanbul and the Marmara region would face disaster, for no conduit exists inside Turkey to re-route gas coming from eastern suppliers to the northwest of the country. In other words, Turkey lacks the means to send Azeri and Iranian gas to the Marmara region, where both residential buildings and industrial facilities are supplied via Ukraine by the Western pipeline, which last year carried 10 billion cubic meters of gas to the region.

The only remaining option would be to use liquefied natural gas (LNG). However, Turkey lacks the capacity to process large amounts of LNG and would have to increase the number of entry points and facilities. Currently, Turkey has only two plants to gasify LNG and pump it to the gas network — one in Silivri, near Istanbul, and another at Aliaga, on the country’s western coast.

 Turkey faces another major problem: It is able to store only 5% of the gas it consumes, the lowest storage capacity in Europe. That’s the reason why Turkey is seen as the country most vulnerable to a possible cut in supplies. Hungary, Austria and Slovakia, for instance, have a storage capacity of 50%, while France, Germany and Italy are able to store more than 20% of what they consume.

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Now, back to what precautions Turkey is taking against the worst-case scenario. First, it is securing alternative supplies. Last week, it sealed a deal with Qatar for 1.2 billion cubic meters (42 billion cubic feet) of LNG, in addition to plans to increase LNG imports from Nigeria and Algeria. The available storage facilities have been filled as a contingency measure for the winter.

http://www.al-monitor.com/pulse/originals/2014/09/turkey-russia-ukraine-european-union-natural-gas-tanap.html

The South and the Turk Stream Pipelines

The South Stream pipeline would transfer Russian natural gas to Europe through the Black Sea and Bulgaria, as you can see at the following map.

Picture 42

South Stream

The South Stream would have two main legs. The first leg would supply Southern Europe through Greece, and the second leg would supply Central Europe through Serbia. The South Stream would have an annual capacity of 63 billion cubic meters. The cost of the South Stream was estimated at 10 billion dollars in 2006, when the project was initially announced, but by 2014 this estimate had increased to 40 billion dollars.

Satisfying strict European environmental regulations was one of the main reasons that led to increasing cost estimates. You can read about the cost of the South Stream at the following article of the Oxford Energy Institute, from Oxford University, titled “Does the cancellation of South Stream signal a fundamental reorientation of Russian gas export policy”, January 2015.

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From 2008-10, Russia signed intergovernmental agreements with seven European countries for the onshore section(s). The routes of the two onshore pipelines changed over time as the project encountered increasing national and EU regulatory challenges. The total cost of South Stream (for the full 63 Bcm/year of capacity) was estimated at around $40 billion in mid-2014, comprising: $17 billion for the Russian Southern corridor; $14 billion for the offshore section and $9.5 billion for the onshore European sections.

http://www.oxfordenergy.org/wpcms/wp-content/uploads/2015/01/Does-cancellation-of-South-Stream-signal-a-fundamental-reorientation-of-Russian-gas-export-policy-GPC-5.pdf

In December 2014, the Russian president Vladimir Putin announced the cancellation of the South Stream, and its replacement with the Turk Stream, as you can read at the following Reuters article, titled “Gazprom, Turkey’s Botas could build 63 bcm undersea gas pipeline: Gazprom CEO”, December 2014:

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Russia’s Gazprom and Turkey’s Botas have signed a memorandum to build an undersea pipeline to Turkey with an annual capacity of 63 billion cubic meters, Gazprom CEO Alexei Miller said on Monday.

He said 14 bcm out of the total volume would go to Turkey, equivalent to roughly the volume it currently buys.

Separately, Russian Energy minister Alexander Novak said that Turkey was seeking a 15 percent discount for Russian gas. President Vladimir Putin said on Monday that Turkey would get a 6 percent discount starting next year.

http://www.reuters.com/article/2014/12/01/us-russia-gas-turkey-pipeline-idUSKCN0JF33D20141201

As you can read at the article, the Turkish Stream will be a partnership between Gazprom, the state controlled Russian energy company, and BOTAS, the state-controlled Turkish energy company. The Turk Stream will have an annual capacity of 63 billion cubic meters i.e. the same with the South Stream pipeline that the Turk Stream is supposed to replace. According to Reuters, Western Turkey will consume 14 billion cubic meters of this natural gas, and the remaining 49 billion will be exported to Europe. Turkey currently receives 14 billion cubic meters of Russian natural gas through Ukraine. If the Turk Stream, the South Stream or TANAP are ever built, Turkey will not depend on Ukraine anymore. According to Reuters, Turkey was asking for a 15% discount on natural gas prices in order to agree to the Turk Stream, and Russia offered 6%. However negotiations are not over yet and Turkey is still asking for higher discounts.

Even though the South Stream and the Turk Stream have the same capacity, the Turk Stream is a humble project when compared to the South Stream. Both the Turk and the South Stream would cross the Black Sea. The South Stream would exit in Bulgaria and the Turk Stream would exit in Turkey. However Turkey will be the end of the road for the Turk Stream, while Bulgaria would have only been the beginning for the South Stream.

According to the plan Gazprom will take the Turk Stream to the Turkish-Greek borders and leave it there. European countries will have to find a way to reach the natural gas of the Turk Stream. On the contrary Gazprom would take the South Stream to Italy and Austria. That’s the reason the Turk Stream will only costs 10 billion dollars while the South Stream would cost 40 billion dollars.

Russia wanted the Turk Stream to move parallel to the Blue Stream and leave it to Turkey to connect it with the Turkish-Greek borders (red line). Turkey on the other hand wanted the Turk Stream to exit directly at the western part of Turkey, near the Greek-Turkish borders, and that’s what Russia and Turkey finally agreed to do (purple line).

Picture 43

Russia and Turkish Prefered Routes

You can see an actual map of the Turk Stream pipeline at the following article of RT (Russia Today), which is a state owned Russian news agency, titled “Russia and Turkey agree on Turkish Stream onshore route”, February 2015.

http://rt.com/business/230487-turkish-stream-new-route/

Why the Turk Stream Pipeline is not  the Best Option Neither for Russia nor for Turkey

It is very easy to understand that for Russia the Turk Stream is an inferior project when compared to the South Stream. That is of course when examining the pipelines from a geopolitical and not from and economic point of view. The South Stream would cost more, but it would bypass Turkey, which is Russia’s regional rival. The South Stream would cross the Black Sea and exit in Bulgaria, a country that has good relations with Russia, and a country that cannot challenge Russia in the way Turkey can. Therefore the Turk Stream is at most a second best solution for Russia.

It is true that the Turk Stream costs less, and in economic terms it is a superior solution for Russia. However it is much better for Russia to sell her natural gas directly to Europe without any Turkish interference, and without having to pay Turkey transit fees and offering her large price discounts. According to the aforementioned Reuters article Russia agreed to a 6% discount on gas prices but Turkey wanted a 15% discount. The truth is that Russia needs Turkey, and Turkey is fully aware of that.

But the Turkish Stream is not the best option for Turkey either. In the same way that Russia does not want to increase her dependence on Turkey, Turkey does not want to increase her dependence on Russia. According to Turkey’s Foreign Minister, the TANAP project is much more important for Turkey than the Turkish Stream, as you can read at the following article of Hyrriyet, one of the largest Turkish newspapers, titled “Why TANAP is more important than the Turkish Stream”, December 2014.

Picture 44

Turkish Stream TANAP

According to Hurriyet it is difficult for both the Turk Stream (red line) and TANAP (purple line) to be constructed, because they aim at the same markets.

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Turkish Foreign Minister Mevlüt Çavuşoğlu had to clearly underline that Turkey’s priority was the TANAP project. “We know how important [TANAP] is for Turkey, Georgia and Europe, particularly southeastern Europe. Along with the TAP [Trans Adriatic Pipeline], the TANAP is a project that could carry natural gas to different European countries. We should all exert efforts for the completion of this project, regardless of the decrease in oil and gas prices,” he stressed.

Çavuşoğlu’s statement is particularly important because he admitted that TANAP’s objective is no different from the Turkish Stream. Both will supply natural gas to European markets. However, given the decrease in energy demands in European markets, it will be hard to have two pipelines operating at the same time.

http://www.hurriyetdailynews.com/why-tanap-is-more-important-than-the-turkish-stream.aspx?PageID=238&NID=75574&NewsCatID=429

I believe that Hurriyet is right when it says that it is very difficult for both the TANAP and the Turk Stream to be constructed, because there is not enough demand to absorb their huge construction costs and make both pipelines viable. Therefore the Turkish Stream and the Trans-Anatolian (TANAP) pipelines are in a sense competing pipelines. The pipeline that will reach Europe first will absorb a large part of the available demand and will make the construction of the other pipeline very difficult. Therefore it is not unrealistic to assume that in the end Turkey might have to decide which pipeline she prefers.

Which of the two pipelines best serves the Turkish interests? Is it the Turk Stream or the TANAP? The answer is obvious and it is the TANAP. With TANAP Turkey will depend on Azerbaijan, Northern Iraq (Iraqi Kurdistan), Georgia, and Turkmenistan, which are all very weak countries when compared to Turkey. With the Turk Stream Turkey will increase her dependence on Russia, which is Turkey’s main regional rival for the last centuries.

At the following article, titled “Gazprom’s Dwindling Clout”, February 2015, the New York Times wonder why on earth would Turkey want to increase her dependence on Russia with the construction of the Turk Stream? The article mentions that there has not been a final agreement between Russia and Turkey for the Turk Stream, and that Turkey is more interested in receiving price discounts for the natural gas that she is already importing from Russia, than on the actual construction of the Turk Stream.

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In some ways the Turk Stream project is even more problematic than South Stream. The Russian proposal envisages avoiding European legal entanglements by having Gazprom customers take delivery at that European border. But that hope could easily backfire. Once Russian gas enters Europe, it could be routed anywhere. A major storage point, particularly in summer, would be the vast facilities in western Ukraine. Turk Stream could further diminish Gazprom’s influence by providing another store of natural gas immune to a Russian cut-off.

 It is also uncertain how eager Ankara is to support Turk Stream. The country already receives 60 percent of its natural gas from Russia. Why would Turkey want to make itself more dependent on Gazprom when all of Europe is seeking less dependence? Despite an agreement to conduct a preliminary feasibility study, there is still no actual contract between the two countries’ state-controlled energy companies to build Turk Stream. So far, Ankara seems more focused on obtaining extra discounts for the Russian gas it already imports through the Blue Stream pipeline. Chances of financing from Turkey are just as slim as they are from the West.

http://www.nytimes.com/2015/02/12/opinion/gazproms-dwindling-clout.html?_r=0

It must be mentioned that even though the agreement between Erdogan and Putin for the Turk Stream on December 2014 was not a binding one, it was agreed that the 6% discounts on gas prices would start running from January 2015. That means Turkey will receive the discounts for the natural gas she is already importing without having to wait for the construction of the Turk Stream. Turkey did not even have to sign a final agreement for the Turk Stream to receive the discounts.

From all the above it is clear that the South Stream was a much better solution for Russia, when compared to the Turk Stream, because it would bypass Turkey. Similarly it is clear that the TANAP is a much better solution for Turkey, when compared to the Turk Stream, because it reduces Turkey’s dependence on Russia, and it increases Turkey’s geopolitical might.

Besides, countries that sell natural gas and oil earn a lot of money, and they have stronger armies. Why on earth would Turkey want Russia to build an even stronger army when the two countries have been fighting for centuries? It is true that if unlimited quantities of natural gas could be sold through Turkey, Turkey would welcome the Russian natural gas, because the Russian sales would also generate commissions for Turkey. However this does not seem to be the case.

As the Hurriyet article was saying these two are competing pipelines, and in the end Turkey might have to choose one or the either. Once TANAP is built, and its normal operation is guaranteed, it is a sure thing that Turkey would welcome the Turk Stream as well. Therefore the point is not that Turkey does not want the Turk Stream. The point is that Turkey would not allow the Turk Stream to jeopardize the TANAP project. However what Putin really wants is to jeopardize TANAP. At least that’s what he has been trying to do so far.

I must also say a few words about the Trans-Adriatic Pipeline (TAP), because it is closely related to the Trans-Anatolian Pipeline (TANAP). The Trans-Adriatic Pipeline will be a separate pipeline, but in a sense it will be an extension of TANAP. The plan is that TANAP will send natural gas from Azerbaijan, Turkmenistan and Northern Iraq to Greece and Bulgaria, and TAP will take natural gas from Greece and send it to Italy and Southern Europe, as you can see at the following map from a London School of Economics article, titled “Who are the winners and losers from the cancellation of the South Stream pipeline”.

Picture 45

TAP TANAP LSE

http://blogs.lse.ac.uk/europpblog/2014/12/18/who-are-the-winners-and-losers-from-the-cancellation-of-the-south-stream-pipeline/

Of course it is possible that at a later point another leg will be constructed, which will send the natural gas of the Caspian Sea and the Middle East to Central and Eastern Europe through Bulgaria. Moreover the Ionian Adriatic Pipeline (IAP), see yellow line at the following map, will connect Albania and Croatia. Therefore the South Caucasus Pipeline (SCP), the Trans-Anatolian Pipeline (TANAP), the Trans-Adriatic Pipeline (TAP) and the Ionian Adriatic Pipeline (IAP) are parts of the same project i.e. the Southern Energy Corridor and the ambition to provide Europe with an alternative to the Russian gas.

Picture 46

Ionian Adriatic Pipeline

Before moving on to the next chapter, I want to mention a few very interesting articles for what I have said so far.

1) At the following Foreign Policy article, titled “The Tsar Meets the Sultan”, December 2014, you can read that Russia offered Turkey a 6% discount on natural gas prices, starting from January 2015, with the possibility of even higher discounts if Russia and Turkey strengthen their cooperation on the energy sector, and if they go ahead with the construction of the nuclear plant of Akkuyu in Turkey, which would cost 20 billion dollars, and which would be constructed by Russia.

The article mentions the close cooperation between the two countries in the energy sector, but also their disagreements over Syria. The article concludes that Turkey benefits a lot from her cooperation with Russia in the energy sector, but Erdogan is not naïve to believe that Russia can ever become a strategic partner for Turkey. According to Foreign Policy it is very convenient for both Russia and Turkey to put pressure on the European Union, but it would also be very disappointing for both Turkey and Russia if the European Union ever decided to go ahead with the East Med pipeline (Israel-Cyprus-Greece).

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Erdogan is not naive; he must realize that his alliance with Russia is not a strategic partnership, but a pragmatic one. But while Turkey may enjoy short-term benefits with this new agreement, he has to ask how it will affect the country’s long-term interests. Developing strong relations with Putin may make life more difficult for the EU and the United States, but neither Ankara nor Moscow would be thrilled if Europe pushes for alternative underwater pipelines, such as one that would connect Italy-Greece-Cyprus-Israel.

http://foreignpolicy.com/2014/12/04/the-tsar-meets-the-sultan-turkey-russia/

2) Please note that opening ceremony of the nuclear power of Akkuyu took place in April 2015, as you can read at the following Caspian Energy article, titled “Turkish nuclear plant to be completed on time”, April 2015.

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Minister Yildiz will attend a groundbreaking ceremony for the ports of the nuclear plant construction site on Tuesday.

http://www.caspianenergy.net/en/energy/21851-turkish-nuclear-plant-to-be-completed-on-time

3) At the following Natural Gas Europe article, titled “Russia’s South Stream Decision Changes Regional Dynamics”, December 2014, you can read that it is very difficult for Russia to build the Turk Stream, when she has opened so many projects, like the construction of the Power of Siberia pipeline, which will connect Russia and China. According to Natural Gas Europe, Russia has already spent 4.5 billion dollars for South Stream, in tubes that have already been delivered at the Black Sea coasts. However these tubes could be used for the construction of the Turk Stream, if at some point the project comes to life.

The article mentions that the replacement of the South Stream with the Turk Stream does not solve Russia’s problems with the European Energy Regulations. Note that European anti-monopolistic regulations do not allow producers of natural gas to own the pipeline networks that distribute this natural gas. An exception was granted to Russia for the Nord Stream pipeline, in order for the Europeans to overcome the problem of the crises in Russian-Ukrainian relations, but after Russia’s intervention in Ukraine the EU toughened up its stance, and did not exclude the South Stream from European regulations.

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The second constraint was the rising cost of the pipeline. Gazprom projected a $10 billion price tag in 2007, but projected costs grew to $30 billion in 2014 and likely would have risen further. In mid-November, ENI CEO Claudio Descalzi warned that ENI would leave the project if prices continued to rise. Gazprom is relatively healthy financially, unlike its oil company sister, Rosneft. However, with many large and costly projects lined up for the next few years, including the Yamal natural gas project and the Power of Siberia pipeline to China, Gazprom most likely would not be able to foot most of the bill for South Stream without financial assistance from the Kremlin. And with Russia in a sharp economic decline and oil prices falling, the Kremlin has refrained from handing out large sums of money like it has in the past.

 Gazprom has already spent $4.5 billion on South Stream, mostly on 300,000 tons of underwater trunk pipelines that have been delivered to the Black Sea coastline. However, these pipes could still be of use in the construction of Russia’s new proposed pipeline to Turkey. According to Gazprom chief Alexei Miller, the alternative pipeline could have a capacity of 63 bcm, of which Turkey could purchase 14 bcm of natural gas and transit the rest to southeastern Europe to the same countries that would have received natural gas from South Stream. In short, the change in the pipeline projects is merely one of route; the outcome would be nearly the same. However, the way that natural gas would be transported is in question, since any new pipeline infrastructure reaching into Europe would be subject to the same EU regulations that haunted South Stream.

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Russia‘s decision to abandon South Stream also damages Moscow’s political ties with some of its European partners in the project. Countries such as Hungary and Serbia spent a great deal of political capital in defying the European Union to support the pipeline’s construction. Now some of these same countries are saying they will have to look to the European Union to help secure energy supplies.

http://www.naturalgaseurope.com/russia-south-stream-decision-changes-regional-dynamics?utm_source=Natural+Gas+Europe+Newsletter&utm_campaign=e2ce3f7af8-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_c95c702d4c-e2ce3f7af8-303885749

4) At the following article of the Turkish Weekly, titled “Trans Anatolian Gas Pipeline indispensable: Turkish FM”, January 2015, you can read that the Turkish Foreign Minister said that the TANAP pipeline is of strategic importance for Turkey, and that it will be ready in the next 3 years.

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The Trans Anatolian Natural Gas Pipeline is an indispensable project for Turkey that will be completed within three years, Turkish foreign minister said Thursday.

Addressing a press conference after the trilateral meeting of foreign ministers of Turkey, Azerbaijan and Turkmenistan in Ashgabat, Mevlut Cavusoglu said, “TANAP is an indispensable project for us. We plan to finish this project in three years.”

The project will originate at the Georgia-Turkey border, pass through Anatolia, and extend around 1,242.7 miles (2,000 kilometers) to reach Greece.
It will cost $11 billion and carry 16 billion cubic meters of natural gas per year when it is completed in 2018. The capacity will increase to 23 billion cubic meters by 2023 and it is anticipated to be 31 billion cubic meters by 2026.

http://www.turkishweekly.net/news/179488/trans-anatolian-gas-pipeline-indispensable-turkish-fm.html

5) At the following article of Today’s Zaman, titled “Game on for ’Turkish Stream”, January 2015, you can read that Russia is trying to “sell” the Turk Stream as a major blow to the European Union, while in reality Putin is trying not to be left with egg on his face. The article says that when the Turkish Prime Minister Davutoglu was asked about the Turk Stream, he replied that Turkey does not want to become what Ukraine was for Russia. What Davutoglu means is that TANAP is more important than the Turk Stream for Turkey. According to Today’s Zaman the European Union does not take Putin’s threat seriously, because they believe it is very difficult for Russia to construct the Turk Stream, not only because of Russia’s economic condition, but also because Turkey would not give up on TANAP and the Southern Energy Corridor.

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While Moscow has tried to sell the cancellation of South Stream as a major blow to Europe, it would rather seem the other way around, and if Turkey does not buy into Moscow’s plan it will leave Russia with egg on its face. This of course puts Turkey in a very good position in terms of negotiating a sweet deal if it so wishes. Turkey is playing its cards very close to its chest. When I asked Prime Minister Ahmet Davutoğlu about the issue during his recent visit to Brussels he gave a vague reply — that Turkey is energy hungry and open for new projects with Russia; although Turkey does not see itself as an alternative to Ukraine it is concerned about the Russia-Ukraine crisis, as it risks impacting gas supplies. He added that Turkey receives 20 percent of its Russian gas via Ukraine.

 Turkey and Russia are engaged in gas negotiations. Ankara will play hardball with a strong hand, so the Russians are unlikely to get a quick deal unless they are ready to give major sweeteners to Turkey. Presently 60 percent of Turkey’s gas comes from Russia, and Ankara pays one of the highest prices. It’s not surprising that at the top of the bargaining list is a much cheaper price. The 6 percent reduction offered by Russia has so far been rejected.

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EU decision-makers are not taking Turkish Steam seriously. They see it as a Russian red herring; a desperate attempt to get the EU to reconsider its conditions for South Stream as well as its stance vis-a-vis Ukraine and the sanctions placed on Russia. The fact that the Russian economy is in such a fragile state would make the financing of this project very improbable. Furthermore, while Russia is trying to take advantage of the deterioration of relations between Turkey and the EU, there is a belief that Turkey would never sell out, as it would remove the strategic role Turkey is playing in strengthening EU energy security via the Southern Corridor that Turkey is just “playing” in order to get something sweet from the EU on other issues of importance. However, while nothing has yet been signed, history has shown that we should never underestimate President Vladimir Putin, who is ready to go to any length to achieve his objectives.

http://www.todayszaman.com/columnist/amanda-paul/game-on-for-turkish-stream_370649.html

6) At the following Natural Gas Europe article, titled “Reaching the EU Gas Entry Point: Race for Hitting Greece Border Speeds Up”, February 2015, you can read that there are many discussions about the Turk Stream, which hopes to reach the Turkish-Greek borders before TANAP, but the main shareholders of TANAP will hold a ground breaking ceremony on March 2015, which will mark the official start of the project. The article also mentions that there are many doubts about the Turk Stream, because an official agreement has not yet been signed between Russia and Turkey, and because the Turk Stream would jeopardise the construction of TANAP, and therefore Turkey’s ambition of becoming an independent energy hub.

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All these recent developments around new Russian proposed pipeline set uncertainties and rise question in Baku.

The Azeri government officials never said openly that they had seen competition and any danger for TANAP from new Russian plans and generally attempt to avoid any comment on the matter. 

However a stream of comments and analysis in pro-government media supporting TANAP raising questions around Russia’s new plans are a sign of the anxiety of official Baku. Gazprom ‘s aim to reach the Greek border with its proposed pipeline before TANAP add even more concerns.

 SOCAR sources who did not wish to be named said that TANAP plans remain unchanged and “everything is going on under the planned schedule”.

In March SOCAR and Botas plan to hold TANAP’s ground breaking ceremony, which will give an official start of the construction of the line with the initial capacity of 16 billion cubic meters of gas a year.

In April, the partners will move on into actual construction targeting to completion by late 2018 to be ready to deliver first gas from Shah Deniz-2 to Turkey. The $10-11 billion TANAP will link up with Trans-Adriatic Pipeline (TAP) on the Turkish-Greek border and pump natural gas to Europe in 2020.

 Meanwhile there are many doubts about Gazprom’s announced schedule as well as overall viability of Russia’s latest gas pipeline initiative coupled with its proposed natural gas trading hub on the Turkey-Greek border, the sources said.

There are no final intergovernmental and commercial agreements for Turkish Stream yet signed to make real first gas delivery by the end of next year.  Promises to complete all four planned strings of Turkish Stream by 2019 aiming to re-route all gas export currently going through Ukraine via new direction, appear unreasonable according to the local analysts in Baku commenting to Natural Gas Europe.

 From Russia’s perspective,Turkish Stream is of course a rival project to the Southern Corridor, aiming to gain control over natural gas flows from Turkey into the EU, and therefore undermining the strategic rationale of the Southern Corridor, commented Matthew Bryza, former US ambassador to Azerbaijan, Director of the International Centre for Defense Studies in Tallinn, to Natural Gas Europe.

For Turkey however, Turkish Stream could impact Turkey’s strategic significance by undercutting the Southern Corridor, especially by providing Russia greater control over Turkey’s own independence as a potential gas trading hub.  

Bryza also questioned Russia’s capability in current circumstances to implement Turkish Stream. “President Putin knows this, and is bluffing”, he said adding that even if Turkish Stream were to succeed, it would be unable to stop the Southern Corridor from moving forward, given the latter’s considerable political and commercial momentum.

http://www.naturalgaseurope.com/turkish-stream-tanap-gas-race-for-greek-border

7) At the following Natural Gas Europe article, titled “TANAP Secures First Step With Groundbreaking Ceremony”, March 2015, you can read that the TANAP project started in 2015.

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The Trans-Anatolian Natural Gas Pipeline Project (TANAP) has become a beacon light in both the Caspian region and Eastern Europe’s energy sectors.

The 1.850 km long, key unit in the Southern Gas Corridor, which will enable a decrease in the European Union’s dependence of Russian natural gas, will ship 16 billion cubic meters (BCM) of natural gas per year from Azerbaijan‘s Shah Deniz field to Turkey‘s western border.

The groundbreaking ceremony took place in Kars, Turkey. In attendance was Turkish President Recep Tayyip Erdogan, Azeri President Ilham Aliyev and Georgian President Giorgi Margvelashvili. 

http://www.naturalgaseurope.com/tanap-pipeline-groundbreaking-ceremony-kars-turkey-22781?utm_source=Natural+Gas+Europe+Newsletter&utm_campaign=deb0cc05ad-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_c95c702d4c-deb0cc05ad-307785513

8) At the following article of Hurriyet, titled “Calling Putin’s energy bluff”, January 2015, you can read that what the Russians are trying to say to the EU with the announcement of the Turk Stream, is that Russia will no longer sell natural gas to Europe through Ukraine, and the Europeans will have to import the Russian natural gas through Turkey and the Turk Stream. According to Hurriyet this a bluff because Russia is heavily dependent on Europe for her natural gas sales, and in the near future it is impossible for Russia to find a customer to replace Europe, because it will take many years before Russia and China are satisfactorily connected. Hurriyet also mentions that the EU would not accept to buy the Russian natural gas from the Turk Stream because something like that would jeopardise the Southern Energy Corridor i.e. TANAP, TAP etc.  The article concludes that what Russia is trying to do is to put pressure on the Europeans in order to share the cost of the South Stream.

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New European energy commissioner Maros Sefcovic was treated to a blunt and rude welcoming in Moscow. No more gas through Ukraine for Europe, he was told by Gazprom boss Alexey Miller. Is the Russian energy capo serious?  After all, Russia’s President, Mr. Vladimir Putin, not so long ago introduced the idea of a Russo-Turkish energy alliance. Compounded with the conflict in Ukraine, sanctions and a falling ruble, this latestRussian ultimatum may be more a call from a position of desperation rather than strength.

 Let’s consider what the Russians are actually saying. They are saying that they will no longer sell natural gas to Europe through Ukraine. They are also saying that if Europewants Russian gas, they have to pick it up at the Turkey-Greece border. They are further saying if Europe doesn’t agree to these conditions, they’ll sell their gas to someone else. A tall order of demands, and surely, Mr. Sefcovic was not inspired by his first meeting in Moscow, and let’s hope that he was also not too impressed by these empty Russian threats. Yes, empty!

 For starters, the Russian economy, in total freefall from the decline in oil prices and the fall in the value of the ruble, is insanely dependent on gas and oil exports. Oil and gas revenues make up more than 50 percent of the Russian government’s total revenue. And most of it comes from Europe. In numbers it looks like this: Russia’s 2013 GDP was $2.1 trillion, of which 50 percent is $1.05 trillion. The Russian National Stabilization fund was $88 billion before they spent at least $10 billion on pointlessly defending the ruble. The $70 billion or so that is left is a far cry from what the Russian state would need to cover the fall in revenue if they were to stop exporting gas to the European Union.

 The second question is: to whom would they sell all this extra gas if not to Europe? Certainly not Turkey, it doesn’t need all this gas, and the gas infrastructure out of Turkey is insufficient to place such volumes onto the global market. China? There are no existing routes that can deliver this gas to the Chinese and even if constructed, Chinawill not pay European prices for gas. Russia, even if they won’t admit it, is comfortable in its dependency on European consumers because the long-term contracts Gazprom has with the Europeans are well above what the current spot market price is for gas. IfRussia is to negotiate new contracts with China, Turkey, or anyone else now, the price will be lower.

 The third problem with Miller’s threat is the infrastructure from Russia to Turkey. The so-called Turk Stream is not built yet, Gazprom doesn’t have nearly enough cash on the books to finance it and because of Western sanctions, obtaining long-term loans on the private market is not an option. So here too, the big unknown is who is going to finance this pipeline, under what terms and how this will impact the profit margin on Russia’s gas exports. In all likelihood, this project is no more based in commercial reality than its South Stream predecessor was.

Bottom line, the Russians can’t afford not to sell gas to the Europeans unless they are prepared to deal with a 50 percent contraction in their economy.

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The last thing Europe should agree to is buying Russian gas at the Greece-Turkey border. This idea undermines Europe’s direct access to alternative gas supplies from the Caspian Sea, Iran and Iraq. The southern gas corridor, which is designed to take full advantage of the gas available from these zones, is a declared strategic energy interest of the EU. By increasing access to non-Russian gas, Brussels will increase competition on the European gas market, thus lowering the energy price for consumers and increasing overall energy security. Why on earth would Europe build a pipeline to the Turkish-Greek border just so it can pick up more Russian gas, especially when it already get this same gas through Ukraine? By agreeing to this most recent proposal from Moscow,Europe would in essence be agreeing to finance the pipeline infrastructure for which Russia has a large political appetite but can’t afford. In essence, what Miller is proposing to the EU is South Stream in disguise, and asking the EU to pay for it.

http://www.hurriyetdailynews.com/calling-putins-energy-bluff.aspx?pageID=449&nID=77425&NewsCatID=396

 9) At the following Turkey Analyst article, titled “South Stream, Russia and Turkey: What Does The Deal Mean?”, December 2014, you can read that it is not easy for Russia and Turkey to strengthen their cooperation in the energy sector when they have so many and serious disagreements.

http://www.turkeyanalyst.org/publications/turkey-analyst-articles/item/361-south-stream-russia-and-turkey-what-does-the-deal-mean

10) At the following article of Trend, one of Azerbaijan’s largest news networks, titled “Turkey unlikely to agree to Russia’s new gas pipeline deal – Matthew Bryza”, December 2014, you can read that according to the former US ambassador in Azerbaijan, Matthew Bryza, it is almost impossible for Turkey to agree on the Turkish Stream, because Turkey would ask for very large discounts in order to agree, and Russia could not afford to offer these discounts.

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Turkey will unlikely to agree to Russia’s new gas pipeline deal that would allow Russia to establish control over such a gas trading hub, former US ambassador to Azerbaijan, Director of the International Centre for Defense Studies in Tallinn, Matthew Bryza told Trend.

“Ankara does not wish to be dependent on Russia and is likely to demand a higher price discount and greater volumes of natural gas imports than Russia is willing to offer,” Bryza said.

Turkey has already received a 6-percent discount on gas from Russia, which will be implemented from Jan. 1, 2015. However, Ankara hopes the discount to reach 15 percent.

Bryza believes that Russia will try to reach an arrangement with Turkey that allows Russia some degree of control over natural gas exports from TANAP into Greece.

http://en.trend.az/business/energy/2340987.html

11) At the following article from the Oil Price, titled “Could Turkey Become the New Ukraine?”, February 2015, you can read that it is very doubtful whether the Turk Stream will ever be constructed. The article mentions that the whole project might be a Russian bluff, in order to put pressure on the European Union on the issue of the economic sanctions that have been imposed on Russia. According to the article Turkey has the upper hand in the Russian-Turkish negotiations over the Turk Stream, and it is known how “sensitive” Turkey is when it comes to natural gas prices. The article also mentions the other projects backed by Turkey i.e. TANAP and TAP, which would send Azerbaijani, Iraqi, and Turkmen natural gas to Europe through Turkey.

http://oilprice.com/Geopolitics/Europe/Could-Turkey-Become-the-New-Ukraine.html

Also note that the Turk Stream is simply one more connection between Russia and Europe. On the contrary there is no pipeline connection between the Caspian and the Mideast countries with Europe. Such a connection could only take place through Turkey or Russia, and the countries of the Caspian and the Middle East would prefer to do it with Turkey, because Turkey is very poor in energy reserves, and Turkey is their customer. Russia is very rich in oil and natural gas reserves and nobody wants to sell his products through his competitors.

 Given that the Turk Stream project isn’t an optimal solution for neither Russia nor Turkey, it is a strange thing that it was announced under so much publicity, during Putin’s visit in Turkey in December 2014.

 How the Announcement of the Turk Stream Benefits Russia

Without saying that it is impossible for the Turk Stream to ever be built, I want to describe the benefits that Russia enjoys by simply announcing the project. That is the benefits that Russia enjoys before even starting the project. When examining the benefits of the Turk Stream there are three things that must be kept in mind. The first one is that according to experts it is very difficult for both the Turk Stream and TANAP to be constructed because there is not enough demand in the Balkans to make both projects viable, and there are no pipeline networks which can transfer the natural gas of the Turk Stream and TANAP to the rest of Europe. The Turk Stream will carry 63 billion cubic meters of natural gas per year, and TANAP will reach a capacity of 31 billion cubic meters by 2025. TAP will initially carry 10 and will finally reach a capacity of 20 billion cubic meters per year.

The second one is that the European Union, which will buy this natural gas, has a clear preference towards the Southern Energy Corridor (TANAP-TAP), in order to reduce its dependence on Russia. The third is that Turkey, which is the country that both the TANAP and the Turk Stream must cross in order to reach Europe, has a clear preference towards the Southern Energy Corridor too. These three factors must be taken into account when examining the benefits of the announcement of the Turk Stream for Russia.

The first benefit for Russia is that she is threatening the European Union and Ukraine, in order to convince them to relax their stance on the issue of the crisis in Ukraine and Crimea, and the economic sanctions that have been imposed on Russia. Russia has informed the European Union that as soon as the Turk Stream will start operating, Russia will stop supplying natural gas through Ukraine. That would be a great problem for both the Europeans and the Ukrainians, who badly need the Russian natural gas. Moreover if the Europeans take seriously what Putin says, they will have to construct pipelines which will connect their countries to the Greek-Turkish borders, in order to keep importing Russian natural gas. Therefore Vladimir Putin is also trying to give the Europeans a motive to build a pipeline network that will bypass Ukraine in order to keep importing the Russian gas.

However this threat is not very credible as you can read at the following Euractiv article, titled “Šefčovič: Turkish Stream will not work”, February 2015. According to the EU Energy Commissioner, Maros Sefcovic, Gazprom cannot unilaterally stop supplying its clients through Ukraine, because the contracts specify specific delivery locations, and these locations cannot be unilaterally changed. That is even more relevant in the case of the Greek-Turkish borders, because there is not a pipeline network which have the ability to carry the natural gas from there to Central Europe.

Maros Sefcovic also mentions that the western part of Turkey only needs 15 billion cubic meters of natural gas, and the other neighbouring countries another 15 billion, and therefore he claims that he can not see who is going to buy the 94 billion cubic meters of natural gas that will be delivered to the Greek-Turkish borders by the Turk Stream and the TANAP pipelines. According to the European Energy Commissioner the EU and Gazprom must jointly find a solution which will satisfy both parties. The article also mentions that the European Union does not have many alternatives to the Russian natural gas, because TANAP will initially carry only 16 billion of natural gas. By saying so the article seems to agree with the European Commissioner, that the EU and Russia should sit down and find a solution.

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Šefčovič repeated that it was very “unusual” for a company such as Russia to communicate with its clients via press conferences. Indeed, the first announcement about Moscow’s change of plan was during a press conference of President Vladimir Putin, in Turkey. 

The Commission Vice-President also said that none of the countries or companies involved in the South Stream project had been officially notified of the project’s cancelation.

The same happens with Turkish Stream, Šefčovič said, calling it a “radical proposal”, which is hardly in conformity with the bilateral agreements individual companies have signed with Russia, which stipulate a precise place of delivery.

“I doubt that this place of delivery is the Greek-Turkish border,” Šefčovič said, referring to Russian statements that Turkish Stream will bring gas to a hub at the Greek-Turkish border.

 On top of it, he said he was questioning the economic viability of the project, because in his words Turkey needed some 15 billion cubic metres per year (bcm/y), and the other countries of the region needed another 15 bcm.

“Why (do) you need to ship to that part of the world more than 60 bcm of gas?” he asked, referring to the fact that Russia said Turkish Stream will have the same capacity as South Stream, that is, 63 bcm.

“This will not work. I cannot see that this would be the final solution. I think that we will have to come back to a more rational debate on what should be the economically viable solutions for this project, and for overall gas cooperation between Gazprom and the European countries,” Šefčovič said.

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He added that he didn’t agree with this reasoning, because Kyiv was committed to energy reform, and that the EU and other financial institutions were going to provide funding for the modernisation of the gas transmission system. Moreover, he said that it was not possible that the current volume of transit of Russian gas of over 100 bcm could be immediately rerouted.

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It also remains unclear what alternatives to Russian gas the region has, except some of the 10 bcm/y which would become available via the Southern gas corridor, when gas from Azerbaijan will start coming through the planned TANAP pipeline via Turkey, and the TAP (Trans-Adriatic) pipeline via Greece and Albania, by 2019-2020.

http://www.euractiv.com/sections/energy/sefcovic-turkish-stream-will-not-work-311836

At page 10 of the following article of the Oxford Energy Institute, of Oxford University, titled “Reducing European Dependence on Russian Gas”, October 2014, you can see the demand for natural gas of individual European countries, and what this demand is expected to be by 2030.

Picture 47

Gas Demand

http://www.oxfordenergy.org/wpcms/wp-content/uploads/2014/10/NG-92.pdf

You can see that by 2030 demand for natural gas will be 3.6 billion cubic meters in Greece, 2.3 billion in Serbia, 3.3 billion in Bulgaria. Turkey will need 70 billion cubic meters of natural gas by 2030, but today Turkey needs only 45 billion cubic meters of natural gas per year, and from this amount only 15 billion is needed by Turkey’s western part, which will supposedly be supplied by the Turk Strem or TANAP.

At the following article of the Turkish newspaper Today’s Zaman, which is the English version of the daily newspaper Zaman, titled “Ukrainian ambassador calls Turkish Stream too bad to be real”, March 2015, you can read a very interesting interview given by the Ukrainian ambassador in Turkey.

http://www.todayszaman.com/interviews_ukrainian-ambassador-calls-turkish-stream-too-bad-to-be-real_374469.html

According to the Ukrainian ambassador there is no chance that the Europeans will spend all this money that is required to connect Central Europe with Turkey, in order to substitute the gas they receive from Ukraine, because there is already a network that is doing that through Ukraine. Moreover, according to the Ukrainian ambassador, the Turk Stream cannot be constructed because its construction would mean the end of TANAP, and the end of Turkey’s ambition to become an independent energy hub. He mentions that Putin and Erdogan only singed a memorandum of understanding for the Turk Stream, and not a final agreement. At the journalist’s question about why Erdogan signed the memorandum of understanding, he answers that when an energy superpower like Russia asks you to consider a project, you have to say “yes, sure”.

By announcing the Turk Stream, Putin is also trying to punish Bulgaria. Even though Bulgaria traditionally has good relations with Russia, she has been obedient to the European Union regulations, and asked Russia to respect the EU regulations on energy issues. Bulgaria, even though very unhappily, announce on June 2014 that all Bulgarian projects related to the South Stream would be halted, until a solution was reached between the EU and Russia. You can read the following article of the Russian state owned RT (Russia Today), titled “Bulgaria halts Russia’s South Stream gas pipeline project”, June 2014.

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Bulgaria’s prime minister, Plamen Oresharski, has ordered a halt to work on Russia’s South Stream pipeline, on the recommendation of the EU. The decision was announced after his talks with US senators.

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Earlier this week, EU authorities ordered Bulgaria to suspend construction on its link of the pipeline, which is planned to transport Russian natural gas through the Black Sea to Bulgaria and onward to western Europe. Brussels wants the project frozen, pending a decision on whether it violates the EU competition regulations on a single energy market. It believes South Stream does not comply with the rules prohibiting energy producers from also controlling pipeline access. 

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In Bulgaria, the ruling Socialists support the South Stream project, while Movement for Rights and Freedom leader Lyutvi Mestan told parliament on June 5 that Bulgaria should defend its strategic interests “in cooperation, not in confrontation” with Europe.

Earlier Serbia has said it has no plans to delay the start of construction of its leg of the South Stream pipeline, scheduled for July. Serbian Energy Minister Aleksandar Antic said that the position was not decisive: “I believe the European Commission and member states will find a solution because this is a European project in the best interests of energy security.”
Hungarian Prime Minister Viktor Orban also said June 5 that the pipeline should be built, as there was no alternative to the project. 

http://rt.com/business/164588-brussels-bulgaria-halts-south-stream/

There are two routes by which Gazprom can enter Southern Europe, if Ukraine is taken out of the equation. The first one is Bulgaria, and the second one is Turkey. Putin thought that Bulgaria was very obedient to the European Union regulations and brought forward the Turk Stream to retaliate. Bulgaria is addicted to the Russian natural gas which reaches Bulgaria through Ukraine with the Trans-Balkan pipeline. Therefore Bulgaria needs either TANAP or the South Stream to increase her energy security, but also because she desperately needs the investments that are related to these projects, because Bulgaria is the poorest country of the European Union.

Bulgaria was disappointed twice, first with the cancellation of Nabucco pipeline, and then with the cancellation of the South Stream. Bulgaria is a battlefield between the European Union and the US on one side, and Russia on the other, as you can read at the following article of the American state owned Voice of America, titled “Bulgaria Key Battleground in US-Russia Energy War”, February 2015. According to the article the United States is trying to construct a nuclear energy plant in Bulgaria, in order to reduce Bulgaria’s dependence on Russian oil and natural gas.

Bulgaria is also very rich in shale gas, and the American companies have developed the techniques required to exploit this gas. Bulgaria had signed a contract with the American multinational Chevron, in order to exploit her shale gas reserves. This would be a very positive thing for the US and the EU, because it would reduce Bulgaria’s dependence on Russia for energy. But the exploitation of Bulgaria’s shale gas was abandoned due to heavy criticism and protests from pro-environment organizations. According to the article the Americans claim that the environmental campaigns were funded by Russia.

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The U.S. recently pledged to send an energy envoy to Sofia and is promoting an American company to build a nuclear power plant there. Washington is also looking to help fund new gas pipelines and terminals in the region.

“In the area of energy security, we’re not just talking the talk, now we’re walking the walk,” U.S. Assistant Secretary of State of European Affairs Victoria Nuland said in January of U.S. intentions.

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The U.S. moves come amid renewed charges that Russia – through its state-controlled energy company, Gazprom – has successfully blocked shale gas exploration in Bulgaria through a shadowy but well-funded campaign waged to protect its regional energy dominance.

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Despite paying some of the highest prices in the world for energy, Bulgaria in 2012 issued an open-ended ban on hydraulic fracturing, cancelling a license for unconventional gas exploration granted less than six months earlier to the U.S. energy giant Chevron.

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When Chevron moved into Bulgaria in 2010, it became the single largest investor of the shale era.

“They introduced a completely new business culture, put down €30 million [$38 million] up-front. It was an unheard of amount of money and triggered a chain reaction when the Russians realized Chevron meant business,” Vassilev said.

http://www.voanews.com/content/bulgaria-key-battleground-in-us-russia-energy-war/2655196.html

Obviously the United States did not give up and tried to build the nuclear power plant that I mentioned in order reduce the Russian influence on Bulgaria. As you can read at the following article of the World Nuclear Organization, titled “Nuclear Power in Bulgaria”, April 2015, Bulgaria covers 1/3 of her energy needs with nuclear energy. Bulgaria has 2 nuclear reactors, and she had another 2, which she had to close down when she joined the EU, because they were very old and they did not satisfy the European regulations.

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Bulgaria has two nuclear reactors generating about one-third of its electricity.

Two others, shut down under duress as a condition of Bulgaria joining the European Union, could be restarted.

Bulgaria‘s first commercial nuclear power reactor began operating in 1974.

Government commitment to the future of nuclear energy is strong, though finance is lacking. Construction of a new nuclear plant was planned, but instead, a 1200 MWe unit will be added to the present plant.

http://www.world-nuclear.org/info/Country-Profiles/Countries-A-F/Bulgaria/

At the following Wall Street Journal article, titled “Bulgaria Signs Deal With Westinghouse on Nuclear Power Plant”, August 2014, you can read that an American company agreed with the Bulgarian government to build a nuclear power plant, in order to reduce Bulgaria’s dependence on Russian know how and Russian nuclear technology, and to reduce Bulgaria’s dependence on Russian natural gas and oil. At the 18th paragraph the article mentions that this success for the Americans came after their failure in Hungary, where the Russian state owned nuclear energy company Rosatom agreed with the Hungarian government to construct two nuclear power plants.

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An American nuclear engineering company and Bulgaria Friday reached a long-sought deal paving the way for the European Union state to diversify its energy generation and nuclear fuel sources away from Russian to Western technologies while meeting the EU’s strict carbon-emission reduction targets.

Pennsylvania-based Westinghouse Electric Co. Ltd. said after seven months of negotiations it signed an agreement with Bulgaria’s state-owned nuclear power plant operator Kozloduy Nuclear Power Plant PLC giving the American company a 30% stake in a project company that aims to build a new 1,000 megawatt reactor worth over $5 billion.

Westinghouse will provide all of the plant equipment, design, engineering and fuel.

The project will be a major employment booster in the EU’s poorest member state by economic output per capita. The company said during the construction phase some 3,500 local workers will be employed on site with an additional 15,000 workers involved in the associated supply chain. Once the reactor is complete, it will employ up to 800 specialists.

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This agreement comes as EU state Hungary earlier this year made a deal with Russian nuclear company Rosatom in which the Russian side will fully finance the development and construction of two new reactors at the PAKS nuclear power plant in Hungary at a cost estimate to be in excess of €10 billion ($13.39 billion).

http://www.wsj.com/articles/bulgaria-signs-deal-with-westinghouse-on-nuclear-power-plant-1406890323

Victor Orban, the President of Hungary, is very close to Russia and he fights the European energy regulations and the European Energy Union which is promoted by the EU, as you can read at the following article of Euractiv, titled “Orban says EU’s Energy Union is a threat to Hungary”, February 2015.

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Hungarian Prime Minister Viktor Orbán said his country has a “major problem” with Brussels because of the European Commission’s plans to set up an Energy Union, which in his words hinders national sovereignty.

Orbán, who two days ago hosted Russian President Vladimir Putin from whom he obtained major gas price discounts, said his country does not agree that he must inform the Commission of his gas supply agreements with Russia. One of the key elements of the Energy Union is that member states’ energy deals with non-EU nations should be scrutinised by the European Commission before they are signed. Russia has always insisted that those deals are confidential.

http://www.euractiv.com/sections/eu-priorities-2020/orban-says-eus-energy-union-threat-hungary-312290

With the European Energy Union, all the energy deals of the individual EU member states will be scrutinized by the relevant European authority. Therefore the corrupt political systems of Eastern Europe and the Balkans will not be able to agree higher prices with Russia, passing the higher costs to consumers. This kind of indirect funding is one way that corrupt politicians are financed by Russia, in order to promote Russia’s foreign policy and combat the European energy regulations. In other cases Putin offers lower prices to friendly governments, and higher prices to pro-European countries.

I must say one more thing about Bulgaria’s nuclear energy plants. Russia tried to build in Bulgaria one more nuclear energy plant, in order to prevent the construction of a plant by a western company. But as you can read at the following Financial Times article, titled “Bulgarians see Russian hand in anti-shale protests”, November 2014, even though the Russian company Rosatom managed to agree on the construction of a new nuclear plant, in the end the Bulgarian government backed out. I guess the Bulgarian government backed out due to pressures from the EU and the US.

At another part the Financial Times article mentions that many people in Bulgaria believe that the anti-shale protests in Bulgaria were financed by Tsvetan Tsvetanov, a Bulgarian oligarch who is very close to Russia. The article also mentions Bulgaria’s dependency on Russia for natural gas.

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It took barely a week of street protests by environmentalists in January 2012 beforeBoyko Borisov, Bulgaria’s prime minister, relented and cancelled a licence for Chevron, the US energy company, to explore for shale gas in the Balkan country’s prime wheat-growing region.

When another wave of protests prompted by sharp rises in electricity and fuel pricestoppled Mr Borisov’s centre-right government 13 months later, it seemed as if civil society had finally come of age in the EU’s poorest member state.

 Yet some in Sofia believe a Russian hand helped foment the protests for its own ends. They point to Kremlin links to local groups that supplied demonstrators and funded an anti-shale media campaign. The goal, they believe, was to punish the pro-European Mr Borisov for pursuing policies that might reduce Bulgaria’s dependence on Russian energy.

“We must remember the anti-shale protests and the other organised actions against the government of Boyko Borisov. This was a well-planned scenario developed by local corporate, oligarch and economic interests connected with Russia,” said Tsvetan Tsvetanov, a former interior minister who is a close Borisov confidant.

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These days, energy has been at the centre of the relationship. Russia’s Gazprom supplies 90 per cent of Bulgaria’s annual gas via a pipeline that runs through Ukraine. Its dominance means that Bulgaria’s state energy company – despite its relative poverty – pays 30 per cent more for its gas than importers in Germany.

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It was not Mr Borisov’s only affront to Moscow. In January 2013, he called off a €7bn project backed by previous governments to build a 2,000-megawatt nuclear plant at Belene on the Danube river which was led by Russia’s state-owned Rosatom group. His government also awarded a concession to explore for gas off Bulgaria’s Black Sea coast to an international consortium headed by Total of France.

Those who suspect Moscow’s involvement in the unrest in Sofia point to a media campaign – said to be worth €20m – backing the anti-shale protests. It was handled by several local media and advertising companies with Russian connections.

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The outgoing socialist-led government was a keen backer of South Stream. Even though it suspended participation in June under pressure from Brussels it still allowed on-the-ground preparations to continue.

http://www.ft.com/intl/cms/s/0/e011d3f6-6507-11e4-ab2d-00144feabdc0.html

Bulgaria has approximately 1 trillion cubic meters of shale gas reserves, which is quite impressive if it is taken into account that the richest countries in shale gas have approximately 30 trillion cubic meters of shale gas reserves. At the following Reuters article, titled “Bulgaria bans shale oil and gas drilling”, January 2012, you can read about the Bulgarian shale gas reserves.

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Initial estimates showed Bulgaria may have significant shale gas reserves, up to 1.0 trillion cubic metres.

The centre-right government, initially a staunch supporter of shale gas on hopes it may reduce the country’s almost total dependence on gas imports from Russia’s Gazprom, has changed its position after growing opposition to fracking.

http://www.reuters.com/article/2012/01/18/bulgaria-shalegas-ban-idUSL6E8CI2ML20120118

The Burgas (Bulgaria) – Alexandroupolis (Greece) oil pipeline was another battlefield between the US and Russia in Bulgaria. The pipeline was agreed in 2007 between Russia, Bulgaria and Greece, and it was meant to shadow the Baku (Azerbaijan)- Ceyhan (Turkey) oil pipeline that was promoted by the Americans. See red line for Burgas-Alexandroupolis oil pipeline, and brown line for the Baku-Ceyhan pipeline.

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Burgas Alexandroupoli and Baku Ceyhan

The Bulgarian government once more backed out from the Burgas-Alexandroupolis pipeline, while the Baku-Ceyhan pipeline has been built, and it is operating. At the following article of the Bulgarian site Novinite, titled “Russia, Turkey Fall Out over Samsun-Ceyhan Oil Pipeline Project”, September 2010, you can read that after the cancellation of the Burgas-Alexandroupolis pipeline Russia tried to promote the Samsun-Ceyhan oil pipeline, but the plan was abandoned, because Russia claimed that Turkey’s economic demands were unacceptable.

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Russia and Turkey will be starting their negotiations for the construction of the Samsun-Ceyhan oil pipeline from scratch because of disagreements, announced Russian company Transneft.

“[Turkey’s] offer is to sign an inter-governmental agreement in which they are trying to get us to agree to economically unacceptable terms. Of course, we don’t agree, and we are starting the new round of talks practically from scratch,” declared the CEO of Transneft, one of the Russian partners in the Samsun-Ceyhan project, Nikolai Tokarev, as cited by RIA Novosti.

The Samsun-Ceyhan oil pipeline is a project to transport Russian and Caspian oil from the Black Sea to the Mediterranean by circumventing the Turkish Straits. It has been described as the major competitor of the Burgas-Alexandroupolis oil pipeline, a project of Russia, Bulgaria, and Greece, whose fate is uncertain over environmental concerns of the Bulgarian government.

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The agreement for the construction and operation of the Samsun-Ceyhan oil pipeline was signed in October 2009 by representatives of Russian companies Rosneft, Transneft, and Sovkomflot, the Turkish Calik Group, and the Italian Eni. Lukoil has also expressed interest in the project.

In Bulgaria critics of the unwillingness of the Borisov government to commit firmly to the Burgas-Alexandroupolis project have used the development of the Samsun-Ceyhan project as an argument claiming that only one of these two pipes could be built and Bulgaria will lose many benefits to Turkey if it gives up the BA pipe.

Russian officials have also made it clear that Russia would seek alternative projects with neighboring states if Bulgaria decides against participating in any joint energy projects such as the Burgas-Alexandroupolis oil pipeline.

 http://www.novinite.com/articles/119823/Russia,+Turkey+Fall+Out+over+Samsun-Ceyhan+Oil+Pipeline+Project

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Samsun Ceyhan Pipeline

The following Natural Gas Europe article, titled “Bulgaria’s New Coalition And the Future of the South Stream”, November 2014, is a very good article about the political clashes within Bulgaria, on the issue of the South Stream. In the 6th and 7th paragraphs you can read about the weak Bulgarian and Serbian institutions, which make these countries susceptible to fraud. According to the article 1 kilometer of a pipeline like South Stream would costs approximately 3.5 million euros in Germany, but it costs approximately 7 million euros in Bulgaria and Serbia. The article mentions that most of the cost differential is due to the very sophisticated corruption techniques that have been developed in these countries.

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From Bulgaria’s point of view, South Stream has one big flaw. Projected at a price of up to €7 million per kilometre, observers say that South Stream will cost more than twice what a similar pipeline would cost in Germany, for instance. The difference between the market price and the actual price could help back up a sophisticated type of corruption: through subcontractors, it could benefit different political actors to a degree unknown before in this part of Europe. Weak institutions in places like Bulgaria or Serbia are easy victims for this kind of graft. To ensure this does not happen, the new coalition agreement has specified clear conditions under which the pipeline would be built.

The agreement foresees liberalisation of the electricity and energy market, allowing consumers to choose their supplier; improving Bulgaria’s energy security through completion of the interconnectors with neighbours; development of local energy resources; and building South Stream “only in full compliance with EU legislation, in dialogue with the European Commission and if clear economic benefits for the country are proven”.

http://www.naturalgaseurope.com/bulgaria-and-south-stream-pipeline

It must be also mentioned that Bulgaria is located between Romania and Turkey, which are both NATO members, and Russian rivals. Therefore Bulgaria would not want to find herself between two NATO allies, in a potential war between the US and Russia.

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Bulgaria Romania Turkey

Until now I described the benefits for Vladimir Putin from the announcement of the Turk Stream pipeline, in terms of threatening the EU, Ukraine and Bulgaria. On the other hand the announcement of the Turk Stream could be also seen as Putin’s first move to make peace with the European Union and the US. Because one has to note that the Turk Stream does not contradict the European regulations. Russia will take the Turk Stream to Turkey and leave it there, and therefore it will be other companies, and not Gazprom, which are supposed to take the Russian natural gas to Europe. That’s exactly what the EU regulation is about. The producer of natural gas is not allowed to transfer his gas in the European Union with his own pipeline networks i.e. separation of the production, the transportation and the sale of energy within the EU (unbundling the energy sector).

It should be noted that in the past both the EU and the USA, but also the Italian energy giant ENI, which had a 20% stake in the South Stream project, wanted the consolidation of the Nabucco and the South Stream pipelines, into one pipeline that would carry both Russian and Caspian natural gas to Europe through Turkey. But at the time Putin would not even discuss such a plan, as you can read at the following Euractiv article, titled “US says South Stream and Nabucco could merge”, October 2011.

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“Two major pipeline projects that have so far been considered rivals, the EU-favoured Nabucco and Gazprom’s South Stream, may merge, US Ambassador to Italy David Thorne told Italian daily La Stampa in an interview published today (10 January)”.

http://www.euractiv.com/energy/us-south-stream-nabucco-merge-news-501107

 At the following Moscow Times article, titled “Shmatko: No Question of Nabucco and South Stream Merger”, March 2010, you can read that the Russian Minister of Energy, Sergei Shmatko, ruled out the consolidation of the Nabucco and South Stream pipelines into one pipeline.

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“The government is not considering merging its South Stream gas pipeline to Europe with the rival European Union-backed Nabucco link, Energy Minister Sergei Shmatko said Monday.

 South Stream is “more competitive” than Nabucco, Shmatko said. Paolo Scaroni, chief executive of Italy’s Eni, Gazprom’s partner in South Stream, said last week that combining the two pipeline projects would save time and money.

 “We are not discussing these issues at all,” Shmatko said.

Gazprom and Eni are equal partners in a venture to build South Stream under the Black Sea, shipping as much as 63 billion cubic meters of the fuel annually from Russia and Central Asia to Europe. Rival Nabucco would deliver 31 bcm annually from eastern Turkey to Austria, bypassing Russia”.

http://www.themoscowtimes.com/sitemap/free/2010/3/article/shmatko-no-question-of-nabucco-and-south-stream-merger/401747.html

 At the following Bloomberg article, titled “Russia Rejects Eni Call to Merge Europe Gas Pipelines”, March 2010, you can read that the ENI’s CEO had personally asked Putin to consider the issue of merging Nabuco and South Stream pipelines, but Putin was not interested.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ae4.eb4lPqjk

Therefore the Turk Stream could be the Russian part, and TANAP could be the Azeri part, of a pipeline that will be built by Russia, Azerbaijan and Turkey, with some funding from the EU. If the two pipelines merge, Russia would stop trying to destroy the Southern Energy Corridor by sending rivers of Russian gas to the Balkans. There is of course the issue of the cost for the two pipelines, but that would be a one time cost. If there was some cooperation between Russia, Turkey and Azerbaijan, the Turk Stream would not need to have an annual capacity of 63 billion cubic meters of natural gas per year. In such a scenario the Turk Stream could be substituted by a smaller pipeline. Of course this is not what we are seeing right now. Right now Putin is very aggressive. I mention this scenario, because it might be in Putin’s mind  in case everything goes wrong for Russia.

Moreover it should not be overlooked that EU officials said that Gazprom could use the TAP pipeline, as you can read at the following Bloomberg article, titled “European Commission says Russia can use Trans Adriatic Pipeline”, March 2015.

http://www.bloomberg.com/research/markets/news/article.asp?docKey=600-201503060948KRTRIB__BUSNEWS_63035_48419-1

However the first 10 billion cubic meters of gas that will be carried by TAP have been booked by the state Azeri company SOCAR, in order to make TAP a viable project. TAP will initially carry 10 billion cubic meters, and will gradually reach a capacity of 20 billion cubic meters. Gazprom will be able to use the pipeline in its second phase. In any case the TAP pipeline is very small to satisfy both Gazprom and SOCAR, and that’s why the two companies are competing about who is going to acquire the Greek natural gas company DEPA. They both want to be able to use the Greek pipeline networks.

At the following Financial Times article, titled “Could the cancelled South Stream pipeline be revived”, December 2014, you can read that even though Putin announced the cancellation of the South Stream, the EU officials do not consider the pipeline dead, because there are not many alternatives to the South Stream and the Russian gas. According to the FT, Nabucco is dead, TANAP will only send small volumes of natural gas to Europe, at least in its first stages, and the US cannot send natural gas to Europe in prices that can match the Russian ones. The officials at the European Union do not say much, and they wait to see whether the new Russian pipeline that was announced by Putin will respect the European energy regulations.

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Vladimir Putin seemed pretty emphatic on Monday that Russia would stop construction of the South Stream gas pipeline, shelving a strategically important project that Moscow was counting on to cement its influence in south-eastern Europe”.

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“Alternatives to Russian gas have been developing slowly: the proposed US-backed Nabucco pipeline remained on the drawing board for a decade; shale gas exploration has been blocked by political opposition or delayed by geological difficulties across CEE.

More promising is the Trans-Adriatic Pipeline (TAP), which would bring Azerbaijani gas to Italy via the Balkans, and liquefied natural gas imports via a proposed terminal on the Croatian island of Krk and an existing facility in Revithoussa in Greece”

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“But these will not bring huge volumes of gas to the region: Krk’s capacity would be 4 to 6 bcm, and TAP’s an initial 10bcm”.

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“Indeed, even the EU itself seems not to believe that South Stream is entirely dead: on Tuesday the Commission announced that talks with Gazprom on the project would go ahead the following week, despite Putin’s announcement.

 “The EU’s initial reaction has been fairly muted, with officials focusing on the fact that the pipeline project was not compliant with EU competition law, and now stressing that any future project must also respect EU legislation,” says Samantha Seewoosurrun, a Brussels-based communications consultant. “It remains to be seen whether Russia’s move to establish a new pipeline project in collaboration with Turkey will be in the interests of EU members, as it is far from clear that Turkey will toe the EU line.”

http://blogs.ft.com/beyond-brics/2014/12/02/could-the-cancelled-south-stream-pipeline-be-revived/

Moreover it must be mentioned that before the crisis in Ukraine the EU was thinking about making an exception for the South Stream, as it had already done for the other Russian pipeline, the North Stream, as you can read at the following article of the Russian state owned RT, titled “EU gives Gazprom preliminary OK for South Stream gas pipeline”. You can read that the European Energy Commissioner at the time, Gunter Oettinger, had said that he believed the EU and Gazprom would find a solution for the South Stream.

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“Gunther Oettinger, the European Commissioner for Energy, told Vedomosti newspaper that Moscow and Brussels will find a solution to honor previous intergovernmental agreements Gazprom has made with European transit countries. Oettinger met with Russian Energy Minister Aleksandr Novak in Moscow on January 17, and the two agreed to create a commission to address technical and legal details of the gas pipeline, which will stretch 2400 km, and by 2018 will have the capacity to deliver 64 billion cubic meters of natural gas to Europe”.

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“The EU’s ‘Third Energy Package’ regulations aim to protect third party access to pipelines, and as a result prevents Gazprom from both owning the pipeline and the product shipped through it. Moscow broke ground on the South Stream project after securing agreements with Austria, Bulgaria, Croatia, Greece, Hungary, Slovenia and soon-to-be EU member Serbia, but ignored the European ‘anti-monopoly’ law”.

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“Gazprom has strong support from Germany, Europe’s biggest energy consumer, where the sister project called Nord Stream, connects Russia and Germany under the Baltic Sea, and was opened in November 2011.Partners in Nord Stream are Dusseldorf-based E.ON, Germany’s largest crude producer Wintershall, French gas utility GDF Suez, and the Netherlands’ operator Gasunie”.

http://rt.com/business/eu-gazprom-south-stream-881/

At the following Reuters article, titled “Merkel urges Bulgaria to seek new talks with Putin on South Stream”, December 2014, you can read that after Putin announced the cancellation of the South Stream, the German Chancellor Angela Merkel urged the Bulgarian government to resume negotiations with Russia about the South Stream.

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German Chancellor Angela Merkel backed Bulgaria on Monday in its bid to seek new talks with Russia about the South Stream gas pipeline after Moscow shelved the project this month in favor of an alternative link via Turkey.

The EU, at odds with Moscow over the Ukraine crisis and keen to reduce its energy reliance on Russia, had raised objections to the $40 billion South Stream pipeline, which was to run under the Black Sea and enter the EU via Bulgaria.

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“We need to examine all legal questions surrounding the South Stream project and then use these to move discussions forward with Russia,” Merkel said after talks with Bulgarian Prime Minister Boiko Borisov in Berlin.

Numerous contracts have already been agreed and it is important for both sides to remain reliable partners, she added.Borisov said after meeting Merkel he was convinced that the problems could be resolved and he hoped to receive clarification from Brussels on its views about the pipeline.

Numerous contracts have already been agreed and it is important for both sides to remain reliable partners, she added.

Borisov said after meeting Merkel he was convinced that the problems could be resolved and he hoped to receive clarification from Brussels on its views about the pipeline.

http://www.reuters.com/article/2014/12/15/us-bulgaria-gas-southstream-idUSKBN0JT1NI20141215

It is very normal for Germany to prefer the Russian gas to enter Europe through Bulgaria and not through Turkey, because the German-Turkish relations are very problematic. Germany is the country that mostly opposes Turkey’s membership in the European Union. Becoming a member of the EU has been one of Turkey’s main geopolitical objectives for the last decades. At the following Bloomberg article, titled “Turkey Unfit to Join EU Says Merkel Europe Parliament Candidate”, April 2014, you can read that Merkel clearly said that Turkey does not satisfy the conditions for becoming a full member of the European Union.

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Turkey isn’t politically fit to join the European Union and shouldn’t become a member, the lead candidate of Chancellor Angela Merkel’s Christian Democratic Union for European Parliament elections said.

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Merkel rejects Turkey, a mainly Muslim nation of 81 million people, joining the 28-member EU. Instead, she and most of her CDU want to offer it a “privileged partnership” with the bloc.

http://www.bloomberg.com/news/articles/2014-04-10/turkey-unfit-to-join-eu-says-merkel-europe-parliament-candidate

At the following Financial Times article, titled “Germany blocks Turkey’s bid to join EU”, June 2013, you can read that Germany blocks Turkey’s accession to the EU, something which infuriates Turkey. Actually Egemen Bagis, a Turkish minister, stated that Turkey will say to the EU “get lost” if Turkey has to.

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Germany has blocked the start of EU talks with Turkey in the wake of Ankara’s crackdown on mass demonstrations this month, a move some Turkish officials suggest could lead to an irreparable break with Brussels.

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“The EU needs Turkey more than Turkey needs the EU,” Egemen Bagis, Turkey’s EU minister, said this week. “If we have to, we could tell them ‘Get lost’.” Mr Bagis has also warned that Turkey-EU relations could reach an “irreversible point”.

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But Angela Merkel, chancellor, a longstanding opponent of Turkish entry, has described herself as “shocked” by the crackdown on the demonstrations, which reached a climax last weekend, when Claudia Roth, the co-chairman of Germany’s Green party, was tear-gassed among the protesters and police used water cannon on Istanbul’s German hospital.

http://www.ft.com/intl/cms/s/0/2432cc2c-d9c0-11e2-bab1-00144feab7de.html

From all the above articles one can conclude that on one hand the Europeans are putting pressure on Russia, in order for Putin to show some respect for the European regulations, but on the other hand they know that Europe cannot live without the Russian oil and gas. Therefore all this game with the cancellation of the South Stream and its replacement with the Turk Stream it should be seen for the moment as some manoeuvres on a geopolitical chess board. What is important is whether in the end the EU and Russia will manage to reach an agreement or not.

The Turk Stream is not the first time that Putin is using natural gas in order to blackmail the European Union. The announcement of the agreement between Gazprom and China in 2014, which involved the annual sale of 38 billion cubic meters of Russian gas to China for the next 30 years, with the construction of a modern pipeline network which will connect East Siberia to China, was for Putin another way to put pressure on the EU. If Russia and China are connected with modern pipeline networks, Europe will have to compete with China for the Russian natural gas. Russia has of course every right to pursue a policy of diversifying her sales, in order to reduce her dependence on Europe. However the EU is not trying to block the connection between Russia and China, while Russia is trying to block the Southern Energy Corridor, by using both diplomatic and military means.

However at the following Natural Gas Europe article, titled “Russian Energy Dispute: Could Gazprom’s $400Bn Gas Pipeline to China be Postponed?”, March 2015, you can read that there are many doubts about whether Russia can actually construct the very expensive pipelines that will connect her to China.

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Three sources, speaking on condition of anonymity, said last week that the much touted Power of Siberia (POS) natural gas pipeline to be built by Russian gas giant Gazprom and earmarked to bring natural gas from two new fields in Russia to China could be delayed. The sources said that the pipeline could be postponed until the Altai-pipeline, a smaller gas pipeline in Russia, is built. Moscow denied claims that the POS pipeline will be postponed.

In May, Russia signed an estimated $400 billion gas supply deal to deliver 38 billion cubic meters (bcm) of gas through the POS pipeline to China, with first gas to be delivered in 2018. The pipeline deal is so large that analysts have claimed that it will change gas dynamics in the Asia-Pacific region, while reducing Chinese demand for historically expensive liquefied natural gas (LNG).

 In early November, the two countries also signed a preliminary deal for Russia to deliver 30 bcm of gas annually over 30 years from Western Siberia to North-Western China via the Altai route. Analysts estimated the second deal to be worth approximately $300 billion, while both deals combined would account for almost 17 percent of China’s gas consumption by around 2020.

Speculation is that plunging oil and gas prices could be part of the reason for any possible postponement. Since mid-June global crude oil prices are off nearly 60 percent, while natural gas prices are also off by at least half since the start of last year. The quandary for Russia in this ongoing price decline is that the government receives as much as anywhere between 30 percent to 50 percent of its revenue from its oil and gas sector. Media reported that low energy prices have hurt the case for the investment required to develop the new fields the pipelines would serve.

 Perhaps plunging energy prices aren’t the only reason for possible POS postponement. Keun-Wook Paik, senior research fellow at the Oxford Institute for Energy Studies and author of the book Sino-Russian Oil and Gas Cooperation: The Reality and Implications, toldBreaking Energy that it’s not an exaggeration to say that the POS gas deal in May 2014 was initiated by President Putin, not by Gazprom CEO Alexei Miller.

http://breakingenergy.com/2015/03/24/russian-energy-dispute-could-gazproms-400bn-gas-pipeline-to-china-be-postponed/?utm_source=Breaking+Energy&utm_campaign=c2c7926df8-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_f852427a4b-c2c7926df8-408578265

By announcing the Turk Stream Putin enjoyed one more benefit. Putin has implicated in the South Stream project large parts of the corrupt political systems of Eastern European and the Balkan countries i.e. Serbia, Greece, Bulgaria and Hungary. As you can see at the following map, the main leg of the South Stream, its upper leg, would pass through Serbia, and Hungary, two countries which are under Russian influence.

Picture 51

South Stream

One can only imagine the pressure that Putin must have exerted on the politicians and journalists in these countries. Putin’s friend in these countries invested heavily on the South Stream project. At the following Financial Times article, titled “Anger and dismay as Russia scraps $50bn gas plan”, December 2014, you can read about the disappointment that the cancellation of the South Stream caused in Serbia, a traditional Russian ally. Serbia’s Prime Minister said that Serbia has been investing for seven years on projects related to the South Stream, and now his country has to pay the price for a conflict between the great powers.

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Aleksandar Vučić, Serbia’s prime minister, told the country’s RTS channel that the decision was bad news for Belgrade and said he would urgently seek to speak with Mr Putin. “Serbia has been investing in this project for seven years, but now it has to pay the price of a clash between the great [powers],” he said.

Italy and Austria have also been vocal supporters of the venture, pitting themselves against the commission.

Shares in companies with contracts for South Stream also suffered. Stocks in Italian oil services groupSaipem closed down 10.8 per cent, while Germany’sSalzgitter, whose joint venture is making pipes for the project, was down 7.4 per cent. Other businesses involved in South Stream include Italy’s Eni and Austria’s OMV.

http://www.ft.com/intl/cms/s/0/1a5954f0-7a41-11e4-a8e1-00144feabdc0.html

After the cancellation of the South Stream, Putin had to answer to his people in these countries. With Russia facing a severe financial crisis, cancelling the South Stream, blaming it on Bulgaria and the EU, might have been a way out for Putin, in order to avoid admitting that Russia does not have the financial strength to continue with the South Stream on its own right now. Given also that Gazprom has to spent 100 billion dollars to build the Altai Pipeline and the Power of Siberia Pipeline, that were agreed between Russia and China, the announcement of the Turk Stream and the cancellation of the South Stream might have saved Putin’s face, giving him some time to see what to do next. If his people in Bulgaria, Serbia and Hungary are upset, he does not have to apologize and say that right now Russia does not have the required resources. He can blame it 100% on the EU and the Bulgarian government.

Moreover Putin really needs Erdogan, the Turkish President, because it is through Turkey that the competing to Gazprom pipelines will pass in order to reach Europe. By giving him the option of the Turk Stream, Putin offers Erdogan an alternative to the Southern Energy Corridor. After all there are many tensions between Turkey and the EU, due to the EU refusal to accept Turkey as a member, and for many other reasons, and there are many tensions between Turkey and the US, because the Americans did not help Turkey as much as Erdogan wanted, in Turkey’s efforts to overthrow the Syrian dictator Bashar al-Assad. Moreover the EU and the US are putting pressure on Erdogan on the issue of freedom of speech. This is something that unites Erdogan and Putin, who both share the same vision of authoritarian ruling. Both Putin and Erdogan oppress their opposition and do not tolerate criticism. They even attack Facebook and Twitter.

For the similarities between Erdogan and Putin you can read the following Guardian article, titled “The two angry men on Europe’s borders: loud, proud, and impossible to ignore”, October 2014, which explains the similarities between Erdogan and Putin. I must say that Turkey and Russia are two regional rivals, and they fight proxy wars in many places, but the two leaders are almost identical, and that is something that they both appreciate in each other.

The article says that Erdogan is a Muslim Brother, and he aspires to be the leader of Sunni Muslims in the Middle East, and Putin is using the Orthodox Church, in order to be the leader of the Slavs. According to the Guardian both leaders claim that their countries are the victims of the West, and they have a mania with conspiracy theories. However the article mentions that Turkey’s NATO membership and the issue of Syria are a big problem for the relations between the two leaders.

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Erdogan and Putin have much in common. Both in their early 60s, they have been in power for a long time (since 1999 for Putin, since 2002 for Erdogan), holding either the position of prime minister or president. They aspire to be fathers of the nation. Their political narrative mixes nationalism and anti-liberal traditionalism.

Their vision of society, as well as their methods of governance, run counter to the values Europe promotes. They concentrate power, repress opposition, restrict media freedom, control the internet, and have cowed the judiciary. Both play religious cards. Erdogan’s ideology is that of the Muslim Brotherhood: he sees himself as the defender of Sunni Muslims in the Middle East. Putin uses the Orthodox church to boost patriotism, and strengthen Russian influence in the Slavic world.

Restoring national pride is central. Their historical narrative is about victimisation by the west: Erdogan has attacked the “making of Sykes-Picot agreements”, in a reference to the 1916 Franco-British carve-up of the Ottoman empire; Putin vituperates against the “so-called victors in the cold war” that have “decided to reshape the world” and “committed many follies”. The self-inflicted bankruptcy of former empires is rarely mentioned, nor the legitimate aspirations of the peoples they dominated.

Things weren’t always this bad between them and the west. Putin initially took steps to align himself with George W Bush’s “war on terror” after 9/11 and later played along with Obama’s “reset” strategy. The European Union offered Russia a strategic partnership.

Erdogan was initially seen as a reformer who would lead his country towards Europe. Turkey was also lauded in the early stages of the Arab spring as a model of a secular state combining democracy and Islam.

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An important common feature between Erdogan and Putin is their obsession with conspiracy theories. All political opposition is ascribed to western-led plots. Both have faced popular protests in recent years. In June 2013 Istanbul’s Gezi park youth movement spread to many Turkish cities. In 2011 and 2012 hundreds of thousands of urban middle-class Russians demonstrated against Putin’s rule. The upheavals were repressed and seem to have fizzled out, drowned out in waves of resurgent nationalism.

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Yet for all the similarities there are fundamental differences. Erdogan and Putin disagree over Syria: regime change in Damascus, as promoted by Erdogan, is anathema to Putin. Russia has nuclear weapons and gas. Nato membership is ultimately Turkey’s sole protection against insecurity in the Middle East. Erdogan asked for the deployment of US Patriot missiles in 2012 when the Syria war risked spilling over.

http://www.theguardian.com/commentisfree/2014/oct/29/europe-two-angry-men-west-vladimir-putin-recep-tayyib-erdogan-russia-turkey

Another very good article about Putin’s extremely authoritarian regime is “15 Years of Vladimir Putin: 15 Ways He Has Changed Russia”, March 2015, also published by the centre-left Guardian. In the 11th paragraph the article says that in 2004 Putin changed the law in order to be able to choose the local governors. In the 23rd paragraph the article says about the cooperation between Putin and Kim Yong Hun, the communist dictator of North Korea, and also mentions that Kim Yong Hun has built forced labour camps in Russian territories of East Siberia.

In the 28th paragraph the article says that Putin calls a traitor anyone who dares to criticize him in Russia. In the same paragraph Guardian mentions the assassination of Boris Nemtsov, Putin’s major political opponent. Nemtsov was murdered outside the Kremlin, which hosts the Russian government and the residence of the Russian President, in a highly symbolic act of violence. In the 30th paragraph the article says that by introducing vague legislation, Putin obtained the right to attack the internet, in order to close down sites that criticize his oppressive regime. According to the Guardian, in 2014, a new law was introduced, which forces even amateur blogers to register with the government. These blogers are now subjected to the same regulation that professional journalists are.

In the 32nd paragraph the article says that Putin has been very tolerant towards aggression against homosexuals, which in turn led to an increase in violence against homosexuals. In the 40th paragraph the article says that the Sochi Olympics cost approximately 50 billion dollars, but it is estimated that 30 billion were stolen by the corrupt political system of Russia. In the 45th paragraph the Guardian says that Putin appointed as the man in charge of the state owned media Dmitry Kiselyov, a journalist who is specialized on conspiracy theories about the US.

http://www.theguardian.com/world/2015/may/06/vladimir-putin-15-ways-he-changed-russia-world

Moreover with the announcement of the Turk Stream Putin offered Erdogan large discounts on the prices of natural gas. I guess Putin must have asked some favors in return for these discounts, like Turkey’s support in the Ukrainian crisis, since Ukraine is not very important for Turkey’s energy policy. I mentioned before the 6% discounts that Putin offered Erdogan, but according to Turkish officials by the end of February 2015 Turkey managed to receive a discount of 10.25% on the prices of natural gas, but even these prices are not enough for Turkey, as you can read at the following Euractiv article, titled “Political concerns mar Turkish Stream project”, March 2015.

The article also mentions that the Turkish Energy Minister Taner Yildiz said that Russia must be patient on the issue of the Turk Stream, because the issue is not only the Turk Stream, but Turkey’s energy policy as a whole.

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Turkish concern about over-dependence on Russian energy, and an upcoming election, mean Russia’s plans for a new gas pipeline to Southeastern Europe are unlikely to advance as quickly as Moscow might like, Turkish energy officials said today (11 March).

Facing objections from the European Union, Russia in December abandoned its $40 billion South Stream project which would have been extended under the Black Sea to Bulgaria, and carry up to 63 billion cubic metres (bcm) of gas annually to Europe.

Instead, Russian gas exporter Gazprom said in January it planned to build an undersea gas pipeline with the same capacity to an as-yet unbuilt hub on the Turkish-Greek border by the end of 2016.

 But officials in Ankara said that timeframe for the project, known informally as Turkish Stream, was unrealistic.

“The issue is not Turkish Stream alone. This is a whole package for Turkey’s energy needs. We need to be a little bit patient,” Energy Minister Taner Yildiz told Reuters.

Turkey is already heavily dependent on Russia for natural gas. Last year it bought 27.33 bcm of gas through the Blue Stream and West-East pipelines from Russia, equivalent to more than half of its gas imports.

Russian state nuclear company Rosatom is also building Turkey’s first nuclear power plant.

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A second government official said negotiations over the import price for Russian gas were also a factor. Turkey secured a 10.25% discount in late February, but wants more.

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But it is very likely that Russia will be confronted with the problem of Turkey’s ambitions. Unlike Ukraine, which plays the classical role of a transiting country, Turkey would like to buy the gas from Russia and sell it to the EU. This would considerably increase the political weight of Turkey and make the EU even more dependent on third parties.

http://www.euractiv.com/sections/energy/political-concerns-mar-turkish-stream-project-312815

The above are benefits that Russia enjoys simply by announcing the Turk Stream. Putin is threatening the EU, because the EU knows that Europe cannot live without Russian natural gas and oil, and he is threatening Ukraine, which is equally dependent on Russian gas. Putin is also punishing Bulgaria, which obeyed the European regulations, and he is rewarding Greece, which is the problematic child of the European Union.

Moreover Putin is saving his face in the countries that had high hopes for the South Stream i.e. Serbia and Hungary. He is also strengthening his relations with Erdogan, whom he needs in Ukraine. All the above are benefits that Russia enjoys by simply announcing the Turk Stream, before even signing an official contract with Turkey.

How the Announcement of the Turk Stream Benefits Turkey

For Turkey the announcement of the Turk Stream was a gift sent from heaven. Even though the actual construction of the project could harm Turkish interests, as I already explained, the announcement of the project can only benefit Turkey. Erdogan already got generous discounts on the price of the natural gas that Turkey is already importing from Russia. And what did Erdogan gave Putin in return? Erdogan simply gave Putin a public handshake for the Turk Stream, without even signing a binding agreement. Putin and Erdogan simply signed a memorandum of understanding, which says that the two parties have to examine the project.

For Erdogan it is very useful to have Putin depending on Turkey, because Erdogan has slammed Syria, Israel, Cyprus and Egypt, all of whom count on Russia’s support. At the same time Erdogan sends a message to the EU and the US, telling them that Turkey has an alternative to the TANAP project, in order to get more diplomatic and financial support from them.

At the same time Erdogan sends a message to Iran, to Azerbaijan, to Turkmenistan, to Qatar and to the Iraqi Kurds, telling them that Turkey has an alternative to TANAP, in order to receive higher discounts and transit fees. And it is true that Turkey has alternatives, because it could cancel the TANAP project and send the Russian natural gas to Europe. Of course if Turkey was to do that, it would no longer be a true NATO member and this would not be an easy decision for Turkey. But the Russian option is there if Turkey ever decides to exercise it. But the truth is that nobody really expects Turkey to do so, at least not for now. But the option is on the table, and that makes a huge difference.

And at the end of the day if the Turk Stream can be constructed without jeopardizing TANAP, so much better for Turkey. She will have at her feet the US, the EU, Russia, Iran, Azerbaijan, the Iraqi Kurdistan and Qatar, if Qatar is finally connected with Turkey through the Qatar-Turkey pipeline. To have the US, the EU, Russia, and the countries of the Caspian Sea and the Middle East depending on Turkey, is more than Erdogan could ever dream of.

That’s why Turkey was so aggressive towards Syria, when Assad did not agree to the Qatar-Turkey pipeline but agreed to the Iran-Iraq-Syria pipeline. And that’s why Turkey was so aggressive towards Israel, which backed the East Mediterranean pipeline. Turkey is also very aggressive towards Sisi’s Egypt, because if Egypt is not controlled by the Muslim Brotherhood, she might send her natural gas to Europe through the East Med pipeline. If she is controlled by the Muslim Brotherhood she will sell her reserves at places that do not harm Turkey.

Note that Egypt has 2 trillion cubic meters of natural gas reserves, Israel has 1 trillion and Cyprus has less than 0.5 trillion of reserves. However Egypt is facing a falling production and currently she is importing natural gas in order to meet her export agreements. The 3.5 trillion cubic meters of Egypt, Israel and Cyprus is not much when compared to Russia’s 48 trillion, or Iran’s 33 trillion, or Qatar’s 25 trillion, or even Saudi Arabia’s 8 trillion, but it is enough to send Europe 10-20 billion cubic meters of natural gas every year for many decades. But for the moment Egypt needs to buy natural gas in order to meet her export contracts, and therefore what mostly worries Turkey and Qatar for the moment is that Israel and Cyprus can sell natural gas to Egypt. If the Muslim Brotherhood was running Egypt, Egypt would never buy natural gas from Israel. Egypt would prefer to buy natural gas from Qatar even at higher prices.

At the following Guardian article, titled “Israel sees ‘stars aligned’ for new gas pipeline to Europe”, December 2014, you can read that if Turkey puts too much pressure on the European Union, the European Union might have to go for the Israel-Cyprus-Greece pipeline (East Med), which could send to Europe 10 billion cubic meters of natural gas every year. But the Palestinians warn that this can not happen unless there is a solution to the Israeli-Palestinian conflict. The article refers to the Palestinians but it really means Turkey and Qatar, who are the countries controlling Hamas, which is the affiliate of the Muslim Brotherhood that is running Gaza. By mentioning the Palestinians the article is also referring to the Iranians, who control Hezbollah, which is the terrorist organization operating at the Israeli-Lebanese borders, but who also have significant leverage over Hamas.

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Israel and Cyprus have launched a new push for EU funds to build a pipeline that could bring about 10 billion cubic metres (bcm) of their natural gas to Europe annually, and ease the continent’s energy security anxieties.

But Palestinians are warning that without a broader resolution of regional disputes, the pipeline risks becoming a source of conflict.

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But the Palestinian Authority cautioned the EU against signing any contract until territorial gas disputes with neighbouring countries such as Lebanon were resolved.

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But until now, political instability has hindered its exploitation, with Israeli and Cypriot claims to overlapping gas fields contested by Lebanon and Turkey, respectively.

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The planned offshore pipeline, which diplomats say could transport between 8-15bcm of natural gas annually, has already been selected for “project of common interest” status by the EU. This potentially gives it access to a €5.85bn fund, and preferential treatment from multilateral banks.

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commission timeline estimates that the pipeline could begin pumping gas by 2020, four years after the Leviathan field, which contains around 450bcm of gas comes online.

As well as Leviathan, the already operating Tamar field has proven reserves of 283bcm. Israel also has several smaller gas fields and is searching for more exploitable reserves. The country wants to export up to 60% of the gas it produces, Feldman said.

http://www.theguardian.com/world/2014/dec/01/israel-sees-stars-aligned-for-new-gas-pipeline-to-europe

 The Cost of the South and the Turk Stream

It must be also mentioned that the South Stream pipeline was announced in 2006. The economic climate of 2006 was very different from the economic climate of 2014. In 2006 it might have been possible for Russia to finance a 40 billion dollar pipeline, but this became much harder after the economic crisis of 2008 and especially after the economic sanctions that have been imposed on Russia in 2014. Moreover there is the issue of the falling oil prices that hurt the Russian economy which heavily depends on oil exports. The oil prices are falling because Saudi Arabia increased dramatically her production in order to hurt the Russian and Iranian economies, because the Russians and the Iranians are arming Assad in Syria. Both Russia and Iran depend on their oil exports.

At the following BBC article, titled “Was Russia’s South Stream too big a ‘burden’ to bear?”, December 2014, you can read that the most plausible explanation for the cancellation of the South Stream is Russia’s economic problems. According to BBC not only Russia is facing a severe economic crisis but she also needs 100 billion dollars to construct the natural gas pipeline of East Siberia, which will connect Russia and China.

BBC is referring to the recent 400 billion dollar agreement between Russia and China, according to which Russia will start selling China 38 billion cubic meters of natural gas every year for the next 30 years. However for this agreement to materialize a modern pipeline network must be built, which will connect Russia and China, and that’s what BBC is talking about. At the following rough map you can see the Altai Pipeline, which will connect Western Siberia and China, and the Power of Siberia Pipeline (POS), which will connect East Siberia and China.

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Power of Siberia and Altai Pipeline

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“It may be a bluff,” said Martin Vladimirov, an energy specialist at the Centre for the Study of Democracy in Sofia, “to pressurise the Bulgarian, Serbian, Hungarian and Austrian governments to unite behind accelerating the project, and make a better case for it to the European Commission”.

However, he favours a second explanation, that South Stream is “simply too big a burden” amid the difficult financial situation facing Russia’s state-owned giant Gazprom.

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Instead, Mr Vladimirov believes, Gazprom is looking to new markets, turning its gas strategy eastwards. “It would need $100bn in the next four to five years to develop the Eastern Siberian fields and construct a pipeline to China,” he says.

Scrapping South Stream comes as a setback to the governments in Hungary and Serbia, among the strongest backers of the project, alongside the Austrian company OMV and the Italian ENI.

http://www.bbc.com/news/world-europe-30289412

Below you can see a rough map of Siberia. Siberia is the Russian territory that extends from the Ural Mountains to the Pacific Ocean.

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Siberia

At the following Natural Gas Europe article, titled “ENI may Cap South Stream Participation”, November 2014, you can read that ENI, the Italian energy giant which held 20% of the shares of the South Stream project, announced that it would leave the South Stream project if the cost kept rising. Note that ENI’s largest shareholder is the Italian government which holds 30% of ENI’s shares. After the cancellation of the South Stream in December 2014, Russia bought the shares of the South Stream that were held by ENI, in order to compensate the company for its losses.

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ENI has indicated that it may leave the Gazprom led South Stream gas pipeline project should the Italian state-controlled energy be required to commit greater financial resources that initially expected. 

http://www.naturalgaseurope.com/eni-south-stream-financing

It is generally accepted that the South Stream was never an economic project. Russia and Europe needed the South Stream in order to overcome the crises in the Russian-Ukrainian relations which in the past have left many European countries without natural gas supplies. Russia also wanted the South Stream in order to make it harder for a competing pipeline to be built and compete with Gazprom in Europe. Therefore it is clear that the South Stream was a political and not an economic project.

At the following London School of Economics article, titled “Who are the winners and losers from the cancellation of the South Stream pipeline”, you can read that the South Stream was a political project, and its main purpose was to prevent the construction of Nabucco, and that the Turk Stream is also a political project, and its purpose is to prevent the construction of TANAP.

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At this stage, it is more difficult to tell whether Russia and the European Union will gain or lose from the cancellation of South Stream. As far as Russia is concerned, this may sound paradoxical, as the project was Moscow’s brainchild. Gazprom has lost an opportunity to further strengthen its position in the EU energy market.

However, from an economic viewpoint, the construction of South Stream made little sense at a time when European gas demand is dwindling and gas prices are low. South Stream was primarily a political project and had already achieved one of its key political aims: derailing the Nabucco project and perpetuating the European Union’s dependence on Russian gas.

Moreover, Putin’s decision to shift gas exports toward Turkey may have a similar political function: a new Russia-Turkey pipeline may compete with TANAP and reduce its economic viability. To pursue this aim, Moscow has already put pressure on Turkmenistan not to supply TANAP (Azeri gas supplies are limited and Turkmeni gas would strengthen the economic rationale of the pipeline).

http://blogs.lse.ac.uk/europpblog/2014/12/18/who-are-the-winners-and-losers-from-the-cancellation-of-the-south-stream-pipeline/

Similarly to the South Stream and the Turk Stream pipelines, the pipelines supported by the US and EU are geopolitical projects too. That’s the reason it was so difficult for Nabucco to come to life, even though it was supported by the EU and the US. Nabucco did not have much commercial rational, and that’s also the reason TANAP faces so many difficulties. However TANAP makes more economic sense when compared to the South and the Turk Stream, because the countries of the Caspian and the Middle East are not connected to Europe through a pipeline network, while Russia is already very well connected to Europe through various pipeline networks.

But in a market economy, where geopolitics would not matter, and economic nationalism would not exist, the Caspian countries could send their natural gas to Europe through Russia. That would cost much less because Russia is already connected to Europe (see following map).

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TANAP through Russia

Unfortunately economic nationalism does not allow the market to take care of global energy. As long as this economic nationalism exists in the energy sector world wars will keep braking out. Anyway this is not an essay about economics but about geopolitics. I want to mention one more article from the New York Times, titled “Russia Presses Ahead With Plan for Gas Pipeline to Turkey”, January 2015. You can read that under the current financial conditions it makes sense for Russia to go for the Turk Stream, which will only cost 10 billion dollars, instead of the South Stream, which would cost 40 billion dollars. According to the New York Times Turkey is more interested on discounts for the natural gas that she already imports from Russia than on the Turk Stream.

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Energy economics played a role, too. The price of natural gas in Europe has dropped along with the cost of crude oil, and slow industrial demand is expected to mean sluggish growth for the European gas market. Russia’s finances have been hit by falling oil prices. So a new pipeline estimated to cost as much as $40 billion to deliver gas mainly to small European countries like Hungary and Serbia made little sense.

Industry analysts estimate that the cost of Turkish Stream would be about $10 billion for Gazprom, which so far has spent an estimated $4.7 billion on the Black Sea project.

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To avoid wasting years of preparation and lengthy contract negotiations, Gazprom has quickly secured control of the Dutch company. In late December Gazprom said it was buying out its Western partners: Italy’s oil giant, Eni; the French utility Électricité de France; and BASF’s Wintershall oil and gas subsidiary. The companies said they would be compensated for their cash outlays so far, an estimated $750 million.

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Another potential sticking point is Turkey itself. For one thing, the country obtains about 60 percent of its gas from Russia, a dependence the government is not necessarily eager to increase.

Talks between Russian and Turkish officials on matters like the precise route and financial terms of a deal are said to be proceeding slowly. That is partly because the Turkish government appears to be trying to use Gazprom’s need for a face-saving alternative to South Stream as leverage to negotiate lower prices for Russian gas, according to a Turkish official, who spoke on the condition of anonymity because of the sensitivity of the negotiations.

http://www.nytimes.com/2015/01/22/business/international/russia-presses-ahead-with-plan-for-gas-pipeline-to-turkey.html

Greece between Russia and Turkey

Even though Greece cannot be compared to Russia and Turkey in military terms, she plays a very important role in the energy game that is taking place between these two countries.

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Greece Russia Turkey

Τhe Christian Orthodox church is the main religion in Greece, Russia, Bulgaria and Serbia, while Turkey and Albania are predominantly Muslim countries. Greece, Serbia and Bulgaria form a wall which prevents Turkey from reaching Albania, the Adriatic Sea and Southern Europe. It would be much better for Turkey if Albania and Turkey were geographically connected. If that was the case Turkey could send the natural gas and oil of the Middle East and the Caspian Sea to the Adriatic Sea and Italy, through Albania, without having to rely on Russian allies. Moreover, as you can see at the following map, if the Islamic State, which is supported by Qatar and Turkey, manages to secure a land corridor in Syria and Iraq, Turkey could reach the Persian Gulf bypassing the governments of Syria and Iraq, which currently are under Iranian and Russian influence.

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Οθωμανική Αυτοκρατορία

The red area at the following map shows the areas of Syria and Iraq which were controlled or contested by ISIS at the beginning of 2015. The Islamic State has done a good job in order to break the Iran-Iraq-Syria axis.

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ISIS controlled or contested

But even if the Islamic Army does not manage to connect Turkey with the Persian Gulf, there might be regime changes in Syria and Iraq, which might move these countries from Iranian towards Turkish and Qatari influence. Sunni Muslims constitute the majority in the Syrian population. Therefore Turkey and Qatar, which are predominantly Sunni countries, might manage to gradually outweigh the Iranian influence in Syria, because Iran is a predominantly Shia (Shiite) Muslim country. Shia Muslims constitute the majority of the population in Iraq.

If one way or the other Turkey manages to reach the Adriatic Sea and the Persian Gulf it would be a revival of the Ottoman Empire. Turkey would partly undo the results of the Balkan Wars of 1912-1913 and the results of the First World War for Oil 1914-1918, which cost Turkey her European and Middle Eastern territories. As you can see at the following map, before the Balkan Wars and the First World War, the Ottoman Empire was stretching from the Persian Gulf to the Adriatic Sea.

The Ottoman Empire before the Balkan Wars of 1912-1913

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1 Ottoman Empire Europe

The Ottoman Empire before the First World War for Oil 1914-1918

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2 Ottoman Middle East

Europe in 1900

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Map of Europe 1900

During the Balkan Wars of 1912-1913, England, Russia and France helped Greece, Serbia and Bulgaria, to annex the European parts of the Ottoman Empire, in order to prevent Germany from constructing the Baghdad Railway. The Baghdad Railway would connect Germany to the Persian Gulf and the Caspian Sea, through her allies i.e. the Austro-Hungarian Empire and the Ottoman Empire. When Greece, Bulgaria and Serbia annexed the European territories of the Ottoman Empire, they formed a wall between the Austrian Hungary Empire and the Ottoman Empire, as you can see at the following map.

The results of the Balkan Wars of 1912-1913

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7 New Borders Balkans

The following map shows the alliances of the First World War. The Ottoman Empire was on the side of Germany, Austro-Hungary and Italy, and Greece and Serbia were on the side of England, France and Russia.

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Alliances

Moreover England, with the help of the Arabs, annexed the Middle Eastern part of the Ottoman Empire. Iraq and Palestine were created, which were under British control, and Syria and Lebanon were also created, which were under French control, as you can see at the following rough map.

The Middle East after the First World War.

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8 Sykes Picot Agreement

For more details on how the allies chopped the Ottoman Empire in order to prevent the connection between Germany and the Persian Gulf see my essay “The First World War for Oil 1914-1918”.

Even though in Northern Greece there are regions which are predominantly Muslim, it is very difficult for Turkey to annex these territories and connect to Albania and Italy, as long as Greece is a member of the European Union. After all, as long as Greece is a member of the EU she has to support the TANAP-TAP projects, which are of vital importance for the EU, the US and Turkey. Moreover Greece is a Russian ally, and could not object to the construction of the Turk Stream pipeline either, if the EU was to approve at some point the Turk Stream.

However it is not clear whether it would be better for Turkey to annex the northern part of Greece in order to reach Albania and Italy, or whether it would be better for Turkey to construct the TANAP pipeline without any border changes. In military terms Turkey and Albania have a clear advantage over Greece, and regaining the European parts of the Ottoman Empire is probably a dream for Erdogan. On the other hand, if there was a war in Northern Greece, Russia would make sure that the Greek army had enough weapons to attack the zone occupied by the Turks, in order to prevent the construction of the Trans-Adriatic pipeline (TAP).

But even if Turkey managed to completely neutralize the Greek Army, she could not construct a pipeline network which would send the Caspian natural gas to Europe. The occupied territories would not be recognized by the international community, and it would be impossible for the European countries to have commercial ties with them. Therefore the TANAP-TAP project could be dead for Southern Europe, at least for a while. It is true of course that Turkey has the alternative of FYROM (Former Yugoslav Republic of Macedonia), as you can see at the following map.

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FYROM

The orange X depicts a potential battlefield on the Greek-Turkish borders. As you can see a pipeline network could be constructed following the route Turkey-Bulgaria-FYROM-Albania-Italy. This scenario could be even better for Turkey, because she could gain some of the Greek territories that she lost during the Balkan Wars. After all Turkey and FYROM have excellent relations. That’s why the United States, Turkey and NATO have been trying for many years to bring FYROM into NATO and the EU. NATO countries believed that if Former Yugoslav Republic of Macedonia is not brought into NATO, it will eventually end up in the Russian sphere of influence. And they seem to be right in their judgement.

However as you can read at the following Euroactiv article, titled “Time to unblock Macedonia’s accession to NATO”, April 2013, FYROM’s membership is blocked by Greece. Greece is the only NATO member which opposes the FYROM membership.

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Greece’s ongoing objections to Macedonia’s membership in NATO demonstrates that unlimited veto power threatens to make the alliance less responsive, restrictively bureaucratic, and subject to the mercy of any internal disagreement, no matter how small, writes Sally A. Painter.

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Indeed, Macedonia has made dramatic progress in its effort to join both NATO and the EU. In addition to its economic and political reforms, Macedonia has been an active contributor to NATO’s peacekeeping missions, and is fully recognised by the Alliance. This reality made the 2008 NATO Summit in Bucharest – in which Macedonia’s nomination was blocked by a single government, Greece – particularly distressing. In 2008, Macedonia was clearly ready. Those of us involved in the process all witnessed up close the enthusiasm for Macedonia from nearly all NATO leaders. The unfortunate fact that Macedonia was blocked by a single member was a disappointment– and it should give us reason to rethink a system that allows a single government to hold absolute veto power over the entire Alliance. Is this really the Alliance of shared values?

http://www.euractiv.com/macedonia/macedonia-future-euro-atlantic-i-analysis-518836

 At the following article of Today’s Zaman, titled “Turkey says wants to see Macedonia in EU, NATO”, December 2014, you can read that Turkey is asking that FYROM joins NATO, but Greece blocks its membership. The article also mentions that Russia does not want FYROM to join NATO, because Russia has energy interests at the Balkans.

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Turkish Foreign Minister Ahmet Davutoğlu has said his country wants to see  Macedonia within the European Union and NATO, a long demand by Ankara that was turned down due to a name dispute.

Davutoğlu, who is visiting Macedonia, said in a conference in Skopje on Tuesday that Macedonia is a strategic country in the Balkans and that it is impossible to change “the geography and history,” referring to the fact that the country is both Turkey’s neighbor and it has cultural links due to the Ottoman past.

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Macedonia has an ambition to join the Western military alliance, following in the footsteps of Albania and ex-Yugoslav Croatia, which became members in 2009. It is, however, remains blocked by a long-running dispute with neighboring Greece over the name of the landlocked country.

 Despite Turkey’s calls on the Western institutions to accept Macedonia as a member, Moscow has opposed any NATO extension to former communist areas of eastern and southeastern Europe, part of a competition for geo-strategic influence since the end of the Cold War that sits at the heart of the current conflict in ex-Soviet Ukraine.

Russia has energy interests in the Balkans and historical ties with the Slavs of the region, many of them Orthodox Christian like the Russians. But Moscow’s influence has waned as the countries of the former Yugoslavia seek to join the European mainstream with membership of the EU and NATO.

http://www.todayszaman.com/anasayfa_turkey-says-wants-to-see-macedonia-in-eu-nato_367841.html

Turkey was one of the first countries to recognize FYROM in 1992, as you can read at the following article of the Bulgarian news agency Novinite, titled “Turkey Claims it Was ‘1st to Recognize Macedonia”, December 2012.

http://www.novinite.com/articles/146294/Turkey+Claims+it+Was+%271st+to+Recognize+Macedonia%27

At the following Today’s Zaman article, titled “New gas route through Turkey revives Russian rivalry with West”, February 2015, you can read that FYROM worries because it is in the middle of a fight between the East and the West.

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Macedonia too is in favour of the project, according to a person familiar with official policy on the issue. He said, though, that the government of the former Yugoslav republic was nervous of being caught up in East-West rivalry: “In a battle between elephants, the ants usually suffer the most.”

http://www.todayszaman.com/anasayfa_new-gas-route-through-turkey-revives-russian-rivalry-with-west_373553.html

The problem for the US is that the corrupt political ruler of Former Yugoslav Republic of Macedonia, Nicolas Gruevski, has aligned himself with Putin, as you car read at the following Bloomberg article, titled “Macedonia, the New U.S.-Russia Battlefield”, May 2015.

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Macedonia is a poor, landlocked Balkan country of about 2 million. To the Kremlin, it’s also the newest front in an ideological battle, with the U.S. fomenting regime change to counter Russia’s influence. As is often the case, that view is correct to the extent that Russian interests are aligned with those of a corrupt authoritarian ruler.

Here’s what Russian Foreign Minister Sergei Lavrov had to say last week:

I cannot judge for sure, but it so happens objectively that these events in Macedonia are unfolding against the background of the Macedonian government’s refusal to join sanctions against Russia and an active support from Skopje for the plans to build the Turkish Stream pipeline, to which many in Brussels and across the Atlantic are opposed. We cannot get rid of this feeling that there’s some sort of a connection.

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Undeterred, Putin made a deal with President Recep Tayyip Erdogan to divert the future pipeline to Turkey (a map is available here), hoping to extend it into the Balkans. Serbia, a candidate for EU membership, is going through some soul-searching about the project; to get to Serbia without crossing Bulgaria, the pipeline would need to traverse both Greece (which Russia is trying to court with aid offers) and Macedonia. The U.S. has been lobbying Greece to go with a competing pipeline project that would transport gas from Azerbaijan rather than Russia.

http://www.bloombergview.com/articles/2015-05-19/macedonia-the-latest-u-s-russia-battlefield

At the following article from the Independent Balkan News Agency, titled “Brussels demands Skopje the annulment of Russian “Southern Stream” pipeline deal”, December 2013, you can read that the European Energy Community demanded from the authorities in FYROM to block the South Stream, because FYROM is a member of the European Energy Community, and it has to respect its regulations if it wants to eventually become a full member of the EU.

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European Energy Community has demanded from authorities in Skopje to annul or revise the deal with Russia for “Southern Stream” pipeline.

Janez Kopac, director of the Secretariat of European Energy Community has sent two letters addressed to the Government of Former Yugoslav Republic of Macedonia in relation to the deal between Russia and FYROM for the “Southern Stream”.

“The Secretariat of EEC has come to the conclusion that the agreement between Skopje and Russian Federation about the pipeline is not in compliance with the rules of the Agreement for the Energy Community in the part that relates to expenses, involvement of third parties and charges”, said Kopac in a press release.

 He said that FYR Macedonia, as member of EEC must comply with the agreement and revise the international ratified agreement without further postponements.

“If it doesn’t do it at its own discretion, we will first send a letter and in case there’s no response, then it will face a dispute, because accession in the EU involves the annulment of all agreements that have been reached by a candidate state and which are not compatible with the obligations that emanate from EU accession. Therefore, Skopje must withdraw from the agreement with the Russian Federation for the ‘Southeastern Stream’ pipeline”, said Kopac.

http://www.balkaneu.com/brussels-demands-skopje-annulment-russian-southern-stream-pipeline-deal/

For the corrupt and authoritarian ruler of Former Yugoslav Republic of Macedonia you can read Foreign Affairs “The Balkans, Interrupted. The Protests in Macedonia are Only the Beginning”, May 2015.

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With Macedonia facing potential implosion, with Bosnian unity at its most tenuous since the war, and with Kosovo witnessing a mass exodus of citizens who have given up on its corrupt, divisive government, the three most vulnerable countries of the region stand on a precipice. A slide toward radicalism and inter- or even intraethnic strife, abetted by Russian or Islamist opportunism, is fully plausible. And if it happens, U.S. and European diplomats will be forced to finally answer a question: Who lost the Balkans?

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Macedonia is a prime example of the consequences of sporadic attention. With intensive international help following the outbreak of hostilities between ethnic Macedonians and Albanians in 2001, the country made steady progress in building joint democratic institutions. In 2006, current Prime Minister Nikola Gruevski took office. After four increasingly dubious elections, he has managed to consolidate power by debilitating the judiciary, marginalizing the opposition, and eviscerating independent media. In 2007, Macedonia ranked number 36, ahead of the United States, in Freedom House’s Press Freedom Index. Last year, Macedonia sunk to 123, languishing with the likes of Venezuela. The country’s economy, meanwhile, remains afloat through a sharp and unsustainable rise in borrowing.

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It is typical of the West to seek to avoid a confrontation with Gruevski, allowing him and other figures to keep the region’s open questions simmering. But the one over-arching lesson since the violent collapse of Yugoslavia 25 years ago is that the failure to deal with core problems head-on has only made them harder to resolve in the end. This is especially true in Macdonia’s case, where Greece’s longstanding objections to the country’s name, which Athens sees as theft of Greek heritage, have kept Macedonia out of both NATO (where its membership is on offer) and the EU (with which it is poised to open negotiations). The country’s current instability could have been avoided had Skopje been allowed to proceed towards NATO and EU membership. Rather than move toward autocracy, Gruevski would have been constrained by strict requirements that have proved to empower democratic institutions elsewhere.

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Grueski has seized on international paralysis over the name issue to provoke Greece with tacky appeals to Macedonian nationalism. Most recently, he claimed that the wiretaps are part of an international conspiracy designed to force him to jettison the country’s name. For its part, Athens has recently emerged as a key player in trans-Atlantic attempts to thwart a planned Russian-Turkish gas pipeline, which boosts the ability of the nearly bankrupt country to stand up to Western pressure on the name issue. In short, as in other cases from the region, Western inattention has only made the question of Macedonia’s name more acute and more fraught.

If Macedonia is in acute pain, Bosnia is facing deeper and nearly irreparable injury. Radical Islam and Russian influence are exacerbating ever-present ethnic suspicions. Meanwhile, some of the country’s politicians are taking concrete steps to split the country. Ruling Serb and Croat parties recently announced their commitment to thinly veiled separatist agendas. The Republika Srpska parliament even passed a resolution for a separatist referendum that, for the first time, included a concrete date, 2018, for the incendiary plebiscite. If held, the Serb referendum is guaranteed to reopen hostilities.

https://www.foreignaffairs.com/articles/southeastern-europe/2015-05-10/balkans-interrupted

Therefore it should not be assumed that Turkey will not dare to attack the predominantly Muslim northern part of Greece, in order not to jeopardize her role in the Southern Energy Corridor, because there is the option of FYROM too. If Putin manages to use the corrupt political systems of Greece, FYROM and Serbia in order to block the Southern Energy Corridor, I believe that a war will brake out.

If Turkey knows that Greece has broken her relations with the EU and the US in order to promote Russia’s interests, Turkey could cooperate with Albania to attack Greece and FYROM. However it is not clear whether it is better for Turkey to pass the Southern Energy Corridor without war and border changes or with war and border changes. Russia on the other hand has no benefit from a pro-Russian Greece, which will allow the TANAP-TAP connection, because the TANAP-TAP project is a great threat for the Russian economic interests. A war between Greece and Turkey in Northern Greece could be the best scenario for Russia.

Moreover the European Union is trying to finance the Interconnector Greece Bulgaria pipeline (IGB), and a sea LNG terminal at the Northern Aegean, which will supply the IGB pipeline, and which will also hurt Russian interests. See red lines at the following map.

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Importance of Russia and Turkey

These projects are of vital importance for the European Union, because the European Union wants two things. The first one is that Eastern Europe does not to depend on Russian natural gas. This can be achieved through the TANAP and TAP projects. The second thing that the European Union wants is that Eastern Europe does not to depend on Turkey either, because Turkey is not a western country, and she is not a member of the EU. The only way that the EU can achieve Eastern Europe’s energy independence from Russia and Turkey is through Greece as you can see by the red lines on the above map.

Lithuania has recently built a sea LNG terminal (see yellow lines on the above map). However Lithuania has very limited sources in order to import natural gas. For Lithuania the main alternative to the Russian natural gas is Norway, which has 2 trillion cubic meters of natural gas reserves, but is facing a falling production due to overexploitation. The second option is England, which is already importing more natural gas than she is exporting. Finally there is the choice of the Netherlands, which do not have sufficient reserves either. Greece on the other hand can receive natural gas from Algeria, Libya, Saudi Arabia, Qatar, Iraq, Iran, and the United Arab Emirates. These countries are the largest producers and exporters of oil and natural gas in the world. Therefore Greece is very important for the European Union’s energy security, especially for Eastern Europe.

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Natural Gas Reserves

http://www.eia.gov/countries/analysisbriefs/Iran/iran.pdf

Therefore Russia does not benefit from a large and peaceful Greece, because a large and peaceful Greece which belongs to the European Union would have to accept the TANAP-TAP projects. Greece would also have to accept the pipeline connecting Greece-Bulgaria, and a sea LNG platform in North Aegean, both financed by the EU, in order to supply Bulgaria and Eastern Europe with natural gas. The IGB and the sea LNG platform would have to comply with the EU anti-monopolistic regulations. Actually that’s one of the main reasons the European Union has given all this money to rescue Greece from bankruptcy. It is because of Greece’s great geo-strategic importance that the Europeans have been so patient with the corrupt political system of Greece.

The IGB and the sea LNG terminal hurt Gazprom, the Russian state controlled giant. If Greece was to go to war with Turkey, both the TAP and IGB projects would be cancelled, and Russia’s economic interests would not be hurt. Therefore Russia has a motive to use her huge political influence in Greece in order to make Greece more aggressive towards Turkey.

This is a strange situation. Turkey, a traditional rival for Greece, might have a motive not to attack Greece, in order not to jeopardize the Southern Energy Corridor, and Russia, a traditional ally for Greece, might have a motive to push the corrupt Greek political system into a war with Turkey in order to block the Southern Energy Corridor. It is clear that Greece is facing huge threats at the beginning of the 21st century. If Greece were to exit the Eurozone and the European Union, as most Greek communists and national socialists want, and if Greece were to block the TANAP, TAP and IGB pipelines, in order to promote the economic interests of the Greek political system and Russia, she would put herself in a very dangerous position.

Turkey and Albania could annex her northern part, because she would knew that the US and the EU would not give a damn about Greece. In such a catastrophic scenario Greece could only expect help from Russia, because Russia would arm Greece in order to block the Southern Energy Corridor. The question is whether Greece will dare to exit the Eurozone and the European Union, in order to become a complete Russian satellite, which would allow the rotten Greek politicians to avoid the reforms expected by them from the European. Can the corrupt political system of Greece do something which will lead to Greece’s partition? Could Greece commit suicide?

The Greek political system does not like the European Union very much lately, due to the reforms that the Europeans expect from Greece. For example the European Union expects Greece to establish independent tax and judicial authorities, which will not be controlled by the Greek political system. In other words the European Union expects Greece to become a modern European country, and stop being a Balkan country. The Europeans also expect the Greek political system to open up the energy market, according to the European Union energy regulations.

The problem is that the tax system, the judicial system and the energy market in Greece, all work for the benefit of the Greek political system. Therefore these days the Greek political system does not like the Europeans, and the problem is that the Greek media are controlled by the Greek political system, which means that Greek people are subjected to heavy propaganda. Before predicting whether it is possible for Greece to leave the EU and commit suicide, it is very useful to briefly outline Greece’s foreign relations after World War 2.

After WW2 Greece was allocated to the West i.e. to what is today called NATO, while all the other Balkan countries were allocated to the East and the Soviet Union. After the war there were two strong political forces in Greece, the national socialists and the communists. In Europe national socialists and communists were close allies until the Nazis attacked Russia in 1941. After the German attack on Russia the nazis and the communists became the deadliest enemies in all European countries. But for the period 1939-1941, Nazis and Communists were very close. In 1939 Hitler and Stalin had signed the Molotov-Ribbentrop Pact, according to which Nazis and Communists were splitting Eastern Europe into spheres of influence. The Nazis would take Poland’s eastern part, and the Communists would take Poland’s western part, Lithuania, Latvia, Estonia and Finland. See the following map.

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Molotov Ribbentrop

For the Nazi-Communist alliance see Encyclopaedia Britanicca “German-Soviet Nonaggression Pact”.

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“To this public pact of nonaggression was appended a secret protocol, also reached on August 23, 1939, which divided the whole of eastern Europe into German and Soviet spheres of influence. Poland east of the line formed by the Narew, Vistula, and San rivers would fall under the Soviet sphere of influence. The protocol also assigned Lithuania, Latvia, Estonia, and Finland to the Soviet sphere of influence and, further, broached the subject of the separation of Bessarabia from Romania.

 A secret supplementary protocol (signed September 28, 1939) clarified the Lithuanian borders. The Polish-German border was also determined, and Bessarabia was assigned to the Soviet sphere of influence. In a third secret protocol (signed January 10, 1941, by Count Friedrich Werner von Schulenberg and Molotov), Germany renounced its claims to portions of Lithuania in return for Soviet payment of a sum agreed upon by the two countries”.

http://www.britannica.com/EBchecked/topic/230972/German-Soviet-Nonaggression-Pact

 For a very good article about the Nazi-Communist alliance you can also read Deutsche Welle “Molotov-Ribbentrop Pact: A ‘honeymoon’ for two dictators”, August 2014.

http://www.dw.de/molotov-ribbentrop-pact-a-honeymoon-for-two-dictators/a-17873179

During their alliance, the Russian Communists were supplying the Nazis with oil and grain, and the German Nazis were supplying the Russian Communists with manufactured goods. However Hitler needed more oil for his army and industry and in 1941 he decided to attack Russia, in order to take full control of the oil of Baku (see yellow circle at the following map). But the Communists, with the West’s support, defeated the Nazis at the decisive Battle of Stalingrad, which is today called Volvograd. Hitler was stopped at Stalingrad, and never managed to reach the oil of Baku. See the following map.

Picture 68

Stalingrad

The Greek communists were very lucky. Germany attacked Greece almost at the same time she attacked Russia, and therefore Russia ordered the Greek communists to attack the Nazis. French communists on the other hand, and other European communists, were not that lucky. Germany invaded France before the attack on Russia, and until 1941 the French Communists were treating the Nazis as their allies. For more details see “Communism and Nazism, two of a kind”.

The Nazi attack on Russia broke the Nazi-Communist alliance. After WW2 it was very difficult for the Communists to forgive the Nazis for their betrayal, and the violation of the Molotov-Ribbentrop Pact. That’s what one should keep in mind when examining the relations between the Communists and Nazis in post-war Europe. The same was true in Greece, with a lot of hate between Greek Nazis and Greek Communists.

Greece was allocated to the Western sphere of influence after WW2, and the West had to help the Greek Nazis, since the only other option would have been to help the Greek Communists who were taking orders from Russia, and they wanted Greece to be a Russian satellite. Therefore the westerners had to cooperate with the Greek Nazis whether they liked it or not. With the help of the West the Greek Nazis defeated the Greek Communists in the Greek civil war that followed WW2. In the years that followed WW2 the national socialists wanted Greece to be a true ally of the West, because they could not turn to Russia’s communists for support. Remember that there was a lot of hate between Communists and Nazis in post war Europe, because the Nazis betrayed the communists by breaking the Molotov-Ribbentrop Pact of 1939.

However as time was passing by the hatred between national socialists and communists started fading. Their similar ideologies started bringing them back together. After all the Greek national socialists preferred a state controlled economy than a market economy. It was the Soviet economic system that was closer to what the Greek national socialists had in mind, and not the American one. In Greece it took nationalists and communists more than two decades to reconcile, which was finally done after the Greek military Junta of 1967-1974.

Constantinos Karamanlis, the main nationalist leader of the time, and Andreas Papandreou, the main communist leader of the time, managed to reach an agreement. It was final. The Greek communists and nationalists had managed to reconcile, and with the victory of Andreas Papandreou in the 1981 elections Greece passed under communist control for the first time after the end of WW2. It is true that neither Constantinos Karamanlis nor Andreas Papandreou decided to go for a 100% socialist economy. It was too late for that.

Both Constantinos Karamanlis and Andreas Papandreou used the same economic model, with a very large public sector, and with the Greek government controlling the main parts of the economy, leaving the smaller parts of the Greek economy to the private sector. However even the smaller parts of the Greek economy, which were privately run, were heavily regulated. However it was not only their common economic philosophy which helped Greek communists and nationalists to reconcile. Nationalists had started wishing for a turn towards Russia, loosening the country’s ties with NATO. That was of course true for the Greek communists. This is the 70s and 80s, before the collapse of the Soviet Union, when all communists wanted their countries to belong to the Soviet sphere of influence. For some strange reasons socialists consider the Soviet Union, Cuba, Venezuela, Iran, China, North Korea, to be more democratic countries than the US, England etc.

Actually it was in 1975 that the famous Greek terrorist organization “November 17” murdered Richard Wells in Athens, who was the head of the CIA in Greece. It is widely believed that November 17 was an organization with strong connections to the Greek political system, and that’s why it managed to stay in business for so many decades. The first time that some of its members were arrested was in 2002, because Greece had to organize the 2004 Olympic Games, and there was too much pressure on Greece from western governments.

Many political figures openly say that the November 17 terrorist organization was run by the Greek political system. At the following Enikos article, titled “Kouroublis: Andreas Papandreou was for 20 years the leader of November 17, January 2014, you can read that Panagiotis Kouroublis, a historic member of Andreas Papandreou’s PASOK party, and today a minister of the SYRIZA government, claimed that Andreas Papandreou was for 20 years the leader of the November 17 terrorist organization. “Enikos” is one of Greece’s largest news portals, and it is owned by Nikos Chatzinikolaou, who is one of the biggest Greek journalists. Unfortunately the article is written in Greek.

http://www.enikos.gr/politics/205715,Koyroymplhs:_O_Andreas_Papandreoy_htan_e.html

Constantinos Karamanlis, the great nationalist socialist Greek leader, withdrew Greece from NATO in 1974, and it cannot be a coincidence that in 1975 the Marxist organization November 17 killed the head of the Greek CIA division.  That was 6 years before the communists came to power. The communists would have not dared to kill the CIA chief if they new that the nationalists would not approve. The assassination of Richard Wells was for the Greek-American relations what the 9/11 attack on the Twin Towers of New York was for the American-Saudi relations.

In the same way that the US was becoming a constraint for a further strengthening between the Saudi-Chinese relations, the US was becoming a constraint for a further strengthening between Greece and the oil rich Soviet satellites. Oil rich Saudi Arabia wanted closer relations with China, because China was becoming a major oil importer. Oil poor Greece wanted closer relations with oil rich Russia, Algeria and Libya, because they were major oil exporters, and they were all run by highly corrupt political systems, which is something very convenient for Greece’s rotten politicians. For more details on Saudi Arabia, the US and the 9/11 attacks on the Twin Towers see “USA Russia & China in the Middle East: Alliances & Conflicts”.

As you can see at the following map, Algeria and Libya, which are both oil exporting countries and Soviet allies, are in Greece’s neighbourhood.

Picture 69

Algeria Libya Greece

You can read about how the Soviet Union was arming Libya and Algeria at the following two articles.

“Country Studies: Algeria”

1st Paragraph

In spite of periodic reports that Algeria was negotiating with European manufacturers to produce weapons systems under license, the country continues to depend heavily on outsiders to supply the ANP. From independence through the 1980s, Algeria’s most important supplier remained the Soviet Union. It was estimated that nearly 90 percent of the equipment in the ANP inventory in 1993 was of Soviet origin. Algerian leaders have frequently stated their desire to diversify their sources of arms and to obtain access to up-to-date Western equipment, but the country’s straitened economic circumstances have precluded a major shift to purchases from the West.

http://countrystudies.us/algeria/172.htm

 “Where is Gaddafi’s vast arms stockpile?”, October 2011

8th Paragraph

Those looking for explanations for his ability to hold on to power for so long must examine the ease with which Gaddafi was able to purchase billions of dollars’ worth of arms since 1969, fuelled by Libya’s massive reserves of oil. From 1970 until 2009, and even with a long-term UN arms embargo in place between 1992 and 2003, Libya spent around $30bn on weapons. Most of this was sourced from the USSR (and, more recently, Russia): a total of $22bn. But equally important were sources of sophisticated Western weapons, which Gaddafi used as major force multipliers. France and Germany made the most hay while the arms trade sun shone, earning $3.2bn and $1.4bn respectively.

http://www.theguardian.com/world/2011/oct/26/gadaffis-arms-stockpile

Prime Minister Rallis brought Greece back to NATO in 1980, amid severe criticism by the communists. However Greece was never again a true member of NATO. She was systematically buying Russian arms and she was systematically performing military exercises with Russia. For Andreas Papandreou’s anti-American foreign policy you can read a very good article written by the Foreign Affairs magazine in 1984, titled “Papandreou’s Foreign Policy”. Andreas Papandreou had studied and lived for many years in the United States, and he had worked in the American academia too. Why was he so anti-American? He hated America because he was a communist. All communists and national socialists hate the United States because the US proves how inferior their ideologies are. Even American communists hate the United States.

The Foreign Affairs article says how much Andreas Papandreou admired the Libyan, Syrian and Iraqi regimes. It is of course no coincidence that Libya, Syria and Iraq were the allies of Russia in the Middle East. In the 15th paragraph of the article you can read that Andreas Papandreou described the oppressive Qaddafi regime in Libya as a “direct democracy which is pursuing the most revolutionary course of our time”. In the 24th paragraph you can read about the Marxists who joined Papandreou’s party in the period 1974-1977, and the decisive role they played in the victory of the 1981 elections.

In the 56th paragraph you can read that contrary to Greece’s western allies, Papandreou followed an extremely anti-Israel policy, endorsing the views of the most extreme Arab states. In the same paragraph you can read that Andrea’s Papandreou was an enthusiastic supporter of the Palestinian leader Yassir Arafat, another Soviet ally, and that he concluded an agreement with the Syrian dictator Assad, the father of the current Syrian dictator, in order to combat “world imperialism and racist Zionism”.

15th Paragraph

During this period Papandreou was quite clear about his party’s radical ideology. Social democracy was dismissed as “capitalism with a polite face” and accused of aiming “to preserve the system in order to establish monopolistic and imperialistic capitalism.” He attacked Eurocommunism as a form of social democracy. “When we talk about the Communist Party of Italy,” he said, “we really mean the social-democratic party of Italy.” As for his own model for socialism, Papandreou dismissed Soviet-style “state socialism,” but did not hide his admiration for “the genuine anti-imperialist” forces of the Arab world. “In North Africa and the Middle East,” he said, “Algeria, Libya, Iraq, and, of course, the Palestinian Movement make up the progressive anti-imperialist front. . . . These countries are in the forefront of a struggle against monopolies and imperialism.” After a trip to Libya, Papandreou described the Qaddafi regime as a “direct democracy” pursuing the “most revolutionary course of our time”.΄

 24th Paragraph

The PASOK activists are mainly those who joined the party during 1974-1977, subjected to a heavy dose of Marxist and Third World slogans. They are the watchdogs of “orthodoxy,” and constitute the backbone of an impressive and effective party organization. The role of the activists in Papandreou’s victory in 1981 was surely decisive.

 56th Paragraph

In the Middle East the Papandreou government has also been at odds with Greece’s allies. It has adopted an extreme anti-Israeli stand (which provoked incidents of anti-Semitism in Greece) and endorsed the views of the most extreme Arab states. It was recently revealed that PASOK concluded an agreement of close cooperation with the Syrian Baathist Party aimed against “world imperialism and racist Zionism.”8 Interestingly enough, though the Papandreou government has been Yassir Arafat’s most vociferous supporter, it failed to condemn the Syrian takeover of the Palestine Liberation Organization. Overall, Papandreou’s tendency to take sides in the Middle East has earned him more enemies than friends in the area.

http://www.foreignaffairs.com/articles/39389/john-c-loulis/papandreous-foreign-policy?nocache=1

I must also say a few words about the alliances that existed in the Mediterranean Sea and the Middle East during Karamanlis and Papandreou’s times. The oil allies of the US were Saudi Arabia and United Arab Emirates, and the military allies of the US were Turkey and Israel.

Picture 70

NATO Soviet Alliances

I have marked Egypt with red, because until the middle of the 70s Egypt was a loyal ally of the Soviet Union, first under Gamal Nasser, and then under Anwar Sadat who succeeded Nasser. However Sadat started moving Egypt towards the US in the 70s, and Egypt started receiving from the US generous financial assistance. As a result Egypt also signed a truce with Israel in 1979. Abandoning the Soviet Union was something that Sadat paid with his life, since he was assassinated in 1981.

I have marked Cyprus and the Greek island of Crete with red, even though Cyprus had, and still has, English military bases, and Crete had, and still has, American military bases. In the 70s Greece and Cyprus wanted to throw the British and the American bases out of these two islands, because they wanted closer military relations with Russia. That was for Turkey a great opportunity, and she found the chance to invade Cyprus and annex the northern part of the island. Turkish Cypriots accounted for 20-25% of the Cypriot populations. Before the Turkish invasion there were conflicts between Greek and Turkish Cypriots, and when Greece and Cyprus decided to move closer to the Soviet Union Turkey grabbed the chance and invaded Cyprus. Turkey occupies the northern part of the island to this very day.

I believe that the Cyprus tragedy is the main explanation of why the Greek communists did not dare to throw out of Crete the American military bases, as they had promised to do before their victory in the 1981 elections. Even today Crete and Cyprus host the American and British military bases. However I marked both Crete and Cyprus with red, because both the Greek and the Cypriot rotten political systems were closer to Russia than the US, even though they finally did not dare to throw the American and British bases out of the islands. Another reason, maybe the major one, that the communists did not dare to make Greece a soviet country, after they came to power in 1981, was the huge packages of financial aid that started flowing to Greece from the European Union. It was very difficult for the Greek communists to resist the temptation of grabbing the money.

At the following map you can see Cyprus and Crete’s strategic importance for controlling the Suez Canal and the Red Sea, which is the corridor connecting Europe to the oil of the Middle East (see following map). Moreover controlling Cyprus and Crete is very important because there is natural gas in the East Mediterranean Sea. You can also see on the map that Cyprus is of strategic importance in order to construct or block the Iran-Iraq-Syria and the East Med pipelines.

Picture 71

Cuprus Suez Channel

Actually if you search about the Iran-Iraq-Syria pipeline, which would be constructed and managed by Gazprom, you will see that very often it is mentioned as the Iran-Iraq-Syria-Lebanon pipeline. Obviously the Russians and the Iranians wanted to construct in Lebanon the LNG factory that would liquefy and ship the natural gas to Europe, in order to build it as far as possible from Turkey. Lebanon is near the Southern part of Cyprus which is controlled by the Greek Cypriots.

Some people argue that the Greek political system wanted Greece to move closer to Russia in order to serve the country’s national interests. What is true is that the US needed Turkey more than it needed Greece, because Turkey was militarily stronger than Greece and more important in geographical terms, due to her proximity to the Caspian Sea and the Middle East. However I do not believe that it is ever possible to truly serve a country’s national interests by moving that country from the Western world towards the authoritarian world i.e. the Soviet Union, China, Brazil, Argentina, Venezuela, Iran etc. By “authoritarian world” I mean all countries that are run by socialist or religious regimes. I believe it only serves the interests of corrupt political systems to move their countries towards alliances that are run by socialist and religious regimes.

Anyway, from the 70s the reconciliation between the Greek nationalists and the Greek communists was going very well because both wanted a centrally planned economy and they were both working for Russia in their foreign policy. But things recently changed. At some point a part of the Greek communists started working for Qatar in their foreign policy. Qatar is a small country which is very famous for buying political influence abroad. Even though Qatar is a small country, it is the second largest exporter of natural gas in the world, and it also exports oil. It also has a very small population and therefore Qatar has an abundant liquidity which can be used for bying socialists in foreign parliaments and jihadists in the battlefields.

In Greece Qatar has a lot of influence, mainly with the communists, but also with the nationalists. You never hear Greek nationalists accusing Qatar, even though Qatar is Russia’s main rival in the natural gas markets, as you can see at the following CIA table.

Picture 72

Largest Natural Gas Exporters

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2251rank.html

Similarly you never hear communists accusing Russia. Both communists and nationalists accuse the US. Even though the financing of Russia and Qatar can be found in both the communists and the nationalists, it can be said that the Qatari influence is more intense with the communists, and the Russian influence is more intense with the nationalists. Therefore there are some disagreements between Greek communists and Greek nationalists when it comes to foreign policy.

Communists who work with Qatar want Greece to improve her relations with Turkey, because Turkey is Qatar’s main ally, and nationalists who work with Russia want Greece to be very aggressive towards Turkey, because Turkey is Russia’s main rival. Therefore communists and nationalists are no longer united in their foreign policy, at least not in the way they used to be, when all of them were oriented towards Russia in their foreign policy.

However it is not an easy job for corrupt political parties to support both Russia and Qatar, because they are major rivals in the energy markets. The rivalry between Russia and Qatar in the natural gas market has also made the two countries rivals in the battlefields of the Middle East and North Africa. In the conflicts of the Middle East and North Africa Russia is supporting the anti-Islamists, and Qatar and Turkey are supporting the Islamists.

Russia is supporting Assad in Syria, and Qatar and Turkey are supporting the Syrian rebels. In Egypt Russia is supporting General Sisi, and Qatar and Turkey are supporting Mohamed Morsi. In Libya and Tunisia Russia is supporting the anti-Islamists and Qatar and Turkey are supporting the Islamists. Everywhere in the Middle East and North Africa Russia is supporting the anti-Islamists and Qatar and Turkey are supporting the Islamists. This is of course an energy war between Russia, Qatar and Turkey, and not a religious war as sometimes it seems to be. However for Qatar it is more convenient to finance red socialists abroad than to finance nationalists, because it is easier for red socialists to accept what is called “silent jihad”. Silent jihad refers to the peaceful spread of Islamic fundamentalism in European countries.

It is impossible for me to accurately describe the funding of Greek politicians. I can only offer a vague description, and that’s what I have done so far, but please keep in mind that my description is only an approximation. Besides Qatar and Russia, Greek communists and nationalists are also stealing from the Greek public companies they control i.e. companies of the energy, banking, defence sector etc. They also steal from the tax and judicial systems which are not independent and they are controlled by them.

However something very interesting and scary happened in the last Greek elections of January 2015. A coalition government between communists and national socialists was formed, between SYRIZA (ΣΥΡΙΖΑ), a communist party that won 36% of the votes, and the Independent Greeks, a national socialist party which won less than 5% of the votes. These parties managed to completely overcome their differences because they face a common enemy, which is the European Union. Actually when the SYRIZA came to power, it had no choice but to turn to Russia, because Qatar has lots of money but a very small army. It is Turkey that helps Qatar in military issues.

The required EU reforms is a threat for the Greek communists and nationalists who control the Greek public sector, and it also hurts them because with the EU energy regulations it puts too much pressure on Russia. Therefore communists and nationalists decided to cooperate and work with Vladimir Putin, along Marine Le Pen, the Spanish communists of Podemos, and Victor Orban in Hungary, in order to combat the EU. It is very interesting that 70 years after the end of the Second World War and the Molotov-Riebentropp Pact it is in Greece that a true and strong unholy alliance between Communists and Nationalists emerged. Even the imprisoned leader of Golden Dawn’ neo-Nazi party expressed his support for SYRIZA’s communists, when SYRIZA declared its support for Russia, and started promoting Gazprom and the Turk Stream Pipeline. This is a true alliance of the Molotov-Ribbentrop flavour.

Alexis Tsipras, the new Prime Minister of Greece, appointed Nikos Kotzias and Panos Kammenos as Ministers of Foreign Affairs and Defence respectively. At the following Financial Times articles, titled “Alarm Bells Ring Over Syriza’s Russian Links”, January 2015, you can read about the connections of Mr Kotzias and Mr Kammenos with people very close to Vladimir Putin and the Russian oligarchs.

http://www.ft.com/intl/cms/s/0/a87747de-a713-11e4-b6bd-00144feab7de.html

Note that Panos Kammenos is a nationalist, but Nikos Kotzias is a communist. However both of them have very strong connections with Russia. You can also read about SYRIZA’s Russian connections at Bloomberg’s “Syriza’s Dangerous View of Russia”, February 2015.

http://www.bloombergview.com/articles/2015-02-03/greece-s-syriza-could-be-more-dangerous-on-russia-than-on-debt

At the following Die Zeit article, titled “Caught in the web of the Russian ideologues”, February 2015, you can read how close to the Russian oligarch Constantin Malofeyev is the Greek Defence Minister Panos Kammenos. Malofeyev is a Russian oligarch very close to the Kremlin. The EU has banned Malofeyev from visiting countries of the EU, because he has been associated with the financing of paramilitary organizations in Ukraine. Die Zeit, one of the largest German newspapers, offers a very good description of the close connections between the Russian political system and the Greek political and economic elites. This is a very good article indeed.

http://www.zeit.de/politik/ausland/2015-02/russia-greece-connection-alexander-dugin-konstantin-malofeev-panos-kammeno

I must make clear that SYRIZA was never anti-Russian, even when it was a small party of 3% with strong connections with the Islamists. In the conflicts between the US and the EU on one side, and Russia on the other, SYRIZA has always supported Russia. Qatar mainly sells natural gas to Asia and not to Europe, as you can see at the following Eurostat table.

Picture 73

EU Imports

http://ec.europa.eu/eurostat/statistics-explained/index.php/File:Main_origin_of_primary_energy_imports,_EU-28,_2002%E2%80%9312_(%25_of_extra_EU-28_imports)_YB14.png

You can see that Qatar covers only 8% of the European Union natural gas imports, and it is almost non existent in the European oil markets. Therefore it was not very difficult for SYRIZA to support Russia in Europe, in Russia’s battle with the EU and the US. But what will happen in the Middle East and North Africa where Russia and Qatar are fighting each other? Turkey, Qatar’s main ally, was hoping for a SYRIZA victory in the elections, as you can read at the following article of the Canadian Broadcasting Corporation, titled “Turkey hoping for better relations with Greece after Syriza victory”, January 2015.

1st and 2nd Paragraphs

If political victories were cups of sugar, there are those in Turkey who might love to borrow some from its neighbour Greece.

On social media and in certain left-leaning circles, some Turks were wishing the far left Syriza Party’s win in Greece might signal a bigger shift in the region, to encompass Turkey as well.

http://www.cbc.ca/news/world/turkey-hoping-for-better-relations-with-greece-after-syriza-victory-1.2932172

I cannot predict how the new alliance between the Greek communists and nationalists will handle their foreign policy, because they are working with both Russia and Qatar. However there is one thing that is clear, and that is their hostility towards the European Union which threatens the economic interests of both. And they will work together with Russia to fight the European Union. That’s the big problem that Greece is facing, because the European Union is Greece’s only defence. The EU is Greece’s only shield. Greece does not have the military might to face Turkey and Albania, especially now that Greece is bankrupt. Greece should do some very simple things in order to protect her territory. The first one should be to make all the reforms that are required in order to make sure that Greece remains in the Eurozone and at the centre of the European Union.

Then Greece should help the TANAP and TAP projects, which are of vital importance for the EU, the US, but also for Turkey. If Greece blocks the TANAP and TAP project, in order to promote the Russian economic interests, Turkey and Albania will annex the parts of Greece which have predominantly Muslim populations. The EU and the US will not give a damn about Greece if Greece completely aligns herself with Russia. Can the Greek political system do this fatal mistake? Given how corrupt Greek politicians are, it is impossible to rule out this scenario. After all they have done it with Cyprus in the past.

The other thing that Greece should do is to help the EU as much as possible with the construction of the Interconnector Greece Bulgaria and the LNG terminal in the North Aegean. Greece should also push the East Med pipeline (Israel-Cyprus-Greece), which is another way for the EU to reduce its dependence on Russia and Turkey, increasing Greece’s geopolitical importance. See the following map.

Picture 74

 Competition for Turkey

However the East Med pipeline is a very difficult project because Turkey, Iran and Qatar are all slamming Israel, because the East Med pipeline hurts their economic interests. Russia does not want the East Med either as I explained before. See also “The Israel-Egypt-Jordan Natural Gas Agreement and the 2014 War in Gaza”. Therefore Greece should go ahead with the East Med Pipeline only if the Europeans and the Americans promise to give the project full military and diplomatic support.

Can the Greek political system do what it has to do in order to protect Greece, or it will keep attacking the EU in order to promote Russia’s economic interests and avoid modernizing the Greek public sector, offering Turkey the chance to undo the results of the Balkan Wars and the First World War, making Erdogan a new Kemal Attatourk for Turkey? I cannot predict what will happen but these are very dangerous times for Greece, and it is very easy for Greece to become a new Syria or a new Iraq. Let’s hope that the Greek politicians will not betray Greece once more. But for the moment they are indeed threatening the US and the EU that they will block the Southern Energy Corridor if they insist that Greece must modernize the Greek public sector. Please note that Greece could indeed block the Southern Energy Corridor as you can see on the following map.

Picture 75

Greece to block the Southern Energy Corridor

As you can see on the map, Hungary, Serbia, FYROM and Greece can block the Southern Energy Corridor. The Hungarian Prime Minister Victor Orban is a Russian puppet, Serbia is a Russian ally, and Greece can block the entrance of FYROM in to NATO, since each NATO member can unilaterally block the entrance of a new member state. Today FYROM is on the verge of a civil war, and it has been generally believed for many years that if FYROM does not join NATO and the EU, it will eventually end up in the Russian sphere of influence.

To summarize the strategy that Greece needs to follow I will say the following. Turkey is a much stronger country than Greece, both in military and diplomatic terms. Therefore Greece has to realize that it will be Turkey which will always decide what her first move on the geopolitical chessboard will be, and Greece will have to react accordingly. Therefore if Turkey decides to go for the Southern Energy Corridor, Greece should help Turkey. In that case the Greek and Turkish interests will be aligned in the North Aegean Sea.

If Turkey decides to block the Southern Energy Corridor, and align herself with Russia, the US and the EU will offer all their support to Israel, in order to promote the East Med Pipeline. Under this scenario the interests of Turkey and Greece will be diverging. Greece should align herself with the US and the EU, and oppose Turkey. However it is very unlikely that Turkey will do that. Because Erdgogan knows that if he does so the geopolitical significance of Israel, Greece and Cyprus would be dramatically increased, and the strongest ever alliance between the US and Israel would be formed, because the US would have nothing to expect from Turkey.

Picture 76

Israel Turkey

If Russia was to bring Greece to this hypothetical Russian-Turkish alliance, in order to isolate Israel, NATO would have no other choice but to attack, in order to be able to compete with Putin, who is using the Russian natural gas in an attempt to brake NATO. At the following map you can see that if Russia was to bring Greece into an alliance with Turkey, Israel would not be of much use for the US, because with Greece and Cyprus on the Russian side, Israel would be very isolated.

Picture 77

Israel Isolated

Please note that Iran, Iraq and Syria are Russian allies. Moreover Egypt, under General Al-Sisi, has moved towards Russia, because the Americans supported the Islamists of the Muslim Brotherhood in Egypt. The Muslim Brotherhood is supported by Turkey and Qatar. The US needs Turkey for the Southern Energy Corridor, and the US has its largest military bases in the Middle East at Qatar, and therefore the Americans supported the Muslim Brotherhood in Egypt. It is not that the Americans enjoy working with Islamists, but there are not many options in the Middle East and North Africa. The Americans work and support the Israelis and the Kurds as much as they can, but there is no way for the US to avoid working with the Islamists in the Middle East and North Africa.

From all the above it is clear that the Greek politicians do indeed have something to threaten NATO and the EU. I must also mention another key and dangerous point of the new Greek government’s negotiation strategy.  The new coalition government between SYRIZA and Independent Greeks is trying to play the US against Germany. The thing is that the American and the German interests are to a certain degree diverging, since the German economy is very strongly connected with the Russian one. The Germans have large stakes in the Russian gas through the North Stream, and Putin also gave to German companies a small part of the shares of the South Stream pipeline.

The Germans buy oil and natural gas from the Russians, and the Russians buy manufactured goods from Germany. At the following Wall Street Journal article, titled “German Businesses Urge Halt on Sanctions Against Russia”, May 2014, you can read that German business urge their political system for a halt in the sanctions against Russia.

1st, 2nd, 3rd, 4th Paragraphs

 Angela Merkel is carrying a clear message from Germany’s business lobby to the White House: No more sanctions.

Several of the biggest names in German business—including chemical giant BASF SE, engineering group Siemens AG,Volkswagen AG, Adidas AG and Deutsche Bank AG—have made their opposition to broader economic sanctions against Russia clear in recent weeks, both in public and in private. (Read the latest updates on the crisis in Ukraine.)

As a result, Germany’s position on additional, tougher sanctions is unlikely to shift, barring a dramatic escalation of the conflict in Ukraine—a message Ms. Merkel is expected to deliver to PresidentBarack Obama when they meet in Washington on Friday, officials in Berlin say.

As the Ukraine crisis has worsened, German officials have faced a barrage of telephone calls from senior corporate executives, urging them not to take steps that would damage business interests in Russia, people familiar with the matter say.

http://www.wsj.com/articles/SB10001424052702303948104579535983960826054

Therefore it is much harder for the Germans to take action against Russia than it is for the US. The new Greek government is trying to intensify that. If Greece was to block the Southern Energy Corridor, as the new Greek government threatens it will do, many problems could arise between Germany and the United States. If Greece was to block the Southern Energy Corridor it is almost certain that Turkey and Albania would have to attack Northern Greece, in order to create a corridor connecting Turkey and Albania.

But Germany could not afford to see Erdogan’s Islamist Turkey reaching the heart of Europe. In Germany there are 3 million Germans of Turkish origin, and the rise of Islamism in their countries really worries the Germans and the Dutch and the other Europeans, as you can read at the following Hyrriet article, titled “Netherlands, Germany alarmed over Islamist extremists”, March 2015. Hyrriet is a centre-left Turkish newspaper and it is not in good terms with Erdogan and the Islamists.

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Fearing the spread of radical Islam across Europe, Netherlands raises terror threat level to ‘substantial,’ while Germany bans ultra-conservative groups due to threat of overturning democracy

The Dutch government raised its terror threat yesterday amid concerns that Dutch citizens traveling to Syria to fight in the civil war could return battle-hardened, traumatized and further radicalized.

The government cited the threat posed by jihadist fighters returning from Syria, where rebels are battling government forces, and signs of increasing radicalization among Dutch youth as key reasons for lifting its threat level from “limited” to “substantial.” The level is now the second-highest on the four-step scale, just below “critical.”

 

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Meanwhile, German authorities banned three ultra-conservative Salafi Muslim groups which the Interior Ministry said wanted to overturn democracy and install a system based on shariah. The ban, which took effect in the western states of Hesse and North Rhine-Westphalia in the early morning, is the latest step taken by German authorities who have increased surveillance of Salafis who espouse a radical version of Islam. The ministry said it has banned the organizations “DawaFFM” and “Islamische Audios,” as well as “An-Nussrah,” which is part of the “Millatu Ibrahim” group that was outlawed in June 2012. Some 20 people were searched and assets belonging to the organizations were seized, said the ministry.

http://www.hurriyetdailynews.com/netherlands-germany-alarmed-over-islamist-extremists-.aspx?pageID=238&nid=42916

That’s one of the reasons the Germans are supporting the Greek Cypriots in their conflict with Turkey in East Mediterranean Sea, as you can read at the following Deutsche Welle article, titled “Merkel’s difficult dialogue with Erdogan”, February 2013.

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German Chancellor Angela Merkel expressed support for reviving Turkey’s EU accession process on Monday (25.02.2013), but urged Ankara to take steps towards normalizing relations with Cyprus.

“We want the process to advance, despite the fact that I am still skeptical about Turkey’s full membership of the EU,” Merkel said following talks with Turkish Prime Minister Recep Tayyip Erdogan. She stressed that proceeding with the accession talks would depend on Ankara’s Cyprus policy, and urged Turkey to open its ports and airports to traffic from Greek Cyprus.

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Disagreements between Merkel and Erdogan were not limited to the Cyprus problem. The German chancellor also underlined the importance of press freedom in Turkey and criticized long detention periods for dozens of imprisoned journalists, which critics say are politically motivated. According to the Committee to Protect Journalists (CPJ), some 76 Turkish journalists were in jail as of August 2012, and at least 61 of those were imprisoned as a direct result of their work.

Asked about these charges, Erdogan claimed that less than 10 of these prisoners were journalists. “They are not imprisoned for their journalistic work,” Erdogan said. “They are imprisoned either for participating in coup plots, or having illegal arms or acting in coordination with terror organizations.”

http://www.dw.de/merkels-difficult-dialogue-with-erdogan/a-16628079

At the following Spiegel article, titled “Erdogan Urges Turks Not to Assimilate”, February 2011, you can read that during his very successful tour in Germany, Erdogan urged Germans of Turkish origin not to assimilate. The Germans are not feeling very comfortable with that, given that Erdogan is an Islamist, and he is also supporting the Muslim Brotherhood.

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They have come from all over Germany to see him live, some 10,000 people. They say things like: “The Germans will never accept us, but we have Erdogan.” Or: “At last someone feels responsible for us, for the first time a Turkish prime minister isn’t forgetting his compatriots abroad.” One woman says: “Erdogan may get Merkel to see us as part of this society. He is our savior.”

Some 3 million people of Turkish origin live in Germany, most of them descendants of Turks invited by the government in the 1950s and 1960s as ” guest workers” to make up for a shortage of manpower after World War II.

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In a newspaper interview published ahead of his speech, Erdogan urged Merkel to drop her opposition to Turkey’s accession to the EU. “Never have such political obstacles been put in the path of an accession country,” he said.

And then he repeats the sentence that caused such a stir at a speech heheld in Cologne three years ago. He warns Turks against assimilating themselves. “Yes, integrate yourselves into German society but don’t assimilate yourselves. No one has the right to deprive us of our culture and our identity.”

Erdogan knows that this statement amounts to a provocation in Germany — no politician here is demanding that Turkish immigrants should deny their roots or give up their culture. Erdogan adds: “German newspapers will pick up on this tomorrow, but that’s a mistake.”

http://www.spiegel.de/international/europe/erdogan-urges-turks-not-to-assimilate-you-are-part-of-germany-but-also-part-of-our-great-turkey-a-748070.html

The new Greek government is trying to take advantage of this diversion between the American and German interests, by indirectly saying to the Americans that if they do not put pressure on the EU, in order to give money to Greece without asking for privatisations and reforms, Greece will block the Southern Energy Corridor by stopping the Trans Adriatic Pipeline. On the other hand the new Greek government is also saying to the Germans that if they do not give money to Greece without asking for reforms and privatisations, Greece will block the Southern Energy Corridor, which will force Turkey and Albania to attack Greece, and the United States will have to rush on the side of Turkey to create an alternative to the Southern Energy Corridor and save NATO from the Russian gas. But if the Americans help the Turks and the Albanians, the Germans cannot be on their side, because they cannot afford to see the Islamists reaching the heart of Europe, as would happen if the Christian wall that is formed by Greece and Bulgaria was to fall (see the following map).

Picture 78

Greek Bulgarian Wall

The Islamists of Turkey are a much greater problem for the Europeans than the Americans, and a collapse of Greece could possibly lead in an even greater divergence of interests between the Americans and the Germans. After all Northern European countries are already connected to the Russian gas through the North Stream pipeline, and it is very unlikely that they would be willing to support Turkey and Albania against Greece. For the Northern Europeans it would probably be better if Greece was left bankrupt but untouched. But the Americans and other NATO members cannot see it that way because if there is no Southern Energy Corridor there is no NATO, unless of course Putin decides to make Russia a democratic country, which for the moment seems unlikely.

The Greek communists are threatening both the Americans and the Germans that if they insist on reforms and privatisations they will kill Greece, implying that Greece’s funeral will be very very expensive for both of them. If Greece collapses very dramatic events could be triggered. The Americans and the Germans are not worrying about the economic consequences of a Greek collapse, but they are terrified about the geopolitical consequences of such a collapse.

These are very dangerous games by the Greek communists who are willing to risk Greek land just to save their businesses in the Greek public sector. As you can see at the following article by the British Telegraph, titled “Greece’s defence minister threatens to send migrants including jihadists to Western Europe”, March 2015, Panos Kammenos, the Greek Defence Minister is directly threatening the Germans that Greece will send immigrants and jihadists to Germany.

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Greece will unleash a “wave of millions of economic migrants” and jihadists on Europe unless the eurozone backs down on austerity demands, the country’s defence and foreign ministers have threatened.

The threat comes as Greece struggles to convince the eurozone and International Monetery Fund to continue payments on a £172billion bailout of Greek finances.

Without the funding, Greece will go bust later this month forcing the recession-ravaged and highly indebted country out of the EU’s single currency.

Greece’s border with Turkey is the EU’s frontline against illegal immigration and European measures to stop extremists travelling to and from Islamic State of Iraq and the Levant (Isil) bases in Syria and Iraq.

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“If they deal a blow to Greece, then they should know the the migrants will get papers to go to Berlin,” he said.

“If Europe leaves us in the crisis, we will flood it with migrants, and it will be even worse for Berlin if in that wave of millions of economic migrants there will be some jihadists of the Islamic State too.”

“If Europe leaves us in the crisis, we will flood it with migrants, and it will be even worse for Berlin if in that wave of millions of economic migrants there will be some jihadists of the Islamic State too.”

http://www.telegraph.co.uk/news/worldnews/islamic-state/11459675/Greeces-defence-minister-threatens-to-send-migrants-including-jihadists-to-Western-Europe.html

At the same time Greece is discussing with Russia the possibility of allowing Russia to use Greek military bases, as you can read at the following article of the state owned Sputnik, titled “Greece Might Allow Russia to Use Its Military Bases –Greek Defense Analyst”, April 2015.

http://sputniknews.com/military/20150414/1020893392.html

That’s why the American Minister of Defence embarrassed his Greek counterpart in May 2015. Panos Kammenos travelled to United States to meet the American Defence Minister, and the American minister cancelled the meeting on a very short notice, while Panos Kammenos was already in the United States. And the Americans did not even allow the Greek Minister to see his deputy, as you can read at the following Enikos article, titled “Greek defense min snubbed by US counterpart”, May 2015.

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Defence minister Panos Kammenos, on visit to the United States, will see neither his counterpart, Secretary of Defense Ashton Carter, nor his deputy, Robert Work.

Carter cancelled the meeting over the weekend, invoking a busy schedule.

Kammenos will go to the Pentagon, to meet Christine Wormuth, Under Secretary of Defense for Policy. He will also meet Victoria Nuland, Assistant Secretary of State for European and Eurasian Affairs at the United States Department of State, whom he has already met in Athens.

Reportedly, Greek diplomats were scrambling to upgrade Kammenos’ contacts, without success.

http://en.enikos.gr/politics/29227,Greek-defense-min-snubbed-by-US-couterpart.html

All this game that is being played between Greece, USA and Russia, led the Turks to announce a major military exercise in the Mediterranean Sea in March 2015. This exercise included Greek territories, even though the Turks later cancelled it as you can read at the following Enikos article, titled “Turkey cancels provocative military exercise in Aegean”, March 2015. Enikos is one of the largest Greek news portals.

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 Greece says Turkey has withdrawn a recent notice seeking to reserve a large swathe of airspace over the Aegean Sea for military maneuvers until the end of the year.

Foreign Ministry spokesman Constantinos Koutras said Monday that Turkey has withdrawn the Notice to Airmen, or NOTAM, which it had issued to reserve extensive airspace over the Aegean Sea for military use from March 2 to Dec. 31.

Greece had complained about the planned manoeuvers, which it said would have intruded into Greek airspace, interfered with traffic to two regional airports and affected two international air traffic routes.

http://en.enikos.gr/politics/24919,Turkey-cancels-provocative-military-exercise-in-Aegean.html

Almost at the same time, in May 2015, the Albanians said they have claims over Greek territories, as you can read at the following Kathimerini article, titled “Albanian demarche raises concerns about possible territorial claims over Greece”, May 2015. Kathimerini is one of the largest and most reliable Greek newspapers.

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A strong-worded demarche delivered by Albania to Greek authorities over energy exploration indicates that Tirana is asserting territorial claims along the land border dividing the two Balkan neighbors, Kathimerini understands.

Last week’s demarche, which called on Athens to revise its plans for hydrocarbon exploration in the Ionian Sea on the grounds it would encroach on Albanian territorial waters, also requested Greek officials to make available land surveys of Epirus in northwestern Greece.

Speaking to Kathimerini, diplomatic sources interpreted the move as a clear bid to question existing borders between the two nations. On a political level, the demarche is seen as a high-risk initiative for Albania and bilateral relations.

http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_19/05/2015_550148

I know that to a non Greek all this sound unbelievable. But that’s what happens in all countries that are run by corrupt socialist and religious regimes, it is not just Greece. I have kept asking my self if Greek politicians can actually kill Greece in order to protect their interests in the public sector. I cannot answer this question, but Greek politicians have definitely done it in the past. Before closing the chapter I would like to bring to your attention some very interesting articles about Greece and her role in the energy game between Russia and Turkey.

1) A very good article about Greece and the Interconnector-Greece-Bulgaria (IGB) is Natural Gas Europe’s “Re-affirming The Greek Energy Strategy on Energy Union”, March 2015.

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The next pivotal step towards enhancing Greece’s role in the region is through the realisation of the Greece-Bulgaria Interconnector (IGB) which is the starting point of the vertical corridors which were referred to in the Joint Statement signed by the Energy Ministers of Greece, Bulgaria and Romania on December 9th in Brussels.

IGB’s completion will represent a crucial milestone in the EU’s efforts to build a regional energy market in South East Europe, as it will enable gas flow from TAP and a new LNG facility in Northern Greece to filter into Bulgaria, extending onwards to Central Europe, through the Balkans and South Eastern Europe.

 

After the inaugural meeting of the newly formed Central Eastern South Europe High level working group (CESEC) in Sofia on the 9th February, the Energy Ministers of Greece and Bulgaria agreed to accelerate works related to IGB and set a goal of arriving to a final investment decision in May 2015, ahead of the next CESEC meeting in June.

The projected cost of the IGB currently amounts to €220 million. The project has been awarded the status of a project of common interest, and features in the short term priorities of the EU’s energy security strategy published in May 2014. As such, it has already received €45 million in financing from the European Economic Programme for Recovery, while it has significant potential for further financing – Connecting Europe Facility, Juncker Plan.  

However straightforward this project might seem, significant forces have been delaying its development. Notably, the loss of the Nabucco and the South Stream projects has alienated the Bulgarian authorities, making the next steps in their energy policy unclear.

Bulgaria’s ambiguity is emphasised by the recent agreement of Bulgargaz with Botas on the Turkey-Bulgaria Interconnector (ITB), as well as the Prime Minister’s request to have Turkey participate in the CESEC meeting, only to be rejected by the EU Vice President for Energy Union.

 The situation becomes more complex if we consider that the ‘Eastring’ project – originally planned as a counter balance to South Stream that would link Bulgaria to Romania, Hungary and Slovakia – has been touted as a possible link to Gazprom’s new Turkish Stream concept, which would include the building of a gas hub in Turkey.

Such developments would be at odds with the Greek energy policy as mapped out by the former government. Turkish analysts in Botas have stated that if Greece were to develop newly planned LNG capacity in Alexandroupoli and Kavala, there would be no added value offered by ITB given the relatively small size of the regional gas markets in South East Europe.

The Greek government needs to act swiftly in re-affirming its energy strategy and capitalise on the current willingness from the EU to fund Greek projects – e.g. IGB, Aegean LNG. Greece should build on the political momentum achieved at the EU level following the signing of the vertical corridors declaration on December 9th 2014.

http://www.naturalgaseurope.com/re-affirming-the-greek-energy-strategy-on-energy-union-22487?utm_source=Natural+Gas+Europe+Newsletter&utm_campaign=581fc7ac42-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_c95c702d4c-581fc7ac42-307785513

2) At the following Financial Times article, titled “Tsipras will not find salvation in Moscow”, April 2015, you can read that the new Greek Prime Minister, Alexis Tsipras, might have a motive to default on the Greek debt and turn to Russia for help. According to the Financial Times, what Tsipras can offer Putin is the boycott of the Trans-Adriatic Pipeline, and also vetoing the extension of economic sanctions against Russia. However according to the FT Russia cannot provide Greece with sufficient funds. Moreover the Greek politicians would be scared to replace their European creditors with Russians creditors, because the Russians are much tougher than the Europeans.

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As the range of options for Greece appears to dwindle by the day, is it time for Athens to consider a strategic alliance with Russia as part of some plan B? We may find out this Wednesday when Alexis Tsipras is due to visit President Vladimir Putin of Russia. Greece’s prime minister might be tempted to default on all its foreign creditors and bondholders, exit the eurozone and get Moscow to provide some short-term funding to prevent a collapse of the banking system. In exchange, Mr Tsipras could offer to veto the extension of EU sanctions against Russia. Athens could also boycott the trans-Adriatic pipeline, through which the EU hopes to tap Caspian gas bypassing Russian territory. The longest section of the pipeline, over 500km, would run through Greek territory.

 If only it was so simple. For all the speculation about the logic of such a deal, I remain profoundly sceptical for a number of reasons.

The first is that Mr Putin would probably not be able to bankroll Greece to any serious extent. The Russian economy is in bad shape. According to the latest Russia report by the World Bank it will decline by 3.8 per cent this year, mainly due to the fall in oil and gas prices. The sanctions did not have much of an impact initially. But they have effectively killed off investment, which in turn will lower future growth. The fall in energy prices has also made the sanctions more potent.

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Second, the relationship between a member state and the EU is based on international treaties. Member states have legal rights, and they have an independent court of justice to defend those rights. If they have a bilateral deal with Russia, they are on their own. There will be no question about who calls the shots. So they will have to ask themselves: do they really want Mr Putin as their creditor? I am just trying to picture a scene of what would happen if the Greek finance minister were to give one of his instructional PowerPoint lectures to his Russian colleagues. When he does this in Brussels, people try very hard to stay polite.

http://www.ft.com/intl/cms/s/0/98ca9c8c-da2b-11e4-ab32-00144feab7de.html?ftcamp=crm%2Femail%2F_2015___04___20150405__%2Femailalerts%2FKeyword_alert%2Fproduct

3) At the following article of Natural Gas Europe, titled “New Greek Government Changes Course on Natural Gas Sector”, February 2015, you can read that the newly elected Greek government of SYRIZA and Independent Greeks wants to reexamine the clauses of the Trans-Adriatic Pipeline, supposedly for striking a better deal for Greece. According to the article the new Greek government is willing to even take the TAP agreement to the European Court of Justice. Taking the TAP agreement to the European Court of Justice would essentially block it for the coming years.

The article also mentions SYRIZA’s opposition towards the economic sanctions that were imposed on Russia by the European Union, and Greece’s dependency on Russia for oil and natural gas. Sixty five percent of the Greek oil imports, and 75% of the Greek natural gas imports come from Russia according to the article. In the 11th paragraph the article mentions the issues of the floating LNG terminal of the North Aegean Sea, and the Interconnector Greece Buglaria pipelines, and it says that they are on the table of negotiations too, because these two projects would diversify Greek and Bulgarian natural gas imports away from Russian and Azeri natural gas.

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TAP project may also be facing head winds. Local media reports indicate the Syriza government will request in the short term, an amendment of the clauses that have been signed by the previous administration. Most importantly, those include the payment of transit fees by TAP consortium. Should these fees be denied, Syriza will then examine the option of taking the subject to the European Court of Justice, since according to the standing EU and Greek law, transit fees are to be requested by the national member states. In such case, several former governmental figures, maybe found liable of damaging the economic interests of the state that is a punishable penal offence, as a Syriza official emphatically commented for Natural Gas Europe.

 Syriza also appears to be pursuing closer relations with Russia. Lafazanis conveyed he personal opposition to the embargo on Russia. It should be noted that already Greece is heavily dependent on Russian energy supplies, receiving 65% of its oil imports and 75% of its gas from Russian companies, most notably Gazprom and Lukoil. The reason for that is that the country has lost its traditional suppliers such as Libya and Iran on oil business, and the gas streaming from Russian pipelines is under long-term contracts and relatively, depending on seasonal adjustments, cheaper that LNG supplies.

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Another topic of importance in the natural gas sector is that of the LNG infrastructure.  There appears to be no change in the Greek position, with the upgrade of the Revythousa LNG terminal proceeding as well as the intention of establishing a new terminal in Northern Greece that will aim to diversify both Greek and Bulgaria supplies and away from Russian and Azeri imports.

http://www.naturalgaseurope.com/greek-government-natural-gas-policy

4) At the following article of the Russian state-owned news agency Itar-Tass, titled “Greece PM says sanctions against Russia a road to nowhere”, March 2015, you can read that the newly elected Prime Minister of Greece, Alexis Tsipras, accused the previous Greek governments, because in his opinion they did not do the best they could to prevent the European sanctions against Russia.

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“You know that over the past years a blow was dealt to these relations as the previous governments in my country had not done what they could have done to avoid this senseless sanctions policy, in my opinion, amid tensions in Ukraine,” he said.

http://tass.ru/en/world/786024

5) At the following Guardian article, titled “Alexis Tsipras looks to Moscow but risks becoming Putin’s useful idiot”, April 2015, you can read that Putin has more to gain from the visit of the Greek Prime Minister to Russia, because Putin can demonstrate another division within the EU. According to the Guardian, Putin is financing the French far-right party of Marine Le Pen, the “National Front”, and the Greek Prime Minister will be seen as joining the Hungarian Prime Minister Victor Orban, and the Serbian government, who are ready to applaud Putin.

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So Putin has more to gain from Tsipras’s visit than the Greek leader does. It will be another demonstration of European divisions, and a good chance to showcase pro-Kremlin networks within the EU. Russia’s financing of France’s far-right National Front was a comparable PR stunt for Putin last year. Tsipras will be seen as joining the ranks of those, like the Hungarian prime minister Victor Orbán or the Serbian government, who are readily available to applaud Putin. Tsipras has already shown himself to be a “useful” partner to Putin by saying European sanctions against Russia are “a road to nowhere”. In fact, they are a serious concern for the Kremlin and currently represent Europe’s only leverage of soft power.

http://www.theguardian.com/commentisfree/2015/apr/02/tsipras-moscow-risks-putin-useful-idiot?CMP=share_btn_fb

6) At the following Natural Gas Europe article, titled “SYRIZA Sees Greek Hub For Russian Gas a Great Opportunity”, January 2015, you can read that according to Athanasios Petrakos, who is one of SYRIZA’s specialists on energy issues, the Turk Stream is a great opportunity for Greece.

 “The 50 billion cubic meters of gas per year, that will be accumulated in Turkey’s border with Greece are a great opportunity for Greece to upgrade its geopolitical role”, said Athanasios Petrakos, who is also in charge of Eurosceptic party’s energy policy.

Greece will go to the polls in a national election on January 25th following the country’s parliament failed to elect a president in the third and final round of voting on December 29, 2014.

Several recent polls indicate that Syriza holds a lead of over 3 percentage points over Prime Minister Antonis Samaras’s New Democracy party. 

http://www.naturalgaseurope.com/syriza-sees-greek-hub-for-russian-gas?utm_source=Natural+Gas+Europe+Newsletter&utm_campaign=ecfc73bb72-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_c95c702d4c-ecfc73bb72-307785513

7) At the following Guardian article, titled “Athens plays Russian card, eyes Turkish Stream”, April 2015, you can read that the newly elected Greek Prime Minister, Alexis Tsipras, wishes to upgrade the Greek-Russian relations by opposing European sanctions against Russia. As you can read in the 9th paragraph, the new Energy Minister of Greece, Panagiotis Lafazanis, said that the EU is not the uncontrolled boss of the European national governments.

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Preparing the ground for a much-discussed visit in Moscow (8-9 April), Greek Prime Minister Alexis Tsipras reiterated his opposition to EU sanctions against Moscow, adding that debt-ridden country’s ambition is to upgrade its relations with Russia.

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In an interview with the state-owned Russian news agency Tass, Tsipras said that Greek-Russian relations received a blow last year, “as the previous Greek governments didn’t do their best to avoid the sanctions [against Moscow] due to Ukraine crisis”.

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Lafazanis also announced the expansion of Russia-driven Turkish Stream pipeline to Greece, saying that the final decision on the issue will be taken by the Greek Prime Minister, based on the national interests of Athens and not the European Commission, which according to him, “is not an uncontrolled boss of EU national governments”.

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Greece imports 65% of its annual gas needs from Russia. Despite a deal for a gas price reduction by 15% last year between natural gas importer and distributor (DEPA) and Gazprom, Greeks keep on paying the highest bill in Europe, due to the state monopoly that has dominated the Greek energy market.

http://www.euractiv.com/sections/global-europe/athens-plays-russian-card-eyes-turkish-stream-313533

8) At the following Euroactiv article, titled “Greece, Macedonia, Serbia and Hungary discuss Turkish Stream”, April 2015, you can read that the foreign ministers of Greece, the Former Yugoslav Republic of Macedonia, Serbia and Hungary, would meet in Hungary to discuss a Russian plan for the new Turkish Stream pipeline. Actually the pipeline that these countries are considering is the Balkan Pipeline, which will connect the Turk Stream to Hungary through Greece, Former Yugoslav Republic of Macedonia and Serbia.

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The foreign ministers of Greece, Macedonia, Serbia and Hungary are due today (7 April) to meet in Budapest to explore their potential participation in Russian plans for the new Turkish Stream pipeline.

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Russia has said that it’s up to the EU to decide how to move the gas from there. Over a recent visit of Russian President Vladimir Putin to Hungary, his host, the Prime Minister Viktor Orbán, has drawn a map for he planned pipeline through the territories of Greece, Macedonia, Serbia and Hungary.

http://www.euractiv.com/sections/energy/greece-macedonia-serbia-and-hungary-discuss-turkish-stream-313567

9) A very good article about the newly elected Greek government and the Southern Energy Corridor is Natural Gas Europe’s “The New Greek Government: Implications for Azerbaijan’s DESFA Purchase”, March 2015. You can read that SYRIZA’s victory was welcomed by Russia, even though SYRIZA is not radically pro-Russian, but because it opposes many European Union policies. In this sense, according to the article, SYRIZA is similar to other European parties like Jobbik (Hungary), the National Front (France) and the National Democratic Party (Germany).

According to the article the newly elected Greek government destabilized the energy market, because the new Greek Energy Minister, Panagiotis Lafazanis, immediately announced that the Greek Public Power Corporation (DEH) and the Public Gas Corporation (DEPA) would not be privatized as it was agreed by the previous government. The decision on DEPA affects the sale of its subsidiary, DESFA, a Greek public natural gas company, which was supposed to be sold to SOCAR, Azerbaijan’s state owned energy company.

SOCAR would buy 66% of DESFA, and the only thing missing for the deal to be finalized was a decision by the European Commission, because SOCAR is also a producer of natural gas, and the European anti-monopolistic rules do not allow producers of natural gas to also own the pipeline networks distributing this gas in the European Union. However the EU can make exceptions to pipeline networks that do not comply to the EU regulations, if they are improving the overall energy security of the EU, or if they increase competition in the EU.

An exception was granted for Gazprom’s Nord Stream pipeline, which connected Russia and Germany through the Baltic Sea. It was believed that the Nord Stream was increasing the energy security of the EU, because it was bypassing Ukraine. European countries cannot count on Ukraine for their gas imports, due to the famous Russian-Ukrainian conflicts over gas prices. Therefore I guess that an exception could be also granted to SOCAR, since SOCAR’s network will increase competition for other natural gas providers. Maybe for an exception to be granted, SOCAR will also have to sell some of the shares of its projects.

You can also read in the article that Russia could buy DEPA, and therefore control its subsidiary, DESFA, since Russia could offer the highest bid, but the previous Greek government, together with the EU and the US, did not allow Russia to acquire the company, because this would mean a Russian dominance in natural gas market of the South Eastern Mediterranean Sea. You can read at the 11th paragraph of the article that the newly elected Greek government is bad news for the Southern Energy Corridor.

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The victory of the leftist Syriza party in the recent Greek elections was largely welcomed by Moscow, not because the party’s policies are radically pro-Russian, but rather because its leadership has stated its resistance to a number of Brussels-led policies. In this sense there is a similarity to certain other European political parties in the EU member states, such as Jobbik (Hungary), National Front (France), and the National Democratic Party (Germany). The statements by the new Greek government have also destabilized the regional energy matrix. On February 10 2015, the new Energy Minister, Panagiotis Lafazanis, announced that the public companies – Greece’s Public Power Corporation (DEH) and Public Gas Corporation (DEPA) – will no longer be privatized. Meanwhile, Syriza’s 40-point party manifesto highlighted the “nationalization of ex-public companies” and committed to “increase inspections of requirements for companies making bids for public contracts”. Now, the key question is how far the decision on DEPA will impact Greek gas transmission operator DESFA; Azerbaijani SOCAR has signed a deal to purchase 66% of DESFA’s shares. In this regard, Lafazanis has stated that Greece is awaiting the final results of the EU’s investigation on the purchase of DESFA, though the previous government had given its full support for the sale of shares to SOCAR.

 In 2013, SOCAR bid in the tender to purchase the Greece’s DESFA, a subsidiary of DEPA. Russian Gazprom also participated in the tender for DEPA, and proposed the highest bid but ultimately the privatization failed because of a lack of formal bids. Being a main shareholder in DEPA would also enable Russia to control DESFA. This posed a serious concern in terms of Russian dominance in Southeast Europe. In light of these geopolitical risks, in early 2013, Washington and Brussels urged Athens not to let DEPA fall into Russian hands. As a result, Gazprom voluntarily withdrew its bid, justifying its action on the grounds of DEPA’s financial position. Although Azerbaijan’s offer was smaller, SOCAR was in a position to win the tender. At that time, the Shah Deniz consortium was in the midst of final decision process for the selection of either TAP or Nabucco-West as the pipeline of choice. Azerbaijan’s SOCAR was able to use selection of TAP as a “negotiation card” in its discussions with Greece in order to persuade the (now former) Greek government to award them the tender.

 After SOCAR signed a deal to purchase 66% of DESFA, the next step should have been approval from the Regulatory Authority for Energy of Greece (RAE). However, the European Commission intervened, and asked the RAE to block SOCAR’s purchase, claiming a breach of EU regulations. The EU’s Directorate General for Competition officially launched an investigation into the sale of DESFA shares to SOCAR, in order to clarify whether the acquisition of DESFA is compatible with EU merger regulations. According to the EC, SOCAR’s involvement in both production and sale of natural gas in Greece may hamper the competition in the upstream market in a discriminatory manner. Specifically, it may: prevent third companies from accessing the Greek gas transmission system; increase domestic gas prices; restrict additional gas flow into Greece while favoring SO- CAR’s own supply; restrict investment in expansion of import capacity, as well as limit the capacity of Revythousa LNG terminal and interconnections between DESFA’s network and TAP pipeline. The investigation is supposed to last for up to 90 working days.

 The purchase of DESFA is very important for SOCAR. Along with TAP, it will boost Azerbaijan’s influence in Southeast Europe’s energy markets, providing direct access to consumers via Intercon- nector Greece-Bulgaria, in which SOCAR will be a stakeholder with DESFA’s 50%. DESFA also owns the Revithoussa LNG terminal, which is under consideration for the future import of Mediterranean gas, which will enable SOCAR to deliver East Mediterranean gas to Europe via DESFA’s pipelines.

 Furthermore, Greek Energy Minister Panayiotis Lafazanis stated that, “Greece will support the TAP, but in a way that will maximize Greece’s benefits from the project”. “Greece’s benefits” are clarified in Ekathimerini.com, which wrote Greece seeks to obtain a stake in TAP, revise the transit fees and price discounts for Azerbaijani gas, and sell only 49% of DESFA rather than the previously agreed 66%.

 These issues were likely on Lafazanis’s agenda during his visit to Baku to attend the meeting of Southern Gas Corridor’s Advisory Council on February 12 2015, where he asked for compensatory measures emerging from the construction of TAP. It is clear that Lafazanis came to Baku brandish- ing the “DESFA card”, aiming to set forth the new government’s demands. Meanwhile, the Vice-Pres- ident of SOCAR, Elshad Nasirov, has already clarified Azerbaijan’s position on Greece’s demands: “SOCAR is ready to sell part of its share in TAP to Greece, but at the present time it is impossible to reduce the price of Azerbaijani gas for Greece. Tariffs increases should be addressed at the EU level.”

 Azerbaijan is willing to make concessions on Greece’s potential share in TAP, but not in relation to gas prices and tariffs.

 11th , 12th Paragraphs

To sum up, the statements of the Syriza government in Greece has raised questions about the fate of the Southern Gas Corridor. Meanwhile, the so-called Turkish Stream has emerged as potential challenger to Azerbaijani gas exports to Southeast Europe. By transporting Russian gas via ITGI and Azerbaijani gas via TAP, Greece wants to pursue a balanced energy policy, playing to both Russia and Azerbaijan. Nevertheless, the realization of ITGI remains doubtful given its previous failure due to financial problems.

 On the other hand, the new demands by the Greek government regarding TAP in addition to the ongoing acquisition process of DESFA represent further challenges to Azerbaijan’s energy policy. Greece’s requests to increase tariffs and decrease gas prices are linked to its huge debts and the national economic crisis. Those demands stand to jeopardize the Southern Gas Corridor. Being a major shareholder in DESFA will position Azerbaijan as a major actor in the Southern Gas Corridor gas chain.

http://www.naturalgaseurope.com/syriza-implications-for-azerbaijans-desfa-purchase-22491

10) At the following National Interest article, titled “Could Greece and Russia Crush the European Union?”, February 2015, you can read that the new coalition government, that emerged in Greece from the January 2015 elections, is a combination of communists, socialists, Greens, and anarchists. The article should also say that the new government includes national socialists, because the Greek party of Independent Greeks which participates in the government is a nationalist party. According to the article, the new Prime Minster of Greece, Alexis Tsipras, wants to rewrite European geopolitics. However I must say, as a Greek, that the truth is that all Alexis Tsipras wants is that the Greek political system does not lose its grip over the Greek economy, the Greek judicial system, and the Greek tax authorities. He could not care less about geopolitics. All he cares about is the Greek economy, but he is using geopolitics to achieve his goals.

2nd Paragraph

Greece’s new government is an alliance composed of the hard-left Syriza party (149 seats) and the strongly nationalist and populist Independent Greek party (thirteen seats). Syriza itself is a broad coalition of former communists, socialists, Greens and anarchists. It favors a large role of the state in the economy, increased social spending and keeping the euro. Greece’s two bailouts (2010 and 2012), worth €240 billion in loans, are a particular sore point, as they have left Greece with an ultimately unpayable debt burden.

 8th, 9th , 10th Paragraphs

Europe’s economic-growth crisis coincides with Germany’s rise as the clearly dominant power in continental Europe. For his part, Tsipras wants to rewrite European geopolitics, tapping into a growing anti-austerity mood in other European countries, and undercut Berlin’s influence. Indeed, during his election campaign, the Greek leader accused German chancellor Angela Merkel of conducting a “social Holocaust.”

While it can be argued that Tsipras has the right message that Greece’s debt is too high, he is probably not the best messenger. He is a polarizer and enjoys confrontation. Staunchly left wing, he spoke out against Western sanctions on Russia shortly after Moscow’s annexation of Crimea, repeatedly called on Germany to pay billions of euros in war reparations, and in general, has little love for capitalism.

 In its first weeks, the Syriza-led government aggressively signaled Greece’s new policy direction. One of Tsipras’ first acts as prime minister was to visit a site where the Nazis executed Greek partisans, followed by a very cordial meeting with the Russian ambassador. He and his finance minister, Yanis Varoufakis, quickly declared that they would no longer work with the Troika, demanded debt reduction, took measures to roll back austerity and froze the privatization program.

 17th, 18th, 19th Paragraphs

Greece’s geopolitics of debt also sought to encompass the United States and China. Although suggested as a possible part of a “Plan B” of alternative funding by Greek defense minister Panos Kammenos, Washington’s national interests are not substantial in Greece. Indeed, Athens’ pro-Russian stance, something pursued by past Greek governments during the Cold War, complicates U.S. diplomacy with regard to Ukraine and Russia. In terms of realpolitik, the role of bailing out Greece would most likely offer little gain, but runs the risk of injecting new friction into U.S.-German relations.

And then there is China. Greece’s deputy foreign minister Nikos Chountis mentioned proposals for economic support and investment possibilities from China. Although China indicated surprise at this, the Asian country’s Cosco Group was short-listed last year (by the previous government) as a potential buyer of a 67-percent stake in Piraeus Port Authority, a privatization potentially worth €800 million. The privatization was initially canceled by the Syriza government, but that decision was soon reversed in the face of dwindling cash and growing prospects for default.

While China may share a broad ideological affinity with Syriza and finds a majority ownership of a key Southern European port attractive, a risk is that Greece ends up like Venezuela, long on socialist rhetoric and grossly mismanaged economically. China has an estimated $4 trillion in foreign exchange reserves, but there are limits to its generosity. For the Chinese, Greece runs the risk of becoming Europe’s Venezuela, but without the benefits of oil.

http://nationalinterest.org/feature/could-greece-russia-crush-the-european-union-12278

11) At the following Business Insider article, titled “Russia’s Grip On Greece’s Gas Has Created A Mess For The New Government In Athens”, January 2015, you can read about Gazprom’s attempt to buy DEPA, the Greek gas company. In 2013 Gazprom, the Russian state controlled giant, offered 900 million euros in order to buy DEPA, which was the highest bid. However on June 10th it was announced that Gazprom decided not to place a formal bid. According to rumors Gazprom backed out because of European and American pressures. The article also mentions that this was a blow to the previous Greek government, which counted on these 900 million euros. According to the article, even though Samaras government extended the deadline for the final bids, he did not manage to convince the Russians to place a formal bid.

1st, 2nd, 3rd, 4th Paragraphs

Back in 2013, the Greek government under then-prime minister Antonis Samaras was attempting to implement a package of reforms that included the sale of state-owned assets to the private sector, including Greek gas firm Depa, one of the perceived “jewels in the crown.” Depa was purportedly being targeted by Russian gas giant Gazprom for a takeover bid.

 In May of that year, the Russian company offered €900 million for the company, well in excess of the only rival bid in the deal.

 All of the signs on the ground were looking good. Gazprom chief executive Alexey Miller had flown to Athens in an effort, many believed, to oversee the deal personally and people close to the deal within the Greek establishment were briefing the press that an announcement was imminent.

They were right. It just wasn’t the announcement they had been expecting.

 On June 10, it emerged that Gazprom had decided not to formally put in a bid for Depa. Rumours suggested that it had backed out under pressure from the United States and the European Union over concerns about deeper Russian involvement in Europe’s energy market.

Whatever the reason, it was a hammer blow to Samaras’ ambition to raise as much as €2.6 billion through privatisations and set back the country’s already shaky reform programme still further. His government had extended the deadline for bids and eased the terms of the deal in an effort to woo the Russians, but even that had proven insufficient to draw a bid.

http://www.businessinsider.com/gazprom-gas-deal-with-greek-company-depa-complicating-russia-sanctions-negotiations-2015-1

12) At the following Natural Gas Europe article, titled “Greece Seemingly Closer to Turkish Stream”, April 2015, you can read that Greece’s new Energy Minister, Panagiotis Lafazis, visited Russia to explain how keen Greece is in joining the Turk Stream project, together with Russia and Turkey. Lafazanis and Gazprom discussed about extending the Turk Stream to Northern Greece, and from there extending the pipeline vertically, in order to reach Austria (Greece-Former Yugoslav Republic of Macedonia-Serbia-Hungary-Austria). See the following map for the Balkan Pipeline.

Picture 79

Balkan Stream

This was basically the plan for the South Stream, as you can read in the article, with Bulgaria out, Turkey in, and an enhanced role for Greece and the Former Yugoslav Republic of Macedonia. According to the article, the Greek Ministry of Energy estimates the benefits for the Greek economy to be 3 billion dollars in direct investment. As you can read in the 8th paragraph of the article, the Turk Stream will be a source of conflict for the American-Russian relations, and this will definitely affect the Greek-American relations.

1st, 2nd Paragraphs

Greek Prime Minister Alexis Tsipras is due to visit Moscow on the 8th of April to discuss a whole range of bilateral issues with the Russian leadership, energy being one of the most important items on the agenda.

In particular the proposed Russian energy corridor “Turkish Stream” seems to be high on the upcoming discussions, since recently the Greek energy minister Panayotis Lafazanis visited Russia as well and placed forward the intention of Athens of joining Russia and Turkey in that route towards the EU markets.

 5th, 6th, 7th , 8th Paragraphs

Present talks between Lafazanis and Gazprom essentially deal about an extension of Turkish Stream which will stretch from the Greek-Turkish border up to Northern Greece, then will traverse vertically FYROM and Serbia, before reaching Hungary from where a spur to the Austrian Baumgarten mega-hub will be added, along with increased storage facilities in Hungary which will pump gas to different directions via interconnections with Slovakia, Croatia and Slovenia. That is actually the route of the scrapped South Stream, with the notable exception that Bulgaria is out and Turkey is in with an enhanced role for Greece and FYROM.

 Greek energy ministry sources revealed to Natural Gas Europe, that should this plan goes forward, Greece stands to gain 3 billion Euros in direct investment, which include the construction of the pipeline, an underground storage facility in the Kavala and/or Thessaloniki region, and a entire gas transmission system in Northern Greece both for the industrial-commercial consumers, as well as household ones.

 Greece is also pushing forward the idea of establishing an LNG terminal in Northern Greece that will serve a dual purpose. Firstly, to export Russian gas to the international markets and also to import LNG for the supply of Bulgaria via the Interconnector Greece-Bulgaria (IGB).

 On a geopolitical level, it is certain that US-Russia brinkmanship will extend to Turkish Stream and likewise it will affect the relationship between Athens and Washington. On an EU level, there are divergent opinions based on national and supranational levels, since Europe does need Russian gas at least for the short and mid-term, thus the cancellation of the South Stream would and should have been replaced by another project so as to ensure energy security of the Continent in case of a major disruption in Ukraine. In simple terms Ukraine has been written off by the Russian side as a transit territory, a fact that raised awareness to the EU core consumers to accommodate an alternative route.

http://www.naturalgaseurope.com/greece-moves-towards-turkish-stream-23013?utm_source=Natural+Gas+Europe+Newsletter&utm_campaign=0554b17d70-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_c95c702d4c-0554b17d70-307785513

13) At the following article of the Azerbaijani New Times, titled “Gas Policy of Greece under New Government: Russia, Turkic Stream and Diversification”, April 2015, you can read that the newly elected Greek government is favored by Moscow, because it does not conform to the EU policies, and it also opposes the European Energy Union proposed by the EU.

The new Greek government also favors the Turk Stream project, and also eyes an agreement with the Russian company Rosgeo, for the exploration of the oil resources of the Greek islands of the Aegean and the Ionian Seas (see purple circles at the following map). Moreover the Greek government would like to see Russia’s involvement in the floating LNG regasification unit in the Port of Alexandroupolis at the Northern Aegean Sea (see the red circle at the following map).

Picture 80

SYRIZA Russia Ionian and Aegean

However, in the 2nd paragraph, you can read that Russia was disappointed because the new Energy Minister, Panagiotis Lafazanis, said that Greece does not intend to privatize the public natural gas company DEPA. In the 3rd paragraph you can read that Russia is hoping to increase her presence in the Greek energy market, and the article also mentions the agreement between Greece and Russia in 2007, about the oil pipeline Burgas (Bulgaria) – Alexandroupolis (Greece), which was supposed to shadow the Baku (Azerbijan) – Ceyhan (Turkey) pipeline, which was an oil pipeline backed by the US (see red and brown lines at the following map).

As I already said the Burgas (Bulgaria) – Alexandroupolis (Greece) oil pipeline was finally blocked by Bulgaria. The Baku-Ceyhan oil pipeline is already operating.

Picture 81

Burgas Alexandroupoli and Baku Ceyhan

In the 6th paragraph you can read that the new Greek government wants to renegotiate the terms of the sale of DESFA to the Azerbaijani energy company SOCAR. In the 8th paragraph you can read that the Interconnector Greece Bulgaria pipeline is of vital importance for the South Eastern European countries, because it can send them Russian, Caspian and Eastern Mediterranean natural gas. In the 9th paragraph you can read that DEPA considers the construction of a floating LNG terminal at the Port of Kavala in the North Aegean.

1st , 2nd , 3rd Paragraphs

Meanwhile, election of the radical leftist – Syriza party in Greece is mostly favored by Russia, like other political parties in the EU member states, such as Jobbik (Hungary), National Front (France), National Democratic Party (Germany), etc., not because they are radically pro-Russian, but rather they do not easily conform to Brussels-led policies. New government in Greece appeared challenging the official Brussels by opposing the extension of sanctions against Russia, amidst the Ukraine crisis and the EU’s endeavors of diversifying energy supply and creation of the Energy Union. Meanwhile, official Athens’s favored extension of Turkic Stream through Greece to Europe. New Greek government also eyes an agreement with Russian Rosgeo for exploration of hydrocarbon resources in Aegean and Ionian Seas, to negotiate new prices discounts, Russia’s involvement in Floating Storage & Regasification Unit in the Alexandroupolis port.

 However, the statements of New Energy Minister of Greece, Panagiotis Lafazanis couldn’t not disappoint Russia, as he announced the ending of privatization of Public Gas Corporation (DEPA). Tender for the 65% privatization of DEPA had been already hold in 2013, where, Russian Gazprom and Sintez had proposed the highest bid for DEPA, though privatization failed because of lack of formal bids. Hence, Gazprom and Sintez voluntarily withdrew their bids by making excuse on DEPA’s financial position. However, it was not secret that, official Washington and Brussels had already urged Athens in early 2013 not to sell DEPA to Russian Gazprom. Gazprom’s presence in DEPA as a main shareholder was a serious concern in terms of Russian dominance in the Southeast European energy markets.

 Moreover, Russia is very interested in participating in liberalization of Greek energy market by investing there and purchasing certain energy assets. Active presence of Gazprom in the energy sector of Greece with development of gas distribution networks and construction of gas storage facilities is one of the main dimensions of Greek-Russian energy relations for Russia. In this regard, the construction of the Trans-Balkan Burgas-Alexandroupolis oil pipelinein 2007, which envisaged delivery of Russian oil through the Black Sea and Bulgaria to Greece intended to shadow the Baku-Tbilisi-Ceyhan oil pipeline that is bringing Azerbaijani oil through Georgia to Ceyhan port of Turkey to Western markets. Moreover, Russian president Vladimir Putin had proposed Greece to join South Stream gas pipeline in June 2007, because Russia was planning to pave auxiliary route of South Stream towards Greece in case northwestern route to Bulgaria would not come to realization. So, it happened, as Putin halted South Stream and launched Turkic Stream in early December 2014.

 6th Paragraph

Trans-Adriatic Pipeline (TAP) – In 2013, became last chain of the Southern Gas Corridor and new alternative supply route for Greece. TAP pipeline is planned to be linked with Trans-Anatolian Pipeline and to start in the Turkish-Greek border, go through Albania and under Adriatic Sea, and end up in the Southern coasts of Italy (San Foca). However, new demands of the new government in Greece regarding the TAP project to increase tariffs, decrease gas prices, sell only 49% of DESFA to SOCAR and obtain share in TAP blurred the image of Southern Gas Corridor and was not warmly accepted by Azerbaijani SOCAR. Although tale of DESFA is still under questions and SOCAR agreed to grant a stake to Greece in TAP, Azerbaijan did not make concession on price and tariffs issues.

 8th Paragraph

Interconnector-Greece-Bulgaria (IGB) – that will be laid down from Greece’s Komotini to Bulgaria’s Stara Zagora, is considered vital link for Southeast European countries in terms of bringing Eastern Mediterranean, Caspian or possibly Russia natural gas to that region. The IGB will be able to facilitate the delivery of Azerbaijani gas from TAP and Mediterranean gas from LNG facility in the Northern Greece towards Southeast and Central Europe. It is also possible to transport Russian gas from Turkey-Greece Interconnector or from TAP towards Southeast and Central Europe via the IGB to Bulgaria or via new pipeline through FYROM and Serbia to Hungary and Austria after gas entered Greece through Turkic Stream.

 9th Paragraph

Liquefied Natural Gas (LNG) – Meanwhile, “Greece’s DEPA considers developing Floating Storage and Regasification Units, upgrading Revithoussa LNG terminal and construction of Aegean LNG terminal in the Kavala region close to Bulgarian and Turkish borders, where it will be possible to link terminal with Trans-Adriatic Pipeline, Greek gas transmission system, and Interconnector-Greece-Bulgaria. The Revithoussa terminal is important in terms of diversification. Moreover, Greece also considers bringing Algerian LNG into IGB (5 bcm/year) by 2020. Another Greek company Prometheus Gas plans to construct similar terminal near to the Alexandropoulos port. From the other hand, Greece could use Turkey’s two terminals in the Marmara Sea by importing Algerian, Nigerian and Qatari LNG and further delivering it via IGB to Greece.”.

http://newtimes.az/en/politics/3406/

Comparing 2015 with the First World War

In this chapter I would like to provide again a very brief summary of the First World War (1914-1918), in order to compare it with the current events. At the beginning of the 20th Century, the German Empire wished to connect itself to the Persian Gulf through the Baghdad Railway (German Empire- Austro-Hungarian Empire-Ottoman Empire). See the following two maps.

Picture 82

Map of Europe 1900

The Middle East in 1914, before WW1

Picture 83

2 Ottoman Middle East

With this railway network the Germans would import oil from the Persian Gulf and would export manufactured goods in Anatolia, the Persian Gulf and Asia. The German plans were a threat for the English, who wanted to control the oil of the Persian Gulf. The German presence in the Persian Gulf would also threaten the British presence in India, which at the time was Britain’s most important colony.

The Germans were also a problem for the Russians, who wanted to control the Caspian Sea region and the oil of Baku. The Russians also eyed the Ottoman Straits that connected the Black Sea to the Aegean and the Mediterranean Sea, in order for the Russian Navy to have access to the Mediterranean Sea. France was almost constantly at war with Germany, since there were rich coal reserves between the two countries, for example in the regions of Alsace and Lorraine. Coal was the oil of the 19th Century, and to this very day many countries cover a very large part of their energy needs with coal.

With the Balkan Wars of 1912-1913, the English, the French and the Russians helped Greece, Serbia and Bulgaria to annex the European territories of the Ottoman Empire, in order to form a wall between the German Empire and the Ottoman Empire. Greece, Serbia and Romania formed a wall between Germany and Turkey, as you can see at the following map.

The Balkans after the Balkan Wars of 1912-1913

Picture 84

7 New Borders Balkans

In 1914, the Austrian Duke Ferdinand was murdered in Sarajevo by the Serbs. Sarajevo is Bosnia’s capital. At the time Bosnia belonged to the Austro-Hungarian Empire. Austro-Hungary declared war on Serbia, and the other powers rushed to support one of the two sides. That was the start of the First World War. It is claimed, correctly in my opinion, that the Second World War was a simple continuation of the First World War, since the geopolitical landscape was more or less the same with that of the First World War.

On the contrary, today’s geopolitical framework is very different that the one of 1914. Today the Greek-Serbia axis that was created by the English, the French and the Russians with the Balkan Wars, it is a problem for the West, while it can still be very useful for Russia. NATO wants to connect the Caspian Sea reserves to Italy and Germany, because Putin gave the Germans and the Italians large stakes in the Russian natural gas industry. Italy got its stake through the South Stream and the Blue Stream Pipelines, while Germany got its stake through the North Stream Pipeline. NATO is to a large extent an energy alliance, and if Italy and Germany were to align themselves with Russia in energy issues, it would be the end of NATO, at least as we know it.

Bosnia-Herzegovina and the Former Yugoslav Republic of Macedonia (FYROM) are two countries which today are politically very unstable, and they have large Muslim and Slav elements in their populations. Turkey can influence the Muslim elements, and Russia can influence the Slavic ones. If Putin uses the corrupt political systems of Greece, FYROM, Serbia and Hungary in order to block the Southern Energy corridor, NATO will have no choice but to support Turkey and Albania. The two countries will use the Muslim elements of Greece and FYROM in order to annex some of the territories of these two countries, creating a corridor which will connect Turkey and Albania.

Picture 85

FYROM

If on the other hand Greece allows the Southern Energy corridor to pass through its territory, Russia will have to use the Slavs in Bosnia and FYROM in order to cause a war. The war would destabilize the Balkans, blocking the Southern Energy Corridor, and preventing the natural gas of the Caspian Sea from reaching Italy and Germany. The only other scenario, the best one actually, is that the US, the EU and Russia will agree on a pipeline that will carry both Russian and Caspian natural gas.

However it is clear that contrary to the geopolitical framework of WW2, today’s geopolitical framework is very different from the geopolitical framework of WW1. The only similarity is that everything seems set for a new Sarajevo. But let’s hope that the great powers will work things out.

A Final Note

My essays are always somewhat aggressive towards Turkey. However I believe I am fair on my critique towards Turkey. It is not a secret that Turkey is very aggressive when it comes to her energy policy. But that’s not the point. The point is that I have to make a confession. I am half Jewish, and my father was born from Jewish parents in Rhodes, Greece. His father’s family were Spanish Jews, who ended up in Rhodes when they were thrown out of Spain by the Spanish Christians in 1492 during the Inquisition. At the time Rhodes was a part of the Ottoman Empire, and remained a part of the Ottoman Empire until 1912, when the island was taken over by the Italians during the Italian-Turkish War. The Turkish people had a lot of respect for the Jewish religion, and they gave shelter to the Spanish Jews.

My father’s mother was from Ukraine, which at the time was a part of the Russian Empire. The anti-Semitic policies of the Russian Char forced many Jews, among them my grand mother’s family too, to flee the Russian Empire. Her family ended up in Lebanon, and she was born in Beirut in 1905. At that time Lebanon, like Rhodes, was a part of the Ottoman Empire. My grand mother’s family, like my grand father’s family, found shelter at the Ottoman Empire. Therefore my grand mother had Turkish papers, and she was a Turkish citizen.

When the Nazis gathered the Jews of Rhodes at Platanakia Square in 1944, in order to send them to Auschwitz, the Turkish consul of Rhodes, Selahattin Ülkümen, managed to save the Jews who had Turkish papers. For Selahattin Ülkümen see the end of the chapter. My grand mother was among the lucky ones, since she did have Turkish papers. My grandfather had Italian papers. Thanks to the Turkish consul and my grand mother, both my grand father and my father were allowed to leave the building where the Germans had gathered the Jews of Rhodes in 1944. Afterwards they managed to escape to Symi, another island of the Dodekanese, which was under British control. At Symi they stayed with the Petridis family and they survived the war. However the man who really saved them from the Nazis was the Turkish consul of Rhodes, Selahattin Ülkümen.

Therefore even though I very often criticize the Turks, as I have every right to do, I have to admit that I owe them my life, because they saved my family many times during the last centuries, sometimes from Christian fundamentalists, and some times from socialist fundamentalists. And therefore it is true that I, as a Greek, can criticize Turkey, which is Greece’s main geopolitical rival, but at the same time as a human being I have to express my gratitude to the Turkish people, to whom I owe my life. And even though Turkey and Iran are today Israel’s most dangerous enemies, history cannot be undone. No matter what happens in the future it will be true that Jewish people owe so much to the Turkish people.

Below you can see my father’s map, Spain-Rhodes and Ukraine-Lebanon-Rhodes. It might seem like a strange map, but there is a similar map behind every Jew. The map is larger for most Jews. It usually involves trans-Atlantic lines. And that’s the reason you should be for a Jewish state.

Picture 86

Jews of Rhodes

For the Turkish consul, Selahattin Ülkümen, who risked his life in order to save my grand father, my grand mother and my father, together with another 200 Jews of Rhodes, you can read the following two Wikipedia links.

“Selahattin Ülkümen”

4th and 5th Paragraphs

On 19 July 1944, the Gestapo ordered all of the island’s Jewish population to gather at its headquarters: ostensibly they were to register for “temporary transportation to a small island nearby”, but in reality they were gathered for transport to Auschwitz and its gas chambers. Ülkümen went to the German commanding officer, General Kleeman, to remind him that Turkey was neutral in World War II. He asked for release of the Jews, including not only Turkish citizens but also their spouses and relatives, even though many of the latter were Italian and Greek citizens.[2] At first the commander refused, stating that under Nazi law, all Jews were Jews and had to go to the concentration camps. Ülkümen responded with “under Turkish law all citizens were equal. We didn’t differentiate between citizens who were Jewish, Christian or Muslim.”[3]

Ülkümen told Kleeman that “I would advise my Government if he didn’t release the Jewish Turks it would cause an international incident. Then he agreed.”[4] The Jews protected by Ülkümen were released, though not until they were subjected to considerable additional harassment by the Nazi authorities. Ülkümen continued to provide protection and moral support to those whom he had rescued and other Jews who remained on the island. They feared suffering deportation, as they were required to report to the Gestapo daily and never knew whether or not they would be able to return home.

Soon after Ülkümen’s gaining release of Turkish Jews, the Germans rounded up the Greek Jews on Rhodes, numbering 1,673 in all, and deported them to Greece. From there, the Germans had them transported to extermination camps; only 151 of the group survived the war.[5]

http://en.wikipedia.org/wiki/Selahattin_%C3%9Clk%C3%BCmen

Rhodes, Modern history (3rd, 4th and 5th Paragraphs)

In 1912, Italy seized Rhodes from the Turks during the Italo-Turkish War. The island’s population thus bypassed many of the events associated with the “exchange of the minorities” between Greece and Turkey. After World War I, the island, together with the rest of the Dodecanese, was officially assigned to Italy in the Treaty of Lausanne. It then became the core of their possession of the Isole Italiane dell’Egeo.

Following the Italian Armistice of 8 September 1943, the British attempted to get the Italian garrison on Rhodes to change sides. This was anticipated by theGerman Army, which succeeded in occupying the island. In great measure, the German occupation caused the British failure in the subsequent Dodecanese Campaign.

The Turkish Consul Selahattin Ülkümen succeeded, at considerable risk to himself and his family, in saving 42 Jewish families, about 200 persons in total, who had Turkish citizenship or were members of Turkish citizens’ families.

http://en.wikipedia.org/wiki/Rhodes#Modern_history

May 2015

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USA Russia & China in the Middle East : Alliances & Conflicts

Iakovos Alhadeff

Table of Contents

 Introduction

 The Middle East as a Geopolitical Arena

 Russia in the Middle East

 China in the Middle East

 United States in the Middle East

 China-Russia

 USA-China

 Regional Powers and the Wars in Iraq

 Foreign & Regional Powers in the Middle East

 The Wrong Explanations of the Wars in the Middle East

 A Reader’s Manual

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Introduction

In order to understand the 21st century policies of the great powers in the Middle East, it is imperative to know what these powers really want from this region. Because there might be many factors influencing their behaviour, but obviously they are not equally important. For the general reader to understand the policies of the great powers in the Middle East, the focus must be only on their most important geopolitical objectives, and that’s exactly what this essay is going to do, because sometimes too much detail can blur the big picture. Once the main geopolitical objectives of the great powers are outlined, one only needs to examine how the objectives of one power complement or compete with the objectives of the other powers.

When I say “great powers”, I mean the countries that can quickly mobilize huge military forces, and such countries are mainly the United States, China and Russia. As you can see in the following Wikipedia link, according to all three sources used by Wikipedia, it is these three countries that have the highest military spending in the world.

Military Spending by Country (Wikipedia)

Image 1

Military Spending  by Country Wikipedia

Πηγή: http://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures

Annual military spending amounts approximately to 600 billion dollars in the US, 180 billion dollars in China and 90 billion dollars in Russia. The following article by the Economist, titled “Military Might”, April 2013, confirms these figures. http://www.economist.com/blogs/graphicdetail/2013/04/daily-chart-9

Before I examine the geopolitical objectives of the US, China and Russia in the Middle East, I must say that English is not my first language, so please excuse potential errors.

The Middle East as a Geopolitical Arena

So what is it that the Americans, the Russians and the Chinese really want from the Middle East in the 21st century? Once this question is answered, everything becomes very simple. The US has increased its oil imports from Canada, Mexico, Venezuela, even from Russia, while at the same time it has increased its own oil and natural gas production too, and as a result it has drastically reduced its oil imports from the Middle East. Therefore the US is not dependent on the Middle East for oil in the same way it has been in the past, which was to a large extent what determined the US policies in the Middle East during the 20th century.

In the following Reuters and Financial Times articles, titled “U.S. Seen as Biggest Oil Producer After Overtaking Saudi Arabia”, July 2014, and “US Poised to Become World’s Leading Liquid Petroleum Producer”, September 2014, you can read that in 2014, for the first time, the United States overtook Saudi Arabia and Russia as the largest oil producer in the world. Please note that Saudi Arabia and Russia still have larger oil reserves than the United States. The US simply managed to significantly increase its production.

http://www.bloomberg.com/news/2014-07-04/u-s-seen-as-biggest-oil-producer-after-overtaking-saudi.html

 http://www.ft.com/intl/cms/s/0/98104974-47e4-11e4-be7b-00144feab7de.html

 However even though the US became the world’s largest oil producer, it remains one of the world’s largest importers of oil. On the contrary, Russia is not only one of the world’s largest producers of oil, but she is also one of the world’s largest exporters. The difference is due to the fact that the Russian economy, with a GDP of only 2 trillion dollars, is a much smaller economy than the American one, which has a GDP of 16 trillion dollars. The Chinese economy is somewhere in the middle with a GDP of 8 trillion dollars. In the following Wikipedia table you can see the world’s ten largest economies, as given by the United Nations.

Image 2

Largest Countries by GDP

Source:http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29

In the following pie chart, of the following National Public Radio article, titled “U.S. Rethinks Security As Mideast Oil Imports Drop”, November 2012, you can see that in 2012 the Persian Gulf accounted for only 22% of US oil imports.

Image 3

Where us Imports its oil from

Source: http://www.npr.org/2012/11/14/165052133/u-s-rethinks-security-as-mideast-oil-imports-drop

As you can read in the following Wikipedia link, the National Public Radio is an American non-profit public radio. It is the association of the American public radios, and it was called the Association of Public Radio Stations before it was renamed to NPR.

http://en.wikipedia.org/wiki/NPR

Therefore the Middle East is losing its geopolitical importance as the main oil provider for the US economy, which was the main American interest in the region during the 20th century. However the Middle East remains a region of high strategic and geopolitical importance, since it holds over 50% of the world’s oil and natural gas reserves, and these reserves will be of crucial importance in case of future conflicts.

Many US allies of the Asia Pacific region still count on the Persian Gulf for their oil and natural gas supplies. As you can see in the following pie chart, from the U.S. Energy Information Administration, Japan, a major US ally, imports 79% of its oil from the Middle East i.e. Saudi Arabia, UAE, Qatar, Kuwait and Iran.

Image 4

Where Japan Imports its oil from

Source: http://www.eia.gov/countries/cab.cfm?fips=ja

Moreover, as you can see at the following pie chart, Japan imports 29% of its natural gas from the Middle East i.e. Qatar, Oman and UAE.

Image 5

Where Japan Imports its LNG from

Source: http://www.eia.gov/countries/cab.cfm?fips=ja

The same is true for many other US allies in the Asia Pacific region. On the following map you can see in red circles the countries that have some kind of military doctrine with the US, i.e. Japan, Australia, South Korea, Thailand and Philippines, and in purple circles you can see the countries that have some kind of more relaxed military cooperation with the US i.e. New Zealand, India, Indonesia and Taiwan. All these countries feel the breath of Chinese communists and are eager to cooperate with the United States of America in order to protect themselves.

Image 6

American Alliances in East Asia

The second, but by far the most important reason the Middle East is strategically important for the US, is because the Americans are hopping that they will eventually manage to construct a pipeline network that will connect the Middle East to Europe through Turkey. This is very important for the Americans and the EU, in order to provide a pipeline network that will reduce the Russian influence over Europe.

The Russians have a very important geographical advantage in the European energy market, and as a result they can exert significant political influence on European governments, by the use of carrot and stick. Sometimes by offering lucrative business deals, and sometimes by increasing the price of natural gas. This is causing great internal conflicts in NATO and the European Union, two traditional western alliances.

The way the Russian natural gas divides Europe and NATO is a very big issue, and I will very soon upload a separate document on the subject. For the time being you can have a look in the following Financial Times article, titled “Russia’s South Stream gas pipeline to Europe divides EU”, May 2014.

http://www.ft.com/intl/cms/s/0/a3fb2954-d11d-11e3-9f90-00144feabdc0.html

It is only in the Middle East that there are natural gas and oil reserves of comparable size to the Russian ones, which can provide a long term alternative to Russian natural gas and oil. It is true that Norway, Algeria and Libya do have some descent natural gas and oil reserves, and they are already connected to Europe by pipeline networks, but their reserves are peanuts when compared to the Russian ones (see following map).

Image 7

Libya Algeria Pipelines to Europe

It is only Iran, Qatar, Iraq and Turkmenistan that possess natural gas reserves that could provide alternative to the Russian natural gas, and which could also travel to Europe with pipeline networks through Turkey (see following map). When natural gas travels by ships in liquefied form, i.e. LNG, it involves significant costs, and it is very difficult to compete with natural gas sold through pipeline networks, which is the case for the Russian sales in Europe.

Image 8

Richest in Natural Gas Countries

On page 21 of the following Energy Information Administration link, you can see the countries with the largest natural gas reserves in the world.

Image 9

Richest Countries in the World in Natural Gas Reserves

http://www.eia.gov/countries/analysisbriefs/Iran/iran.pdf

Note that figures are given in trillion cubic feet, and in order to convert them to trillion cubic meters one needs to divide them by 35, i.e. Russia has 1.688/35= 48 trillion cubic meters of natural gas reserves. The following table shows the richest countries in natural gas reserves according to the CIA’s World Factbook (given in trillion cubic meters).

Image 10

Largest Countries in the World in Natural Gas CIA

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2253rank.html

Estimating the natural gas and oil reserves can be a very difficult task, since they are changing every year as they are exploited by the countries hosting them. Therefore there are some differences between various rankings, but all the rankings I have seen so far have Russia, Iran and Qatar as the three richest countries in the world in terms of natural gas reserves.

According to BP, Russia has used a large part of its natural gas reserves and it does not have 48, but 32 trillion cubic meters of natural gas, ranking second behind Iran. You can see the BP estimates in page 20 of the following link (see black triangles).

Image 11

Richest Countries in Natural Gas BP

Source: http://www.bp.com/content/dam/bp/pdf/statistical-review/statistical_review_of_world_energy_2013.pdf

The BP estimates are used in the following Business Insider article, titled “The 17 Countries Sitting on the Most Valuable Energy Reserves”, February 2014. The site is ranking Iran as the richest country in natural gas reserves, with 1.187 trillion cubic feet, and Russia second with 1.163 trillion cubic feet. However Business Insider ranks Russia as the richest country in energy reserves overall, because it takes into account oil, natural gas and coal reserves. Russian natural gas, oil and coal reserves have a commercial value of 40 trillion dollars, while Iran is in the second place with a value of total reserves of 35 trillion dollars.

http://www.businessinsider.com/countries-with-most-energy-reserves-2014-2?op=1

Therefore one must keep in mind that it is very difficult to accurately estimate world natural gas and oil reserves, and the available estimates should be only used as an approximation.

Having made this parenthesis about the world’s natural gas reserves, I will return to the subject. I was saying that connecting Middle East and Europe through Turkey with a pipeline network, is by far the most important American geopolitical objective in the Middle East. Actually this was obvious in the way the Americans did not hesitate to cause severe problems in their relations with Israel and Saudi Arabia, their traditional allies in the region, in order to normalize their relations with Iran. Iran is one of the richest countries in the world in natural gas reserves, and as you can see on the above map, Iran is also the country best located in order to send natural gas to Europe through its neighbouring Turkey.

Now what does Russia want from the Middle East? Russia is one of the richest countries in the world in terms of oil and natural gas reserves, and never needed, and will never need the resources of the Middle East for herself. The main aim of Russia in the Middle East is to stop the United States and the European Union from connecting Europe to the Middle East with pipelines. This would cause more competition in the European energy market. This greater competition in the European market would result in lower prices and revenues for Russia, and it would also reduce the geopolitical might of the Russian natural gas and oil, since European countries would be far less dependent on Russia for their energy security.

Russia is a highly corrupted country, and oil and natural gas account for most of her exports. Oil and natural gas sales account for 68% of Russia’s exports, as you can read in the following article of the US Energy Information Administration, titled “Oil and Natural gas sales accounted for 68% of Russia’s total export revenues in 2013”, December 2014.

Image 12

Russia's Natural Gas and Oil Exports

Source: http://www.eia.gov/todayinenergy/detail.cfm?id=19291

Natural gas accounts for only 14% of the Russian exports, but the importance of natural gas is quickly rising, firstly because the world’s natural gas reserves are expected to last much longer than the oil ones, second because natural gas is much better for the environment, and most countries are trying to substitute oil with natural gas, and finally because natural gas can be used much more effectively than oil as a geopolitical tool, when it is supplied by pipelines and long term contracts. When it is supplied in liquid form by ships i.e. LNG, its geopolitical might is greatly reduced.

For the Russian oil and natural gas exports you can also read the following Telegraph article, titled “Russia faces oil export catastrophe, snared in OPEC price trap”, December 2014, which describes the economic hardships that Russia suffers due to Saudi Arabia’s price war.

1st and 2nd Paragraphs

Vladimir Putin faces a catastrophic shortfall of at least $80bn (£51bn) in oil export revenue over the next year, after Opec kingpin Saudi Arabia signalled there will be no easing in the price war it has launched to recapture market share.

According to US Energy Information Administration (EIA) figures, oil and gas shipments accounted for 68pc of Russia’s total $527bn of gross exports in 2013, when Brent crude – comparable to Russian Urals – traded at an average of $108 per barrel.

http://www.telegraph.co.uk/finance/newsbysector/energy/11310312/Russia-faces-oil-export-catastrophe-snared-in-Opec-price-trap.html

In the following Eurostat table you can see Europe’s main oil and natural gas suppliers. It can be seen that in 2012 Europe imported 33.7% and 32% of her oil and natural gas respectively from Russia. Europe’s second biggest supplier is Norway, which is not a member of the European Union. However as I already said Norway’s natural gas and oil reserves are very small when compared to the Russian ones, and therefore Norway cannot provide a long term alternative to Russian gas and oil.

Image 13

Where does Europe Imports its Oil From

http://ec.europa.eu/eurostat/statistics-explained/index.php/File:Main_origin_of_primary_energy_imports,_EU-28,_2002%E2%80%9312_(%25_of_extra_EU-28_imports)_YB14.png

At the following US Energy Information Administration link you can see the best clients, i.e. importers, of Russian oil in 2012.

Image 14

Russia's Oil Exports by Destination

http://www.eia.gov/countries/cab.cfm?fips=RS

Germany is Russia’s best client, followed by the Netherlands. China is Russia’s third best client, followed by another five European countries. In the following article of New York Times, titled “How Much Europe Depends on Russian Energy”, September 2014, you can see how dependent on Russian oil each individual European country is.

http://www.nytimes.com/interactive/2014/03/21/world/europe/how-much-europe-depends-on-russian-energy.html?_r=0

The following table shows the Russian natural gas exports to Europe, in billion cubic meters. The figures are taken from Gazprom. Gazprom is the Russian natural gas giant, and it is controlled by the Russian state.

Image 15

Gazprom Gaz Supplies to Europe Part A

Image 16

Gazprom Gas Supplies to Europe PartB

Source: Gazprom http://www.gazpromexport.ru/en/statistics/

At the following link of the CIA’s World Factbook, you can see that total Russian natural gas exports for 2013 were 193 billion cubic meters. As you saw from the Gazprom figures above, 161.5 billion cubic meters of these sales were made to Europe and Turkey. Therefore most of the Russian natural gas sales are made to Europe and Turkey.

Image 17

Largest Natural Gas Exporters in the World

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2251rank.html

It is therefore clear that Europe and Turkey are by far Russia’s best clients, and that’s why Russia’s main objective in the Middle East is to block the connection of Middle East to Europe through pipeline networks that would not be controlled by the Russian government. Such pipeline networks would hurt Russian sales both in Europe and Turkey. It is also important to keep in mind that the importance of natural gas is increasing very fast. Therefore the geopolitical aims of Russia in the Middle East are exactly the opposite from the American ones.

Now what is it that China wants from the Middle East? China sees the Persian Gulf, in exactly the same way the United States did at the end of the Second World War. For China the Middle East is the region that can guarantee her energy security for the next decades. China wants to keep for herself as much as possible from the region’s natural gas and oil reserves, and she wants them in the lowest possible prices.

Therefore USA, China and Russia want very different things from the Middle East in the 21st century. The Americans want to use Middle East to reduce the Russian influence in Europe, the Russians want to protect their prices and market share in the European markets from the Middle East oil and natural gas, and the Chinese want the reserves of the Middle East for themselves at the lowest possible prices.

The following map depicts the pipeline networks that were supported by the Americans and the Europeans as competing to the Russian ones. The red-green line is Nabucco, a natural gas pipeline which was finally abandoned, and the red-purple line is the Baku-Ceyhan pipeline, an oil pipeline that has already been constructed. The Baku-Supsa oil pipeline has also been constructed, and it carries oil from Azerbaijan to Georgia and the Black Sea.

Image 18

Nabucco Baku Ceyhan

Nabucco had the backing of the European Investment Bank, as you can read at the following Deutsche Welle article, titled “Proposed Nabucco Gas Pipeline Gets European Bank Backing”, January 2009

http://www.dw.de/proposed-nabucco-gas-pipeline-gets-european-bank-backing/a-3980038

The European Investment Bank (EIB), is the non-profit bank of the European Union, and its purpose is to finance projects that are of vital  importance to the EU. At the following Reuters article, titled “U.S. throws weight behind EU’s Nabucco pipeline”, February 2008, you can read that the United States of America strongly supported Nabucco too.

http://uk.reuters.com/article/2008/02/22/eu-energy-usa-idUKL2212241120080222

Russia in the Middle East

The case of Russia in the Middle East is very simple, because the only thing that Russia wants is that the Middle East does not mess with the Russian sales in Europe. However it is very difficult for Russia to make friends in the Middle East, because contrary to the US, China and Europe, she is not an importer of oil and natural gas. Russia is an exporter and a natural competitor of the rich in oil and natural gas countries of the region.

It is not a coincidence that the oldest Russian ally in the region is Syria, a country poor in oil and natural gas, at least by the standards of the Middle East. As you can read in the following CNN article, titled “The Moscow-Damascus alliance: A tangled tale”, 2012, Syria has been a Russian ally since the Soviet Era and the 50s.

1st Paragraph

Many observers point to Moscow’s close ties with Damascus going back to the 1950s as a reason for Russia now acting to defend the al-Assad regime in Syria against its many internal and external opponents.

http://www.cnn.com/2012/02/09/opinion/russia-syria-relations/

 Image 19

Map of Syria

Iran and Iraq are two of the richest countries in the world in terms of oil and natural gas reserves, and they are Russia’s natural competitors. However they have been very close to Russia, due to their rivalry with the West. Their rivalry with the West, with the economic sanctions that this rivalry implied, prevented Western multinationals from entering and investing in the Iranian and Iraqi energy markets, and therefore the production in Iran and Iraq could not reach the levels reached by Saudi Arabia, Qatar, Kuwait, and UAE.

Moreover, very often these countries could not export to Europe due to economic sanctions. Therefore they were not Russia’s major competitors. In addition Iran and Iraq were very good customers of the Russian armament industry. Russia is also developing the Iranian nuclear program. Contrary to US, China and Europe, which are all importers of oil and natural gas, Russia is a major exporter, and therefore tensions in the region are very good for her, because they drive oil and natural gas prices upwards. While high oil and natural gas prices make governments in USA, Europe and China unpopular, they increase the revenues of the Russian government, and allow it to increase public spending, which is always very popular with the electorate.

But if Iran and Iraq manage to work things out with the West, they will no longer need Russia, and they will no longer have a motive to be aligned with her. These countries only need Russia as long as they are in bad terms with the West. The problem for the West is that it is very difficult to be in good terms with all the rich in oil and natural gas countries of the region, because these countries are very hostile towards each other, in a non-stop fight about who is going to better promote his oil and natural gas.

However it is still correct to say that it is much easier for USA, China and EU, than it is for Russia, to make friends in the region. The United States, even though they increased significantly their oil and natural gas production, they are still one of the world’s largest oil importers. Actually the US was the largest oil importer until 2013, when it became second to China, as you can read in the following article of the Energy Information Administration, titled “China is now the world’s largest net importer of petroleum and other liquid fuels”, March 2014.

http://www.eia.gov/todayinenergy/detail.cfm?id=15531

The Middle East always welcomes large oil and natural gas importers, as long as they do their shopping in the region of course. Therefore China, the US and Europe will always choose their allies, and Russia will only be able to pick what is left in order to make alliances.

China in the Middle East

Contrary to Russia, China is really hungry for the oil and natural gas reserves of the Middle East, ands she is the best client right now. All the rich countries of the Middle East are looking to China and the other Asian countries in order to sell their goodies, since the US has significantly reduced its purchases from the region, and Europe mainly buys from Russia.

The following table is from the Energy Information Administration article, titled “How much petroleum does the United States import and from where”, which shows from which countries the US imported its oil in 2013. The US still buys from Saudi Arabia, but the US oil imports from Saudi Arabia are expected to fall even more in the future, while exactly the opposite is expected to happen with the Chinese imports.

Image 20

America's oil imports Eng

http://www.eia.gov/tools/faqs/faq.cfm?id=727&t=6

At the following article of National Public Radio, titled “U.S. Rethinks Security As Mideast Oil Imports Drop”, November 2012, you can see with sky blue the current Chinese, American and European oil imports from the Middle East, and with dark blue what their imports are expected to be in 2035.

Image 21

US European and Chinese Oil Imports from the Middle East

Source: http://www.npr.org/2012/11/14/165052133/u-s-rethinks-security-as-mideast-oil-imports-drop

You can see that the Chinese imports are expected to be very high in the next decades, the American ones are expected to almost disappear, while the European ones will be somewhere in the middle. Therefore the prosperity of the Gulf countries relies to a large extent on China.

China is not only becoming the best customer in the region, but she has also managed to avoid making enemies until now, by keeping her army away from the Gulf, leaving that role to the Americans. Therefore China has managed to be in relatively good terms with all the countries of the Gulf, something that the Americans, the Russians and the Europeans have not managed to do.

China’s aim is to work with all the rich in natural gas and oil countries of the Middle East, without getting militarily involved, which would cost her billions of dollars, and which would make rivalries with the Gulf countries unavoidable. China wants to appear in the region as a peaceful businessman. However as the temperature in the Middle East rises, this becomes increasingly difficult, because all regional players are asking for China’s support.

The United States in the Middle East

The major obstacle for the US and the EU in the Middle East, in order to send natural gas to the EU through Turkey, is that currently they only have at their disposal the large natural gas reserve of Azerbaijan, namely the Shah Deniz field. Azerbaijan is a former member of the Soviet Union, but after the collapse of the Soviet Union Azerbaijan became a NATO friendly country, and at some point it might actually join NATO.

Azerbaijan hosts approximately 1 trillion cubic meters of natural gas. Most of this natural gas is held by the Shah Deniz field, a natural gas field located in the Caspian Sea (red circle in the following map).

Image 22

Map of Shah Deniz gas field

Obviously the 1 trillion cubic meters of Azerbaijani natural gas is not a true rival for the 48 trillion cubic meters of Russian gas. Therefore the Americans need to use the reserves of one of the other countries of the region that are rich in natural gas, i.e. Iran, Iraq, Qatar or Turkmenistan, if they want to send natural gas to Europe (see the following map). The problem is that the Russians, with the help of the Chinese, are making this very difficult for the Americans and the Europeans.

Image 23

Richest in Natural Gas Countries

Iran is a Russian ally, and Iraq and Syria belong to the Iranian sphere of influence. Actually Syria is a Russian ally too. Moreover the Russians were buying the natural gas of Turkmenistan and selling it through Gazprom, until Turkmenistan was connected to China through pipeline networks and long term contracts. Moreover the Russians are trying to help Iran connect to China through the Iran-Pakistan-India-China pipeline, in order to send its natural gas to China, leaving the European market to Russia.

In the following RT (Russia Today) article, a news agency funded by the Russian state, titled “Iran-Pakistan lifeline: Pipeline aims for global power balance”, March 2013, you can read that Russia is an enthusiastic supporter of the Iran-Pakistan pipeline.

1st Paragraph

The pipeline will bring more than simply an economic boost to both countries; it is a crucial guidepost on the path to peace. After generations of conflict, Iran and Pakistan are taking their economic destinies into their own hands – together.

http://rt.com/op-edge/gas-pipeline-pakistan-iran-068/

Russia wants to participate in the construction of the Iran-Pakistan pipeline, as you can read in the following Itar-Tass article, titled “Russia interested in construction of Iran-Pakistan gas pipeline”, September 2014. Itar-Tass is a news agency that belongs to the Russian Federation.

http://itar-tass.com/en/russia/750654

China also wanted to participate in the construction of the pipeline, as you can read in the following Times of Tehran article, titled “China to back Iran-Pakistan gas pipeline project”, June 2012

http://www.tehrantimes.com/economy-and-business/98622-china-to-back-iran-pakistan-gas-pipeline-project

In the following Wall Street Journal article, titled “Iran-Pakistan Pipeline Deal Irks U.S.”, February 2013, you can read that the pipeline is a big problem for the US, and the Americans are proposing to Pakistan, India and China the Turkmenistan-Afghanistan-Pakistan-India pipeline, TAPI, as an alternative.

1st Paragraph

 In what has been widely perceived as a pre-election stunt, Pakistan has pushed ahead with a controversial pipeline deal with Iran –  a move that has irritated the U.S. and that could lead to economic sanctions if Islamabad begins imports of Iranian gas.

4th, 5th Paragraphs

The U.S. has opposed the pipeline since its inception, promoting the Turkmenistan-Afghanistan-Pakistan-India pipeline as an alternative that keeps Iran firmly out of Asian energy markets.

Washington has made it clear that it will impose economic sanctions on Islamabad if it begins to buy gas from Iran. In a written reply to The Wall Street Journal, the U.S. embassy in Islamabad reiterated the U.S.’s position stating: “Our policy on Iran is well known. We have made it clear to all of our interlocutors around the world that it is in their interests to avoid activities that may be prohibited by UN sanctions or sanctionable under U.S. law.”

9th Paragraphs

While the pipeline could bring relief to energy-starved Pakistan, analysts say that the deal reveals more about the geopolitical dynamics between the U.S., Pakistan and Iran than about the government’s commitment to address the energy crisis.

http://blogs.wsj.com/indiarealtime/2013/02/20/iran-pakistan-pipeline-deal-irks-u-s/

 Image 24

Map of Iran Pakistan Pipeline and TAPI

In the end, with a generous loan from Saudi Arabia, Pakistan agreed to cancel the Iran-Pakistan pipeline, as you can read in the following Asia Times article, titled “Saudi grant kills Iran-Pakistan pipeline”, March 2014

http://www.atimes.com/atimes/South_Asia/SOU-02-210314.html

The Iran-Pakistan-India China Pipeline is a great geopolitical concern for the US, but it is an even bigger economic concern for the Saudis, because the Iranians and the Saudis are competing for the Indian, Pakistani and Chinese markets, and the Iran-Pakistan-India-China pipeline would give the Iranians a clear advantage over the Saudis, because the Saudis cannot connect to these countries by pipeline networks, and they have to use the sea lanes in order to export their oil.

You should not believe though, that the Americans are trying to block the pipeline because they want to sell to China and India themselves. By their efforts to normalize their relations with Iran, the Americans are causing severe problems in their relations with the Saudis, and all the American energy companies are working in Saudi Arabia. The Iran-Pakistan pipeline is a geopolitical concern for the US, while it is an economic concern for the Saudis. The truth is that the Americans need the Iranians, to counter the Russian influence in Europe.

However it is anyway difficult for the Iranians to supply Europe with sufficient quantities of natural gas right now, even if they reach an agreement with the West over their nuclear program. You might want to have a look at the following article of Trend, an Azeri site, titled “Delivering Iranian gas to EU unlikely, even in long time”, December 2014. The article explains that even if Iran is willing to supply Europe with natural gas, it will take many years of investments in order to bring the Iranian production to a level that would be adequate for the European demand.

http://en.trend.az/business/energy/2346522.html

Very often Iran does not even manage to cover its own natural gas needs, and imports more natural gas than it produces, as you can read in the following Reuters article, titled “Iran a net importer of gas from Mar 2011-Jan 2012”, January 2012.

1st, 2nd Paragraphs

“Iran, holder of the world’s second largest gas reserves, imported more natural gas than it exported over the last 10 months, Fars News Agency quoted the head of the National Iranian Gas Company (NIGC) as saying.

The semi-official news service reported NIGC director Javad Oji saying Iran had imported nearly 9 billion cubic metres (bcm) of gas in the 10 months since the start of the Iranian year on March 21, 2011, up 35 percent year on year”.

http://www.reuters.com/article/2012/01/18/iran-gas-imports-idAFL6E8CI2NZ20120118

Therefore even though the Iranians hold the second largest natural gas reserves in the world, it will take many years before they are ready to supply Europe, and that would be made much harder if in the meantime the Iranians were connected to China through pipelines and long term contracts, which is what the Russians are trying to do.

Another problem for the Americans is that as long as Iran is a Russian ally, and as long as Iraq and Syria belong to the Iranian sphere of influence, the Americans cannot even use the Qatari natural gas reserves to supply Europe through Turkey. A potential Qatar-Turkey pipeline would stop on a geographic “wall” formed by Iran, Iraq and Syria (see following map).

Image 25

Iran Iraq Syria as a Wall

By financing and supporting Jihadists, Turkey and Qatar are trying to break this “wall” in Syria and Iraq. The rebels in Syria and Iraq are also funded by Saudi Arabia, which feels threatened by the increasing Iranian influence in the region, since Iran is her most important rival in the Middle East. You can read in the following article of France 24, titled “Iraq’s Maliki accuses Saudi Arabia of supporting terrorism”, March 2014, that the Iraqi Prime Minister Al-Maliki accused Qatar and Saudi Arabia of funding the terrorists in Iraq.

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In an exclusive interview with FRANCE 24, Iraqi Prime Minister Nuri al-Maliki accused Saudi Arabia and Qatar of supporting global “terrorism” and seeking to destabilise Iraq.

http://www.france24.com/en/20140308-france24-exclusive-interview-iraq-maliki/

You can also read about the accusations of the Iraqi Prime Minister in the following Reuters article, titled “Iraqi PM Maliki says Saudi, Qatar openly funding violence in Anbar”, March 2014.

http://www.reuters.com/article/2014/03/09/us-iraq-saudi-qatar-idUSBREA2806S20140309

Therefore even though it is not easy for the Americans and the Europeans to send the Iranian natural gas to Europe, one should never forget that Iran is a natural competitor for Russia, and it would be very good for Iran to sell its natural gas and oil to Europe. Another reason the Iranians want to cut a deal with the West, is because the abolition of the western economic sanctions will allow the big Western multinationals to enter and invest in the Iranian energy market, which would dramatically increase the Iranian production and revenues, as you can read in the following Reuters article, titled “Iran lures oil majors with new contracts pledge”, January 2014.

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Iran will have a new, attractive investment model for oil contracts by September, its president and oil minister told some of the world’s top oil executives here on Thursday, part of its drive to win back Western business.

Iranian President Hassan Rouhani and Oil Minister Bijan Zanganeh said their new administration was keen to open up to Western investments and technology, executives who attended the meeting said. They also stressed the importance of fossil fuel, with global energy demand rising.

http://www.reuters.com/article/2014/01/23/us-iran-rouhani-davos-oil-idUSBREA0M0JD20140123

Gazprom is developing some Iranian fields, but Russia is a natural competitor of Iran, and she will never invest in Iran the way the Western multinationals would. Moreover the Western multinationals have superior technology, and they are the ones who revolutionized the production techniques that allowed the extraction of natural gas and oil from shale rock.

ChinaRussia

The main geopolitical objective of the Chinese is to ensure that in the next decades as much as possible of the oil and natural gas reserves of the Middle East will be available for China’s energy security. This objective is very well served by the main geopolitical objective of the Russians, which is to send the energy of the Caspian Sea and the Middle East to China, in order to stop it from reaching Europe through Turkey. In addition the Chinese want to have good relations with Russia, because they count on Russia too for their energy security. Russia is a very rich country in oil and natural gas reserves, and the two countries share common borders (see following map).

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Map of Russia and China

China and Russia recently signed a 400 billion dollar agreement, according to which Russia will supply China with approximately 35 billion cubic meters of natural gas per year, for the next 30 years.

The case of Turkmenistan is a very good example of Russian-Chinese cooperation. The Russians were pushing Turkmenistan to sell its natural gas through Gazprom, in order to prevent Turkmenistan from sending its natural gas to Europe through Azerbaijan, if the Trans-Capsian pipeline was ever built. At the following article of the Chronicles of Turkmenistan, titled “Is Russia Abandoning Turkmenistan”, January 2014, you can read that Russia is not buying the natural gas of Turkmenistan anymore, but she does not worry about it either, because Turkmenistan is now connected to China through pipelines and long term contracts leaving the European market to Russia.

http://www.chrono-tm.org/en/2014/01/is-russia-abandoning-turkmenistan/#comment-279404

With the red line in the following map, you can see what would be the Trans-Caspian pipeline, if it had it been built. This pipeline would connect Turkmenistan and Azerbaijan, but until December 2014 it has not been built. On the contrary Turkmenistan is already connected to China with a pipeline network that runs through Uzbekistan and Kazakhstan.

Image 27

Map of Trans Caspian Pipeline

The same has been the case with Kazakhstan. Kazakhstan does not have the rich natural gas reserves of Turkmenistan, but it is very rich in oil. Kazakhstan is also sending a large part of its oil production to China through pipeline networks, while the Americans and the Europeans are hopping that Kazakhstan can send a part of its oil to Europe through Azerbaijan and the Trans-Caspian pipeline.

Richest Countries in Oil Reserves

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Richest Countries in Oil Reserves Wikipedia

Source: http://en.wikipedia.org/wiki/List_of_countries_by_proven_oil_reserves

As you can see in the relevant Wikipedia link, the above figures are taken from OPEC 2011 figures. These figures should be used as an approximation, because shale rock has been included for some countries i.e. Canada, while it has not been included for some other countries.

A natural question would be why Russia does not mind the countries of the Persian Gulf and the Caspian Sea supplying China with natural gas and oil, while at the same time she prevents them from doing the same thing for Europe? The answer is that the rich in oil and natural gas countries of the Persian Gulf and the Caspian Sea need to sell somewhere their natural gas and oil.

Of course it would be better for Russia if the countries of the Gulf and the Caspian Sea did not exist, or if they were very poor in natural gas and oil reserves. However the countries of the Gulf and the Caspian Sea do exist and they have some of the richest oil and natural gas reserves in the world. Therefore these countries will either sell to Europe or Asia, and for Russia it is much better if they sell to Asian countries than if they sell to the European ones.

Russia faces much less competition in Europe than she faces in Asia. Asian countries have many choices. They are next to the Persian Gulf, next to the Caspian Sea, next to Russia, and next to Australia. Australia is becoming a significant exporter of liquefied natural gas (LNG). Moreover Russia needs the countries of the former Soviet Union to depend on her for natural gas and oil, in order to be able to exert some geopolitical influence.

 To better understand the Middle East, one must also take into account that the level of production is not only a function of the available reserves. There are also technological limitations about how much oil and natural gas can be produced from a given field.  For instance there might be a natural gas field of 1 trillion cubic meters, which can only produce 1 billion cubic meters of natural gas per year. Therefore there is not only competition about who is going to control this field in the future, but there is also competition about who is going to buy the 1 billion cubic meters of natural gas this year.

A good example is the Nabucco pipeline, which was supported by the EU and the US, and which was supposed to transfer each year to Europe 30 billion cubic meters of natural gas from Azerbaijan through Turkey. The Nabucco plan was aborted because it was very difficult to find these 30 billion cubic meters of natural gas.

That’s the basic story between Russia and China. Russia is trying to block the connection of the Middle East to Europe through Turkey, and that’s very useful for the Chinese, since it leaves more resources for China, and less selling options for the countries of the Middle East and the Caspian Sea, and less competition means lower prices for the Chinese. From their part, the Chinese are trying to suck the region’s resources, and this is very convenient for the Russians, because these resources will not end up in Europe competing with the Russian oil and natural gas.

 However the above does not mean that the Chinese and the Russians do not have conflicting interests too. First of all Russia is a major exporter of oil and natural gas, while China is a major importer. Therefore China, similarly to the US and the EU, who are also importers, wants low oil and natural gas prices, while Russia wants high oil and natural gas prices, and this is something that greatly affects a country’s policies.

In addition, the Russians and the Chinese very often compete for the same resources abroad, since both of them want to have access to foreign resources, the Russians in order to have more power as sellers, and the Chinese in order to achieve better deals as buyers. The case of Central Asia i.e. Turkmenistan, Kazakhstan and Uzbekistan is a good example. It is good for Russia that the oil and natural gas of these countries end up in China instead of Europe, but China’s influence in these countries is rising, and that’s definitely not good for Russia, because Russia used to be the dominant power in Central Asia.

Moreover China and Russia are two neighbouring super powers, both claiming the role of the regional leader. They are united when it comes in reducing the American influence in their neighbourhood, but that does not automatically resolve their own issues. After all it was only in 1969 that the two countries went to a mini war for the last time. On the question of whether China and Russia are friends or enemies, many analysts reply that they are the best “frenemies”. Three very good articles about the thorns in the Sino-Russian relations are the Financial Times article “Russia and China – Friends or ‘frenemies’?”, December 2014, the Economis’s “China and Russia: Best Frenemies”, May 2014, and Huffington Post’s “Russia-China Gas Deal”, May 2014. You can read these articles at following links.

http://www.huffingtonpost.com/aurelia-condrat/russia-china-gas-deal_b_5395214.html

http://blogs.ft.com/beyond-brics/2014/12/11/guest-post-are-russia-and-china-friends-or-frenemies/

http://www.economist.com/news/leaders/21602695-vladimir-putin-pivots-eastward-should-america-be-worried-best-frenemies

 USA-China

The most interesting duet in the Middle East is by far the USA-China one. USA and Russia do not presently have much room for cooperation, while China and Russia have plenty. However USA and China have room for both cooperation and confrontation. While the global interests of US and China are moving in opposite directions, it is possible that the realities of the Middle East will force the two countries to reach a minimum consensus for cooperation.

As I already said the US is no longer very dependent on the oil of the Middle East, and it will become even less dependent in the future, while exactly the opposite is true for China. As you can read in the following article of the National Public Radio, titled “U.S. Rethinks Security As Mideast Oil Imports Drop”, November 2012, the Americans are facing a great dilemma. On one hand they do not want, and cannot afford, to finance their military presence in the Persian Gulf, in order to safeguard oil that mainly goes to Asia. On the other hand the Americans do not want the Chinese to have total control of a region that is of such strategic importance, as it is the case with the Middle East.

http://www.npr.org/2012/11/14/165052133/u-s-rethinks-security-as-mideast-oil-imports-drop

The Americans realize that the Chinese need the region to secure their energy supplies, in the same way the Americans did in the past, and they have no problem with that. What they want from the Chinese though, is to stop backing the Russians all the time, and share with the US a part of the military cost associated with the Middle East. Moreover the Chinese would have to accept the American plan of connecting Middle East to Europe through pipeline networks, something that the Russians do not accept at the moment.

The Chinese have already made a move towards this direction, by abandoning the plans for the Iran-Pakistan pipeline, as you can read in the following article of the Express Tribune, titled “Gas import: China abandons IP project, eyes TAPI pipeline”, April 2014. As you can read in the article the Chinese are willing to go for the TAPI pipeline (Turkmenistan-Afghanistan-Pakistan-India) instead of the Iran-Pakistan one. The Express Tribune is Pakistan’s only international newspaper, and it cooperates with the international edition of the New York Times.

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In a strategic move, China has shelved a plan to be part of the Iran-Pakistan (IP) gas pipeline that faces the threat of US sanctions and has come up with an offer to join the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline to meet its growing energy needs.

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Earlier, the official added, China had expressed interest in becoming a member of the IP project, but changed its stance later as the future of the venture looked uncertain in the face of influence from a Gulf Arab country and threat of US sanctions.

http://tribune.com.pk/story/701979/gas-import-china-abandons-ip-project-eyes-tapi-pipeline/

If the Iran-Pakistan pipeline is not built, it is much easier for the Americans to send Iranian natural gas to Europe. Moreover there have been some efforts to achieve some minimum cooperation between the navies of the two countries, as you can read in the following Wall Street Journal article, titled “China Pushes Limits to Closer Ties With U.S. Military”, July 2014:

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China is seeking greater access to U.S. aircraft carriers and guidance on how to operate its own first carrier, the Liaoning, testing the limits of a newly cooperative military relationship the two sides have tried to cultivate in the past year.

The latest Chinese request came last week when U.S. Adm. Jonathan W. Greenert, chief of naval operations, visited China to explore new areas of cooperation, despite recent maritime tensions and the presence of an uninvited Chinese spy ship at naval drills off Hawaii.

http://www.wsj.com/articles/china-pushes-limits-to-closer-ties-with-u-s-military-1405964884

In the first three paragraphs of the following Wall Street Journal article, titled “Middle East Oil Fuels Fresh China-U.S. Tensions”, October 2013, you can read that China buys from the Middle East more oil than the United States, and this causes tensions between the two countries, because the Americans feel they are paying to protect oil that ends up in Asian countries, and they are pushing China to back a bit more their foreign policy.

Even though the article does not say so, by “backing the American foreign policy”, it means to adopt a more neutral stance between the US and Russia, and to help with the connection of the Middle East to Europe. Don’t forget that China can influence countries like Iran and Syria, which are beyond Washington’s influence. In the past, China has backed all of Putin’s policies, like Qaddafi in Libya, Assad in Syria and Sisi in Egypt.

However China did so in a more diplomatic and a less military way than Russia did. The article also says that China does not have the military means to safeguard the Persian Gulf by herself, and that Zhang Guobao, the former head of the Chinese National Energy Association, said that it is better for the Chinese if the Americans keep safeguarding the Middle East.

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China is overtaking the U.S. as a buyer of Middle East oil, adding fuel to diplomatic tension between the nations over security in the region.

China surpassed the U.S. as importer of Persian Gulf crude several years ago, by some measures. Now it is on track to overtake the U.S. this year as the world’s No. 1 buyer of oil from the Organization of the Petroleum Exporting Countries, the largely Middle Eastern energy-exporting bloc.

The turnabout has added to tensions because it leaves the U.S. military securing China’s growing oil shipments in the region at a time Beijing resists U.S. pressure on it to back American foreign policy in the Middle East.

 4th, 5th, 6th Paragraphs

For years, China and other oil-consuming nations have benefited as Washington spent billions of dollars a year to police chokepoints like the Strait of Hormuz and other volatile parts of the Middle East to ensure oil flowed around the globe.

But the rise of North America’s shale oil and gas industry has put the U.S. on track to pass Russia this year as the world’s largest combined producer of oil and gas, if it hasn’t done so already, according to a recent analysis of global data by The Wall Street Journal.

That rise, combined with flat U.S. oil consumption, is making America far less dependent on imported oil, including from the Middle East, even as China’s reliance on the region’s oil grows.

 15th, 16th, 17th Paragraphs

Signs of tension are surfacing. Beijing has asked for assurances that Washington will maintain security in the Persian Gulf region, as China doesn’t have the military power to do the job itself, according to people familiar with recent discussions between the countries.

In meetings since at least last year, Chinese officials have sought to ensure U.S. commitment to the region isn’t wavering, particularly as the Obama administration has pledged to rebalance some of its strategic focus toward East Asia, said people familiar with those discussions.

In return, U.S. officials have pressed China for greater support on issues such as its foreign policy regarding Syria and Iran. U.S. officials in private discussions have pressed China to lower its crude imports from Iran, for example, according to a person with knowledge of the discussions.

 20th Paragraph

At an April Brookings Institution conference in Washington, D.C., when the former head of China’s National Energy Administration, Zhang Guobao, was asked whether China could assume a greater role in protecting the region’s shipping lanes, he responded: “Why don’t the Americans do the job for now.”

http://www.wsj.com/articles/SB10001424127887324755104579073283948517714

 It is not only the economic cost that scares China when it comes to safeguarding the Middle East. China also worries about the geopolitical costs associated with becoming a referee in the regional oil and natural gas wars. Until now the Chinese have been backing Russia, but they did so mainly with diplomatic means. If however they become a major military power in the Gulf, the Chinese will have to pursue a more active policy, and they will lose the advantage of appearing as a peaceful businessman, which is very important in order to work with all the countries of the region. This is an advantage that is not enjoyed by the Americans, the Europeans or the Russians.

On the other hand the Chinese cannot permanently avoid a significant military presence in the region, because they need to protect their multi billion dollar investments. In the following Financial Times article, titled “China’s strategic dilemma in the Middle East”, August 2014, you can read that if the Americans stick to their new doctrine of no more American “boots” in the Middle East, the Chinese will not have any other choice than to increase their military presence.

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The third option is hardly more palatable. That is to recognise that as a trading nation China has a direct stake in the stability of the countries with whom it conducts its trade, especially in key raw materials. If, as seems likely, the US continues to resist the idea of putting American boots back on the ground in the Middle East, the Chinese could find themselves forced, however reluctantly, to become a guarantor of stability for the regimes which matter to them. From that starting point the slippery slope to greater engagement begins. But as the Americans – once the nation most hostile to imperialism – has found over the last century, empires are often created unintentionally, as the cumulative result of immediate responses to one event after another.

http://blogs.ft.com/nick-butler/2014/08/17/chinas-strategic-dilemma-in-the-middle-east/

At the following Forbes article, titled “What Happens When America No Longer Needs Middle East Oil?”, March 2012, you will read that the Americans look like the English did  in the 1970’s, when they could no longer finance their military presence in the Middle East, and they left this role to the United States. The article also says that a decreasing American presence in the region will mostly benefit Iran, which will emerge as the strongest regional power, while Saudi Arabia and Israel will be the losers, because they will not have the American protection anymore. The Chinese will also lose because they will have to assume a significant cost for safeguarding the region.

http://www.forbes.com/sites/lorenthompson/2012/12/03/what-happens-when-america-no-longer-needs-middle-east-oil/

 Many people do not realize that it is very easy for wars to break out in the Middle East, because the regional powers are competing so hard about who is going to sell more oil and natural gas. If there is not a large foreign power in the region, whether that is USA or China, the likelihood of wars will be higher and not lower. Therefore sooner or later China will have to be a big military power in the region irrespective of whether she cooperates or competes with the US.

The US and China will have to decide how they are going to resolve this dilemma. None of them want to assume all the military cost required for safeguarding the Gulf, but at the same time they are the biggest importers of oil in the world, and they have a common interest in keeping oil prices low. The problem is that they are not allies as was the case with the English and the Americans in the 70s, and it is difficult for them to cooperate. In the following article of the CNBC, titled “China’s Arab march”, June 2014, you can read that as the US will be decreasing its military presence in the Middle East, China will have to increase hers, in order to protect her multi-billion dollar investments in the region.

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Unsurprisingly, energy has been a key factor in economic ties with the Arab world. From 2004 to 2013, China’s crude oil imports from Arab countries grew by more than 12% annually, on average, reaching 133 million tons per year. And China’s “march west” strategy furthers its goal of safeguarding access to these resources. As the director of the State Council’s Development Research Center, Li Wei, pointed out in February, at the current rate, China will be consuming 800 million tons of oil annually, and importing 75% of its petroleum, by 2030.

 In this sense, China’s trajectory contrasts sharply with that of the United States, where the rapid growth in output of shale oil and gas, together with energy-saving measures, has brought energy independence closer than ever – a point that President Barack Obama emphasized in his most recent State of the Union address. In fact, according to the US Energy Information Administration, China surpassed the US as the world’s largest net oil importer earlier this year.

 Moreover, the US is gradually disengaging strategically from the greater Middle East, creating a vacuum that China seeks to fill. To succeed, China will need to become more attentive to the region’s complex dynamics; find creative ways to participate in conflict-resolution efforts; and respond enthusiastically to Middle Eastern governments’ growing desire to connect to Asia.

http://www.cnbc.com/id/101792181

In the following article of Al-Monitor, titled “Navy exercises bring Iran, China closer”, October 2014, you will read that on the 20th of September 2014, China sent warships in the Persian Gulf, for a joint exercise with the Iranian Navy, and this was the first time that Chinese warships entered the Persian Gulf.

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On Sept. 20, China dispatched ships to the Persian Gulf for a joint exercise with the Iranian navy — the first time that Chinese warships have ever sailed in the Gulf. The Chinese missile destroyer Changchun and missile frigate Changzhou of the 17th Naval Fleet took part in a five-day joint training drill, the aim of which was “establishing peace, stability, tranquility and multilateral and mutual cooperation,” according to Adm. Amir Hossein Azad, commander of Iran’s First Naval Zone.

http://www.al-monitor.com/pulse/ru/originals/2014/10/iran-china-navy-persian-gulf-us.html

At the following article of the National Interest, titled “Time for a U.S.-China Partnership in the Middle East”, September 2014, you will read that while the Americans and the Chinese are globally moving in opposite directions, the Middle East is an exception, and there is room for an American-Chinese cooperation.

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Under President Xi Jinping, China and the United States have pledged to forgea new type of great-power relationship. To date, this effort has largely focused on strengthening bilateral cooperation in the Asia-Pacific. This is sensible insofar as Asia is the most important region for both the United States and China, and especially for interactions between them. At the same time, it is also the region where their interests are most at odds, and thus where cooperation is most likely to remain elusive.

By contrast, America’s and China’s major interests in the Middle East are nearly perfectly aligned. Foremost among these is the free flow of oil. Since at least the 1970s, the free flow of oil in the Persian Gulf has been a core U.S. national interest. Although the United States is becoming increasingly energy independent, its interest in a prosperous global economy makes the free flow of oil a continued priority.

Even as America’s dependence on Middle Eastern oil wanes, China’s dependence on it grows. This year China is expected to surpass the United States as the largest petroleum importer, and Beijing will soon get over 60 percent of its oil supplies abroad. The Middle East will remain the focal point of China’s efforts to secure foreign oil. Already, the region accounts for over half of China’s oil imports. Despite China’s best efforts to diversify its energy sources, Beijing’s spiking demand will force it to rely on the turbulent region for the foreseeable future. Giving China a stake in the region is essential for reducing Beijing’s sense of vulnerability.

 11th, 12th Paragraphs

Still, Beijing can complement U.S.-led political and military engagements. For example, China maintains working relationships with a number of important governments in the region that the United States shuns, such as Syria and Iran. The Palestinians also view China as a more impartial actor than the United States, and Beijing’s active involvement in the Middle East peace process could help unfreeze negotiations.

Similarly, while China cannot independently support long-term military interventions in the Middle East, it will be increasingly capable of participating in U.S.-led operations in the years ahead. This would not only reduce the burden America bears for these interventions, but would also help to improve mil-to-mil ties between China and the United States.

http://nationalinterest.org/feature/time-us-china-partnership-the-middle-east-11318

 The good thing is that USA and China are two of the richest countries in the world in terms of shale rock. The new production technologies allow the production of oil and natural gas from shale rock, which might relieve some of the tensions in the future. The following table shows the richest countries in the world in shale rock as given by Wikipedia.

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Richest Countries in Shale Rock

http://en.wikipedia.org/wiki/List_of_countries_by_recoverable_shale_gas

 I must also say that even though China and the US will be the two big rivals in the 21st century, there are also some factors that bring them together. The Americans are a much bigger trading partner than the Russians for China. Moreover, the US and China are major importers of oil, and contrary to Russia they both want low energy prices. Therefore the Americans, the Chinese and the Europeans, want the countries of the Middle East to produce as much oil as possible, while the Russians want the contrary.

In the past the Americans managed to keep oil prices low, through their alliance with Saudi Arabia. Now that the Chinese are the big customer of the region, and they are more popular than the Americans, they have to use their influence to make sure that as much oil as possible flows from Saudi Arabia, Iraq, Iran and the other countries. However in the same way that an appetite for low oil prices bring the US and China together, an appetite for high oil prices bring Saudi Arabia, Iran, Russia and Qatar together.

The oil and natural gas producing countries have a motive to act as a cartel, in order to reduce production and increase prices. Actually that’s the role of OPEC (Organization of the Petroleum Exporting Countries). As you can read in the first two paragraphs of the following Guardian article, titled “Russia, Iran and Qatar announce cartel that will control 60% of world’s gas supplies”, October 2008, Russia, Iran and Qatar are holding 60% of the global natural gas reserves, and they are making efforts to create a natural gas cartel, similar to what OPEC is for oil.

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“Western concerns about global energy markets hit new heights last night when Russia, Iran and Qatar said they were forming an Opec-style gas cartel.

The move by the three countries, which control 60% of the world’s gas reserves, was met with immediate opposition from the European commission, which fears the group could drive up prices”.

http://www.theguardian.com/business/2008/oct/22/gas-russia-gazprom-iran-qatar

It is very important to take into account the common interests that the importing and exporting countries have when it comes to prices. Countries that export oil and natural gas compete about their market shares, but at the same time they want high energy prices. Countries that import oil and natural gas compete about who is going to control the rich in oil and natural gas regions, but they all want low energy prices. At the following two CIA tables you can see the biggest importers and exporters of oil in the world.

Largest Exporters of Oil

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Largest Oil Exporters in the World

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2242rank.html

Largest Importers of Oil

Image 31

Largest Importers of Oil in the World

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2243rank.html

Therefore to analyze the Middle East one needs not only to take into account the antagonism between oil and natural gas exporters, but also the common interests between them. And the same is true for the countries that are oil and natural gas importers. At the following Itar-Tass article, titled “Lavrov goes to Saudi Arabia to discuss situation in Syria, Iraq”, June 2014, you can read that Saudi Arabia and Russia were discussing the possibility of cooperation between the two countries in the energy sector, including nuclear energy. Itar-Tass is a news agency that belongs to the Russian Federation.

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The two countries also develop economic cooperation, including in the energy sphere. On June 18, Russia and Saudi Arabia agreed on a draft intergovernmental framework agreement on cooperation in peaceful uses of nuclear energy and subsequent steps in preparing the agreement for signature.

http://itar-tass.com/en/russia/736939

Saudi Arabia is the country that together with the Americans fought the Soviet Union for decades. And as soon as the Americans are not the best customers and they need the Iranians, the Saudis and the Russians are trying to cooperate against them, while the Iranians who have traditionally been Russian allies, want to sell oil and natural gas to Europe, something that would hurt the Russian interests. That shouldn’t surprise anyone, because international relations are about money and not about friendship.

Regional Powers and the Wars in Iraq

The geopolitical objectives of the US, Russia and China in the Persian Gulf, which I just described, is the first geopolitical axis that should be taken into account in order to understand the Middle East. The second geopolitical axis that must be taken into account are the objectives of the rich in oil and natural gas countries of the region. The very rich countries of the Persian Gulf are Saudi Arabia, Iran, Iraq, Qatar, Kuwait and United Arab Emirates, as you can see in the two following tables of the US Energy Information Administration.

Richest Countries in Natural Gas Reserves (Page  21 of the following link.

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Richest Countries in Natural Gas

http://www.eia.gov/countries/analysisbriefs/Iran/iran.pdf

Richest Countries in Oil Reserves (page 10 of the following link)

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Richest Countries in Oil

http://www.eia.gov/countries/analysisbriefs/Iran/iran.pdf

Until about a decade ago, before Saddam Hussein was overthrown, there were three main blocks in the Persian Gulf. The first one was Saudi Arabia with her allies i.e. the United Arab Emirates, Qatar and Kuwait. These countries were participating in the Gulf Cooperation Council, which among other things, was a military doctrine against Iran and Iraq.

The second block was Iraq. In Iraq the majority of the population are Shia Muslims, but Saddam Hussein, the country’s former dictator, was a Sunni Muslim. Saddam Hussein did not care too much about religion, because he was a national socialist leader, like Qaddafi in Libya, Assad in Syria, Hosni Mubarak in Egypt and others. National socialists believe in a secular state, contrary to the Islamist leaders of Saudi Arabia, Qatar and Iran, who believe in a religious state and the Islamic law. National Socialism is a combination of nationalism and socialism, while communism, at least in theory, believes in socialism without national borders. National socialists believe in the dominance of a national working class, while communists believe in the dominance of an international working class.

The third main block in the Persian Gulf were the Iranian Islamists, with Syria as their main ally.

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Map of Persian Gulf

The Saudis were in very bad terms with Iraq and Saddam Hussein, but Iran was an even greater enemy for them. Saddam Hussein was the Iraqi leader during the brutal Iran-Iraq war of 1980-1988. The Saudis and their allies were funding Saddam Hussein during this war, because they considered Iran as their main enemy. Actually that was the reason that in 1991, during the military operation Desert Storm, after Saddam Hussein invaded Kuwait in 1990, the Americans, the Saudis and their allies, did not overturn Saddam Hussein, literally stopping outside Bagdad.

As you can read at the following CNN article, titled “Massive firestorm targets Iraqi leadership”, March 2003, the Americans and their allies had destroyed the Iraqi army, and needed 2 to 4 days to enter Bagdad. And yet they decided to stop without overturning Saddam.

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With Iraqi resistance nearing collapse, Bush declared a ceasefire on February 28, ending the Persian Gulf War. According to the peace terms that Hussein subsequently accepted, Iraq would recognize Kuwait’s sovereignty and get rid of all its weapons of mass destruction (including nuclear, biological and chemical weapons). In all, an estimated 8,000 to 10,000 Iraqi forces were killed, in comparison with only 300 coalition troops.

Rodgers, who is accompanying the 3rd Squadron of the 7th U.S. Cavalry Regiment, lead element of the 3rd Infantry Division, said the U.S. forces could reach Baghdad in two to four days. (Slide show,On the scene)

http://www.cnn.com/2003/WORLD/meast/03/21/sprj.irq.war.main/

Why did the US and their allies decide not to overturn Saddam Hussein? The reason was that by overturning Saddam Hussein, it would be easier for Iran to gain influence in Iraq, because the majority of the Iraqi population are Shia Muslims, and the same is true for Iran. If Iraq was to fall in the Iranian sphere of influence, the Iranians would reach the Saudi borders, since Iraq and Saudi Arabia are neighbouring countries.

I believe this is also the main reason that Saddam Hussein had the nerve to ignore the U.S., the Saudis and their allies and invade Kuwait. He knew that it would simply make things worse for the Americans and the Saudis to overturn him. He also had a strong army and he decided to take his chances and go for the oil of Kuwait. And Saddam was right. He did not manage to control the oil of Kuwait for more than a year, but his opponents did not overturn him even though he set Kuwait’s oil fields on fire before retreating, and even though he spilled tons of oil in the Persian Gulf, in order to burn any American troops that would attempt to invade Iraq from the sea. And yet the Americans and their allies decided not to touch him.

Image 35

Map of Iraq and Kuwait

As you can read in the following CNN article, titled “Kuwait still recovering from Gulf War fires”, January 2003, Saddam Hussein sent engineers to set Kuwait’s oil fields on fire, and it took seven months before these fires were finally extinguished. Over 1 billion barrels of oil were burnt in these fires. Saddam was accusing Kuwait of producing too much oil in order to keep the price of oil low, which he perceived as an oil war on Iraq.

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In the waning days of the Persian Gulf War, as Iraqi forces retreated to Baghdad, Saddam Hussein sent a team of engineers into the Kuwaiti oil fields and blew up hundreds of wells.

Over the next seven months, more than 1 billion barrels of oil went up in flames, and Kuwait and much of the Persian Gulf was engulfed in a poisonous smoke, creating a large-scale environmental disaster.

http://www.cnn.com/2003/WORLD/meast/01/03/sproject.irq.kuwait.oil.fires/

 Even though the United Stated decided not to overturn Saddam in 1991, they had no problem of doing so in 2003. Why? What was different in 2003? The difference in 2003 was that Saudi Arabia was no longer the ally she used to be for the Americans in 1991. The Americans blame the Saudis for the 9-11 attack on the World Trade Centre. Fifteen out of nineteen terrorists of the 9-11 attack were Saudis as you can read at the last part of the following CNN article, titled “September 11th Hijackers Fast Facts”, September 2014.

http://www.cnn.com/2013/07/27/us/september-11th-hijackers-fast-facts/

The Americans are not the good customer they used to be for the Saudis. They do not buy as much oil as they did in the past. At the same time, due to Saudi Arabia’s alliance with US, China has stronger connections with Iran. Iran has been the traditional US rival in the region, and as expected Iran was the country mainly approached by China. This is a very big problem for Saudi Arabia, a country that counts on China for her future sales, and therefore seeks a stronger connection with China. As you can read in the following article from the site of the state owned China Network Television CNTV, titled “Closer military ties between China, Saudi Arabia”, February 2012, the Saudis are looking for closer military ties with the Chinese.

http://english.cntv.cn/program/newsupdate/20130402/106790.shtml

As you can read in the following article of the Wall Street Journal, titled “Saudi Arabia, China Sign Nuclear Cooperation Pact”, January 2012, Saudi Arabia wants China to develop her nuclear program. This has very important implications in the American-Saudi relations, since China will be the major rival of the US in the 21st century.

http://www.wsj.com/news/articles/SB10001424052970204468004577164742025285500

The Saudis and the Chinese have jointly made multi-billion dollar investments in the energy sector, as you can read in the following Bloomberg article, titled “Sinopec Buys Saudi Yanbu Refinery Stake for $562 Million”, October 2014.

http://www.bloomberg.com/news/2014-10-30/sinopec-to-buy-saudi-yanbu-refinery-stake-from-parent.html

What I am saying is that since the US is no longer the best customer for Saudi Arabia, and with China’s role as a buyer and as an investor in the region increasing, the Saudi-American relations cannot be what they once were. It should be very natural to expect some members of the Saudi elites to see the US as an obstacle to their relations with the Chinese. Moreover the Saudis always accuse the Americans for not solving the Arab-Israeli conflict, something that the Iranians have always used in order to attack Saudi Arabia as a US ally, thus increasing the Iranian appeal in the Arab and Muslim populations.

Therefore the Americans did not hesitate to take Saddam Hussein out, since they care much less about Saudi Arabia. The American military bases have been moved to Qatar in 2003. By overturning Saddam Hussein, a strong autonomous Iraqi Kurdistan was created in Northern Iraq. Iraqi Kurds are the majority of the population in Northern Iraq, and they are very friendly towards the West. Moreover in the past they have been severely oppressed by Saddam Hussein. Kurdistan lies in four countries, Iraq, Iran, Turkey and Syria (see following map).

Image 36

Map of Turkmenistan

In addition, an Iraqi Kurdistan not controlled by the Iraqi government, could in the future supply the Nabucco pipeline and Europe with natural gas and oil, reducing the Russian influence in Europe. The region of Iraqi Kurdistan is one of the richest regions in the world in terms of oil and natural gas. As long as Saddam Hussein was in power, the West could not buy Iraqi oil, because Saddam would use the revenues to buy Russian arms. That’s the reason the West introduced the “oil for food programs”, according to which the West was buying Iraqi oil in exchange for food and medicine, so that Saddam could not use the money to buy Russian arms.

But nobody cares if the Iraqi Kurds use their oil revenues to buy arms, since they are allies of the Western world. Iraqi Kurds are already exporting oil through Turkey, something that infuriates the Iraqi government of the south, as you can read at the following Reuters article, titled “Iraqi Kurds sell third major oil cargo, fourth heads to Croatia”, August 2014.

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Iraqi Kurdistan has delivered its third major cargo of crude oil out of a Turkish port and a fourth is sailing to Croatia, showing the autonomous region is finding more buyers despite legal pressure from Baghdad and setbacks in the United States.

http://uk.reuters.com/article/2014/08/15/iraq-security-oil-kurds-idUKL6N0QL31Q20140815

Moreover the overturn of Saddam Hussein, and his replacement with a pro-Western government, allowed the economic sanctions against Iraq to be abolished, something that greatly increased the Iraqi oil production and kept oil prices low. The Americans had always counted on Saudi Arabia for keeping oil prices low. With the relations between the two countries deteriorating, the Americans could no longer count on the Saudis. An increase in Iraqi oil production would help the cause of low oil prices. One should never forget that Al-Maliki, the Iraqi Prime Minister of the period 2006-2014, was pro-American, even though he was an Iranian ally, and the Saudis were accusing him of being an Iranian agent.

Moreover the increase in Iraqi oil production, reduced competition between USA and China. As you can read in the following article of the New York Times, titled “China Is Reaping Biggest Benefits of Iraq Oil Boom”, June 2013, China has greatly benefited from Saddam’s overturn, since state owned Chinese energy companies are taking 50% of the Iraqi oil production.

http://www.nytimes.com/2013/06/03/world/middleeast/china-reaps-biggest-benefits-of-iraq-oil-boom.html?pagewanted=all

At the following article of the Washington Post, titled “Why it’s good news for the U.S. that China is snapping up Iraq’s oil”, June 2013, you will read that even though China is taking the biggest part of the Iraqi oil, the US is still better off, because the Iraqi oil helps in keeping oil prices down, and because the increased oil production reduces competition between USA and China in other rich in oil countries.

http://www.washingtonpost.com/blogs/worldviews/wp/2013/06/03/why-its-good-news-for-the-u-s-that-china-is-snapping-up-iraqs-oil/

Therefore the overturn of Saddam Hussein was a very positive thing for the Americans. The only negative consequence was that a large part of Iraq came under Iranian influence, but since the Saudis were not a reliable US ally anymore, that was not a big problem for the Americans. Actually it cannot be a coincidence that it was in 2001, after the 9-11 attack, that the US tried for the first time the Qatari air bases, and in 2003 the Americans moved their headquarters from the Saudi base Prince Sultan to the Al Udeid base in Qatar.

In the 16th paragraph of the following New York Times article, titled “U.S. to Move Air Base to Qatar”, April 2003, you can read that the Americans used the Qatari bases for the first time in 2001. The article also says Qatar paid 1 billion dollars built its air bases, in order to lure the US to move its headquarters there.

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The United States is shifting its major air operations center for the Middle East from Saudi Arabia to Qatar, the first step in what is likely to be a significant reduction of American forces in Saudi Arabia and a realignment of American military presence in the region, senior military officials said today.

The day-to-day responsibility for overseeing hundreds of air missions in Iraq and the Middle East will be transferred this week from Prince Sultan Air Base near Riyadh, Saudi Arabia, to a backup headquarters the United States built last year at Al Udeid Air base in Qatar, senior officials said.

A formal decision about whether to make this arrangement permanent has yet to be made by President Bush and Defense Secretary Donald H. Rumsfeld.

But with the war in Iraq winding down and continued unease in Saudi Arabia about a large American military presence in the kingdom, American commanders believe that the time is right to see if the Qatar base can serve as the United States Central Command’s air operations center of the future.

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Senior Bush administration officials sought to emphasize that shifting the location of the command center should not be interpreted as an indication that the United States was ending its military relationship with Saudi Arabia, which has involved efforts to train Saudi forces, as well as the use of Saudi air bases.

“We are not leaving Saudi Arabia,” a senior administration official said today.

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Qatar built Al Udeid Air Base in 1996 at the cost of more than $1 billion. The nation did not have an air force at the time, but it wanted to encourage the United States military to base its aircraft there.

The United States did not begin to use the base until Sept. 29, 2001, when the Air Force needed to get aircraft in position for its war against the Taliban and the Al Qaeda terrorist network in Afghanistan.

http://www.nytimes.com/2003/04/28/international/worldspecial/28BASE.html

 In his article, titled “The real target of the war in Iraq was Saudi Arabia”, August 2003, Jeffrey Sacks, a professor at Columbia University, writes that the US secret services take it for granted that behind the 9-11 attack were the Saudis, and they attacked Iraq in order to find new grounds that were friendly to them, in order to overcome their problems with the Saudis. The friendly region to the US could be the Iraqi Kurdistan.

He writes in the first paragraph:

“The crucial question regarding Iraq is not whether the motives for war were

disguised, but why. The argument that Iraq posed a grave and imminent

threat was absurd to anybody not under the spell of round-the-clock White

House and 10 Downing Street spin. But the actual reasons for launching the

war remain obscure. The plot thickened with the release last month of the

US Congressional investigation into September 11. It seems increasingly

likely that Iraq was attacked because Saudi Arabia was deeply implicated in

the terrorist attacks”.

 And he continues in the 6th paragraph:

“Second, a substitute had to be found for the US military bases in Saudi

Arabia. Like Saudi oil, the bases too were now under threat, especially

because the US presence in the Saudi kingdom was known to be the

principal irritant for al-Qaeda. Iraq would become a new base of US military

operations. Paul Wolfowitz, deputy defence secretary, has already explained

during an interview with Vanity Fair”.

http://www.earth.columbia.edu/sitefiles/file/Sachs%20Writing/2003/FT_2003_RealTargetWarwithSaudiArabia_08_13_03.PDF

Iraq, after Saddam Hussein, should not be seen as an independent block but as an Iranian ally. However a third block was created and that was Qatar. Qatar is the third richest country in the world in terms of natural gas reserves, and it also has some descent quantities of oil. Once the Americans moved their military bases there, Qatar started following an independent foreign policy without having to consult Saudi Arabia and the United Arab Emirates anymore.

Qatar is in the middle of Saudi Arabia and Iran, both geographically and metaphorically. Qatar and Iran share the richest natural gas field in the world, namely the South Pars/North Field. The Qatari part of the field is the North Fields, which holds almost all of Qatar’s natural gas, and South Pars is the Iranian part, which holds about 2/3 of the Iranian natural gas reserves.

Image 37

Map of South Pars North Field

As you can read at the following Reuters article, titled “Gas-rich Qatar annoys Arabs with pro-Iran policy”, April 2009, the Arab countries are annoyed with Qatar’s good relations with Iran. Moreover the article says that due to the geography of the South Pars/ North Field, the Iranians could easily knock out the Qatari economy if they wanted to.

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With its liquefied natural gas investments now paying dividends, Qatar has the second highest per capita income in the world, although its population has doubled in five years to 1.5 million. Only 250,000 of those are nationals.

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“Inviting Ahmadinejad was promotion, not mediation. But you only have to look at the map of the north fields to understand it: the Iranians could knock the economy out for 10 years easily,” the diplomat said.

http://uk.reuters.com/article/2009/04/01/us-qatar-iran-arabs-idUKTRE53035W20090401

But we should not see Qatar as an ally of Iran. The two countries have many differences too, as we recently saw with the Qatari funding of the Syrian rebels, in order to overthrow the Syrian dictator Bassar al Assad, the strongest Iranian ally in the Middle East, as you can read in the following Financial Times article, titled “Qatar bankrolls Syrian revolt with cash and arms”, May 2013.

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The gas-rich state of Qatar has spent as much as $3bn over the past two years supporting the rebellion in Syria, far exceeding any other government, but is now being nudged aside by Saudi Arabia as the prime source of arms to rebels.

The cost of Qatar’s intervention, its latest push to back an Arab revolt, amounts to a fraction of its international investment portfolio. But its financial support for the revolution that has turned into a vicious civil war dramatically overshadows western backing for the opposition.

http://www.ft.com/intl/cms/s/0/86e3f28e-be3a-11e2-bb35-00144feab7de.html

Qatar is an Arab country, and has a lot in common with the other Arab countries of the Persian Gulf, but it also shares with Iran the South Pars/North Field. Note that Iran is not an Arab country. The Iranians are Persians.

Qatar is also investing heavily abroad, in order to buy political influence. If you google the words “Qatar Foreign Investments”, or “Qatar Investment Authority”, you will be very impressed about the magnitude of Qatari investments, especially in Europe. Only to host the World Cup of 2022, Qatar promised to invest 200 billion dollars in infrastructure, as you can read in the following Yahoo article, titled “Qatar reportedly spending $200 billion to build infrastructure necessary for 2022 World Cup”, July 2013. Qatar will be the first Arab country, and the first country of the Middle East, to host the World Cup.

http://sports.yahoo.com/blogs/soccer-dirty-tackle/qatar-reportedly-spending-200-billion-build-infrastructure-necessary-183809206.html

Many people believe that what determines the political influence of a country abroad is its military potency. They are very wrong. European socialists do not care about whether Qatar or Iran has a stronger army. What they care about is who is going to invest more in their country and who is going to pay them more. And the champion in foreign investments is Qatar. Qatar has only 300.000 Qatari citizens to support, since the rest of the population are foreigners who simply work there. Moreover Qatar hosts the largest American military bases in the Middle East, and it does not have to worry too much about its defence. Therefore Qatar has plenty of cash to buy socialists in foreign parliaments and Jihadists in the battlefields.

Therefore the three main blocks of the Middle East today, are Saudi Arabia, Iran and Qatar, instead of Saudi Arabia, Iran and Iraq that used to be the case until 2003. As I already said the relations between the countries of the Persian Gulf are very simple. They are competing with each other about who is going to sell more oil and natural gas. The rich in oil and natural gas countries also compete for influence in the neighbouring countries, not only to sell their oil and natural gas there, but also to use them to construct their pipeline networks.

All these countries want to sell their oil and natural gas to Europe and Asia. Africa is a poor client and it also has its own resources. The Gulf countries are currently selling more oil and gas to the Asian countries, because the Europeans import mainly from Russia. As you can see in the following map, Iran has a great geographical advantage over Saudi Arabia, Qatar and the United Arab Emirates.

Image 38

Map of Iran-Iraq Pipeline and TAPI Pipeline

Syria, Iraq and Lebanon belong to the Iranian sphere of influence, and therefore Iran can construct the Iran-Iraq-Syria pipeline, sending natural gas and oil to the Mediterranean Sea and Europe, avoiding Red Sea and the Straits that increase transport costs. Moreover Iran can send natural gas and oil to Europe through Turkey with pipeline networks. Finally Iran can send natural gas and oil to China through Pakistan and India.

Saudi Arabia, the UAE and Qatar do not have these options, and they can only sell to these regions by using the sea lanes. As long as Iran is in bad terms with the West, this is not a very big problem, because many countries cannot buy from Iran. Moreover the Western oil and natural gas multinationals are not allowed to invest in Iran. Therefore the Iranian production is low, and Iran is also excluded from many markets.

But now all this is changing because Iran is in a process of normalizing its relations with the West, because the US and the EU want to send Iranian oil and natural gas to Europe in order to reduce the Russian influence. This is very dangerous for all Arab countries, but the situation is a bit better for Qatar, since Qatar and Iran can jointly exploit the South Pars/North Field and send its gas to Europe and Asia.

It must also be taken into account how the countries of the Middle East behaved during the Arab Spring. To a large extent, the Arab Spring was financed by Qatar. The major protagonist of the Arab Spring was the Muslim Brotherhood. The Muslim Brotherhood is an organization of Islamists that has supporters in all countries of the Middle East and North Africa, and its main financial supporter is Qatar, while Turkey is its main adviser in military issues.

The Arab Spring and the Muslim Brotherhood attacked the national socialist dictators of the Middle East and North Africa, that were either pro-Russian, as was the case with Qaddafi in Libya and Assad in Syria, or that were controlled by Saudi Arabia as was the case with Mubarak in Egypt. As you can read in the following Times article, titled “Saudis told Obama not to humiliate Mubarak”, February 2011, the Saudis asked Obama to support Mubarak. I do not think that Obama paid much attention to the Saudis’ request.

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Saudi Arabia has threatened to prop up President Mubarak if the White House tries to force a swift change of regime in Egypt.

In a testy personal telephone call on January 29, King Abdullah told President Obama not to humiliate Mr Mubarak and warned that he would step in to bankroll Egypt if the US withdrew its aid programme, worth $1.5 billion annually.

http://www.thetimes.co.uk/tto/news/world/middleeast/article2905628.ece

Islamists and national socialists have many years of clashes in these countries. During the Arab Spring, the Islamists, with Qatari funding, Turkish military training, American tolerance, and the pretext of elections, managed to cause major problems to the local dictators. I refer to the issue of elections as a “pretext”, because it was not about a true democratic reform. Hamas, the Brotherhood’s subsidiary in Gaza, won with Qatari funding the elections in 2006 but never organized elections again. Similarly, the Brotherhood’s candidate in Egypt, Mohamed Morsi, won with Qatari funding the elections in 2012, and then gave himself powers that put him above the country’s judicial system.

The same is true in Turkey, where the Islamists Erdogan and Davutoglu, the Turkish President and Prime Minister, two supporters of the Muslim Brotherhood, are gradually reducing whatever rights and freedoms Turkish people enjoyed under the national socialist regime that existed before Erdogan came to power in 2003.

Even though the Arab Spring made a good start for Qatar and Turkey, it finally went sour. In Libya, even though the pro-Russian dictator Qaddafi was overthrown, the Muslim Brotherhood did not manage to take control of the whole country. In Egypt, even though the Brotherhood’s candidate Mohamed Morsi managed to defeat the Saudi controlled dictator Hosni Mibarak, he was later overturn by General Sisi, who was heavily funded by Saudi Arabia and the United Arab Emirates.

In Syria, Assad is still in power, controlling a part of the country, even though in the beginning it looked like the pro-Russian dictator was going to be overturned. Even though the Americans initially were very enthusiastic about overturning Assad, in the process they have not supported the rebels as much as Qatar, Turkey and Saudi Arabia had hoped for, because they are trying to normalize their relations with Iran, a major ally of Assad. Moreover the Russians really stood for Assad, and some European countries did the same thing, so it was difficult for the Americans to overturn Assad anyway.

Moreover the Arab Spring created a major internal conflict in the Arab world, since Qatar was the only Arab country that supported the Muslim Brotherhood, together with Iran and Turkey. As you can read in the following BBC article, tilted “Gulf ambassadors pulled from Qatar over interference”, March 2014, Saudi Arabia, United Arab Emirates and Bahrain pulled their ambassadors from Qatar.

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Saudi Arabia, Bahrain and the UAE have withdrawn their ambassadors from Qatar after alleging that it has been meddling in their internal affairs.

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Oil- and gas-rich Qatar has been an increasingly vocal diplomatic player. It strongly supported Egypt’s now-ousted Islamist President Mohammed Morsi and is a key backer of Islamist rebel groups in Syria.

The state is home to the influential al-Jazeera news network, which broadcasts across the world and has been critical of Saudi Arabia and other Gulf states.

Anti-Saudi programmes broadcast by al-Jazeera were thought to have been a major reason for Riyadh’s decision to withdraw its ambassador to Qatar from 2002 until 2008.

http://www.bbc.com/news/world-middle-east-26447914

In the following CNN article, titled “Muslim Brotherhood leader: Qatar asked us to leave”, September 2014, you can read that Qatar had to finally ask the Muslim Brotherhood leaders to leave the country, in order to normalize its relations with the other Arab countries.

http://www.cnn.com/2014/09/14/world/meast/muslim-brotherhood-qatar/

The Muslim Brotherhood members that were expelled from Qatar, found refuge in Turkey, as you can read in the following New York Times article, titled “Turkey Open to Bids for Refuge by Muslim Brotherhood Exiles”, September 2014.

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President Recep Tayyip Erdogan of Turkey said on Monday that several exiled leaders of Egypt’s Muslim Brotherhood who fled to Qatarbut lately have come under pressure to leave that Persian Gulf monarchy could perhaps find a new refuge in his country.

http://www.nytimes.com/2014/09/16/world/europe/turkey-open-to-bids-for-refuge-by-muslim-brotherhood-exiles.html

Another good article about the Arab Spring is the Financial Times’ “Fall of Egypt’s Mohamed Morsi is blow to Qatari leadership”, June 2013. You can read that Qatar gave Egypt 8 billion dollars, in order to support the Muslim Brotherhood’s candidate, Mohamed Morsi, and that his overturn was a major blow to Qatar.

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Qatar has poured $8bn of financial support into Egypt, and has been the main Gulf backer of Mr Morsi’s government even if it began its support before he took over.

http://www.ft.com/intl/cms/s/0/af5d068a-e3ef-11e2-b35b-00144feabdc0.html

In the following Telegraph article, titled “Saudi and UAE ready $20bn boost for Egypt’s El-Sisi”, June 2014, you will read that Saudi Arabia and United Arab Emirates were ready to finance with 20 billion dollars General Sisi, the man who overturn the Brotherhood’s Mohamed Morsi.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10868522/Saudi-and-UAE-ready-20bn-boost-for-Egypts-El-Sisi.html

At the following RT (Russia Today) aritcle, a news agency funded by the Russian government, titled “Arab spring: Western-backed exported Islamist revolution”, January 2012, you will read that the Arab Spring was funded by Qatar and Saudi Arabia, and it was backed by the West, in order to establish pro-Western Islamist governments in the Middle East and Northern Africa. The article mentions both Saudi Arabia and Qatar, because both Saudi Arabia and Qatar attacked the pro-Russian dictators Qaddafi and Assad, even though they funded different rebel groups.

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The string of uprisings in the Arab world boils down to Saudi Arabia and Qatar using money and influence to hijack public dissent and bring Sunni Islamists to power, says John R. Bradley, British author and expert on the Middle East.

http://rt.com/news/arab-spring-islamist-revolution-723/

At the following Reuters article, titled “Saudi Arabia is playing chicken with its oil”, December 2014, you will read that while Saudi Arabia and Qatar are funding the rebels in Syria, the Iranians and the Russians are arming Assad in order to keep him in power. The article also says that through its late oil war, Saudi Arabia wants to squeeze the American companies that produce shale oil, but also to squeeze Russia and Iran, in order to make it harder for them to support the Syrian dictator, Bassar al Assad.

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While Saudi Arabia and Qatar have been arming many of the Syrian rebels, the Iranian regime—and to a lesser extent, Russia—have provided the weapons and funding to keep Assad in power.

The kingdom has two targets in its latest oil war: it is trying to squeeze U.S. shale oil—which requires higher prices to remain competitive with conventional production—out of the market. More broadly, the Saudis are also punishing two rivals, Russia and Iran, for their support of Bashar al-Assad’s regime in the Syrian civil war. Since the Syrian uprising began in 2011, regional and world powers have played out a series of proxy battles there.

The conflict is now a full-blown proxy war between Iran and Saudi Arabia, which is playing  out across the region. Both sides increasingly see their rivalry as a winner-take-all conflict: if the Shi’ite Hezbollah gains an upper hand in Lebanon, then the Sunnis of Lebanon—and by extension, their Saudi patrons—lose a round to Iran. If a Shi’ite-led government solidifies its control of Iraq, then Iran will have won another round.

http://blogs.reuters.com/great-debate/2014/12/15/saudi-arabia-is-playing-chicken-with-its-oil/

A very good article about why the Saudis are keeping oil prices down is “Why Saudis Decided Not to Prop Up Oil”, December 2014, by Wall Street Journal.

http://www.wsj.com/articles/why-saudis-decided-not-to-prop-up-oil-1419219182

 Another alliance in the Middle East that is very important is the one between Saudi Arabia and Israel. Israel and Saudi Arabia are deeply hurt by the West rapprochement with Iran. Iran is the deadliest enemy for both countries. Israel has a much stronger air force than Iran, and Iran has a much stronger navy than Israel. As long as Israel and Turkey were allies, Israel could use Turkey in order to attack Iran with its superior air force. But Turkey is now one of Israel’s toughest enemies, and the Israelis can no longer use Turkey in order to reach Iran. However Israel could attack Iran through Saudi Arabia, as you can see in the following map.

Image 39

Map of Israel

Actually Saudi Arabia is the only possible route for Israel, since Syria and Iraq belong to the Iranian sphere of influence, and Turkey is a very hostile to Israel country. As you can read in the following RT (Russia Today) article, titled “Israel working with Saudi Arabia on Iran’s nuclear contingency plan”, November 2013, the Saudis would be willing to help Israel attack the Iranian nuclear facilities.

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It was also revealed that the Saudis were willing to assist an Israeli attack by cooperating with the use of drones, rescue helicopters, and tanker planes. “Once the Geneva agreement is signed, the military option will be back on the table. The Saudis are furious and are willing to give Israel all the help it needs,”an unnamed diplomatic source told the paper.

http://rt.com/news/israel-saudi-iran-nuclear-846/

Keep in mind that Jordan, which lies between Israel and Saudi Arabia, is a Saudi ally, and is not in the sphere of influence of Iran or Qatar. Qatar tried to take control of Jordan by supporting the Muslim Brotherhood, but the Brotherhood leader in Jordan was finally arrested, as you can read in the following New York Times article, titled “Brotherhood Leader’s Arrest in Jordan Is Seen as Warning From Monarchy”, December 2014, the Brotherhood leader in Jordan was arrested.

http://www.nytimes.com/2014/12/08/world/brotherhood-leaders-arrest-in-jordan-is-seen-as-warning-from-monarchy.html?_r=0

Moreover, if the Iran-Iraq-Syria pipeline is ever built, in order to carry Iranian and Iraqi oil to the Mediterranean Sea, the Saudis could use a pipeline that would run from Saudi Arabia to Israel through Jordan, in order to sell their own oil to the Mediterranean Sea too (see the following map). For the Saudis the good thing about the Israelis is that they will never be under Iranian influence.

Image 40

Saudi Arabia and Israel Alliance

As you can read in the following i24news article, titled “As oil prices dive, Saudi Arabia looks to Israel for new market”, December 2014, the Saudis are thinking about selling oil to Israel. If they finally decide to sell oil to Israel, what would stop them from using Israel to export their oil too? Note that i24news is a 24 hour Israeli TV network that broadcasts in three languages. I have to say that the Saudis have never recognized Israel as a country until now, and all these cannot happen tomorrow. But the geopolitical shifts in the Middle East are huge, and things are changing very quickly.

http://www.i24news.tv/en/news/international/middle-east/53031-141201-as-oil-prices-dive-saudi-arabia-looks-to-israel-for-new-market

I must say that neither Israel nor Saudi Arabia is afraid that the Americans will turn against them. They are afraid that by normalizing their relations with Iran, the Americans will adopt a more neutral stance and therefore Israel and Saudi Arabia will not enjoy the same level of protection that they used to.

Another big problem for the Israelis is that if the West’s economic sanctions against Iran are dropped, the big Western oil multinationals will be able to invest in the Iranian energy sector, and this will dramatically increase the Iranian production and revenues. Therefore the Iranians will be able to buy and develop better arms, and also supply Hamas in Gaza and Hezbollah in Lebanon with more and better guns.

For the Israelis it is a big deal to make an alliance with Saudi Arabia against Iran, otherwise they cannot reach the Iranian borders. On the contrary, Iran can reach Israel through Syria, a major Iranian ally, but also through Lebanon, since Hezbollah, the terrorist organization that runs Lebanon, is an Iranian subsidiary. Moreover Iran has very good relations with Hamas, the terrorist organization that controls Gaza and is mainly funded by Qatar. Therefore Iran can reach Israel through Syria, Lebanon and Gaza, while the only possibility for the Israelis to reach Iran is through Saudi Arabia.

Image 41

Map of Israel

As you can read in the following article of USA Today, titled “Two powers, Qatar and Iran, try to sway Hamas”, November 2012, Qatar and Iran were competing about who was going to control Hamas. Iran was supplying Hamas with rockets and Qatar with money. In the end Hamas became a Qatari subsidiary, but it was also in very good terms with Iran, until the moment Hamas supported the rebels that were fighting Assad in Syria.

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The courtship of Hamas between rivals Iran and Qatar has been one of the Middle East’s intriguing subplots of the Arab Spring. The bloodshed in Gaza has now sharpened their competition for influence with the Palestinian militant group and the direction it takes in the future.

Qatar has sought to use its vast wealth to win over Hamas with investments and humanitarian aid and encouraging Arab partners to do the same — part of the hyper-rich U.S. allied nation’s broader campaign to bring under its wing Islamist movements that have risen to power in the region the past two years. Qatar’s influence with Hamas could edge it away from armed action toward diplomacy.

Iran, meanwhile, is invigorating its longtime role as the builder of the rocket arsenal for Hamas’ military wing.

http://www.usatoday.com/story/news/world/2012/11/23/qatar-iran-hamas/1723165/

Foreign and Regional Powers in the Middle East

The last geopolitical axis that must be taken into account is the interaction between the great powers and the regional players. The Russians want to block the connection of the Middle East to Europe, and they can do so in two ways. The first one is by blocking pipelines not controlled by the Russian government, and the second one is by controlling the pipelines that send oil and natural gas from the Middle East to Europe, in order to control supply and prices.

An example of a pipeline that was blocked by the Russians was the Qatar-Turkey pipeline, which would carry Qatari natural gas to Europe through Turkey, following the route Qatar – Saudi Arabia – Iraq – Syria -Turkey or Qatar – Kuwait – Iraq – Syria – Turkey (see following map).

Image 42

Map of Qatar Turkey Pipeline

At the following Guardian article, titled “Syria intervention plan fuelled by oil interests, not chemical weapon concern”, August 2013, you can read that the Syrian dictator Assad refused to allow the Qatar-Turkey pipeline to pass through Syria, because as he said it would hurt the Russian interests in Europe.

17th Paragraph

These strategic concerns, motivated by fear of expanding Iranian influence, impacted Syria primarily in relation to pipeline geopolitics. In 2009 – the same year former French foreign minister Dumas alleges the British began planning operations in Syria – Assad refused to sign a proposed agreement with Qatar that would run a pipeline from the latter’s North field, contiguous with Iran’s South Pars field, through Saudi Arabia, Jordan, Syria and on to Turkey, with a view to supply European markets – albeit crucially bypassing Russia. Assad’s rationale was “to protect the interests of [his] Russian ally, which is Europe’s top supplier of natural gas.”

http://www.theguardian.com/environment/earth-insight/2013/aug/30/syria-chemical-attack-war-intervention-oil-gas-energy-pipelines

 An example where the Russians tried to take control of a pipeline themselves was the Iran-Iraq-Syria pipeline. As you can read at the following CNBC article, titled “How Vladimir Putin and Russia Hope to Win Big in Syria, February 2013, Gazprom would construct and manage the Iran-Iraq-Syria pipeline. CNBC is one of the largest American TV networks, and this article has a great analysis of the cold war between Russia and United States in the Middle East and North Africa, and I suggest that you read the whole thing.

2nd, 3rd, 4th, 5th Paragraphs

The Soviet Union acquired the Tardus Naval Port in Syria in 1971 without any real purpose for it. With their ships welcomed in Algeria, Cuba or Vietnam, Tardus was too insignificant to be developed. After the collapse of the Soviet Union, Russia lacked the funds to spend on the base and no reason to invest in it.

The Russian return to the Middle East brought them first to where the Soviet Union had had its closest ties. Libya had been a major buyer of arms and many of the military officers had studied in the Soviet Union. Russia was no longer a global power, but it could be used by the Libyans as a counter force to block domination by the United States and Europeans.

When Gaddafi fell, Tardus became Russia’s only presence in the region. That and the discovery of vast gas deposits just offshore have transformed the once insignificant port into a strategic necessity.

Earlier at the United Nations, Russia had failed to realize that Security Council Resolution 1973 that was to implement a new policy of “responsibility to protect” cloaked a hidden agenda. It was to be turned from a no-fly zone into a free-fire zone for NATO. That strategic blunder of not vetoing the resolution led to the destruction of Gaddafi’s regime and cost Russia construction contracts and its investments in Libyan gas and oil to the tune of 10 billion dollars.

8th and 9th Paragraphs

“What Russia lost through the anti-Al-Assad alliance was the possibility to control the natural gas market across Europe and the means to shape events on the continent. In July 2011, Iran, Iraq, and Syria agreed to build a gas pipeline from the South Pars gas field in Iran to Lebanon and across the Mediterranean to Europe. The pipeline that would have been managed by Gazprom would have carried 110 million cubic meters of gas. About a quarter of the gas would be consumed by the transit countries, leaving seventy or so million cubic meters to be sold to Europe”.

Violence in Iraq and the Syrian civil war has ended any hope that the pipeline will be built, but not all hope is lost. 

http://www.cnbc.com/id/100496808#

For the Qatar-Turkey and the Iran-Iraq-Syria pipelines, you can also read the article of the Russian news agency RT (Russia Today), titled “Energy ballet-2: Syria, Ukraine & Pipelineistan”, August 2014. You can read in the article that the Emir of Qatar visited Syria in 2009, in order to convince Assad to allow the Qatar-Turkey pipeline to pass through Syria, but Assad refused, because the pipeline would hurt Russian and Syrian interests. Moreover the article says that the Iran-Iraq-Syria pipeline had already been agreed.

3rd, 4th, 5th Paragraphs

The Obama administration’s Syria master plan was ‘Assad must go’; regime change would yield a US-supported Muslim Brotherhood entity, and a key plank of Pipelineistan – the $10 billion Iran-Iraq-Syriagas pipeline – would be forever ditched.

The Emir of Qatar himself had taken the road to Damascus in 2009 to negotiate a Qatar-Syria-Turkey gas pipeline. Bashar al-Assad though, said no; his excuse was his unwillingness to jeopardize Syria’s energy deals with Russia.

And yet, in 2001, an agreement went ahead for a rival Iran-Iraq-Syria project. So the writing was on the wall – or on the (steel) pipes arriving one day in the Eastern Mediterranean. The gas for prospective European customers would in fact come from Iran’s South Pars field, contiguous to Qatar’s North Dome; together, they form the largest gas field on the planet.

 7th Paragraphs

Thus the key economic rationale for the whole ‘Assad must go’ disaster; a war OF terror largely financed by Qatar and Saudi Arabia, with logistical support from Turkey, with Ankara, the CIA and the GCC (Gulf Cooperation Council) gang running a ‘secret’ weaponizing airlift of so-called ‘good’ jihadists using Saudi, Qatari and Jordanian military cargo planes since 2012.

23rd Paragraphs

Nabucco’s idea was to bring gas to the EU via Turkey, Bulgaria, Romania, Hungary and Austria. Bur where from? Turkmenistan and Kazakhstan were finally ruled out. It could be Azerbaijani gas, but that requires a fortune in extra investment. The Iraqi industry won’t be ready anytime soon. And Iran will be finally in play only if a nuclear deal is clinched till the end of 2014, and sanctions lifted in 2015 (all this a major ‘if’).

http://rt.com/op-edge/182816-energy-wars-ukraine-syria/

Now let’s turn to the Americans. The Americans want to connect Middle East to Europe through Turkey, in order to reduce Russian influence in Europe. This can be done if the Jihadists of Qatar and Turkey win in Syria and Iraq, so that the Qatar-Turkey pipeline can be built, or if the Iraqi Kurds send natural gas and oil to Europe through Turkey, or finally if the Americans manage to reach an agreement with Iran, which I think would be the most convenient way for the Americans to supply Europe with natural gas and oil. They could also use a combination of all the above.

The Arab Spring was very convenient for the Americans, because it would bring to power in the countries of the Middle East and North Africa Islamist leaders controlled by their allies, Qatar and Turkey, and therefore the Russians would not be able to control the pipelines connecting Middle East and North Africa to Europe.

Finally China is trying to ensure its energy security by investing billions of dollars in all countries of the Middle East. China has heavily invested in Saudi Arabia, Iran, Qatar, Iraq and United Arab Emirates. However the traditional ally of China in the Middle East is Iran, because Iran has been a traditional American enemy. It is Saudi Arabia, United Arab Emirates and Qatar that are under pressure, in order to convince China to move away from Iran and towards them, because they all desperately need to sell oil and natural gas to China.

What I am going to say now is irrelevant to the subject but it is important in order to combat socialist propaganda. According to socialist propaganda, the Arab countries do not have an independent foreign policy, and they do as they are told by the Americans. You should examine the foreign policy of the Arabs in relation to China, which is a geopolitical rival of the US, but a great customer for the Arabs, and not the Arab foreign policy in relation to Russia, which is a geopolitical rival of the US, but a great competitor of the Arabs too. At the following pie charts you can see the best clients of Saudi Arabia.

Image 43

Saudi Arabia's Export by Country

http://www.eia.gov/countries/cab.cfm?fips=SA

Therefore whenever a socialist tells you that the Arab countries do as they are told by the Americans, you should talk to him about the Arab foreign policy towards China, which is a rival for the US and a customer for the Arabs, and also explain to him that when it comes to Russia, the Arab countries are behind the Americans because Russia is a great competitor for them in the oil and natural gas markets. I say so because above all this booklet aims in combating Communist and Nazi propaganda, and the only way this can be done is by explaining to the people what is really going on.

The way Saudi Arabia and Iran are approaching the US and China is actually very interesting. The Saudis are mainly selling to Asia, and therefore they want to turn away from the US. The US is no longer their best customer, and the Americans are not even willing to intervene in the Saudi-Iranian conflicts in the same way they used to do in the past, because they want to normalize their relations with the Iranians. Therefore the Saudis want to turn towards the best client, which is China. For the Saudis China would be the perfect customer and patron.

The problem for the Saudis is that even though China has invested billions in Saudi Arabia, she has much stronger ties with Iran than she has with Saudi Arabia. Therefore it is not easy for Saudi Arabia to completely abandon the US and turn to China. At the following analysis of the Wilson Centre, one of the major American think tanks, titled “Iran’s Rouhani Puts U.S.- Saudi Ties to the Test”, October 2013, you can read that two former Saudi foreign ministers, Prince Bandar bin Sultan and Turki al-Faisal, said that whether the Saudis like it or not, they cannot abandon the Americans completely. As I just said the problem for the Saudis is that China has stronger bonds with Iran than Saudi Arabia, and Russia, the other big player, is a major competitor of Saudi Arabia in the oil markets. Moreover the Americans are still buying Saudi oil.

5th Paragraph

In fact, the Saudi view of the U.S. track record in the Middle East since President George W.Bush’s “freedom agenda” to promote democracy and then his 2003 decision to invade Iraq amounts to a long indictment of American missteps and misjudgments for which Saudi Arabia has paid the cost and Iran collected the dividends. The U.S. invasion of Iraq resulted, in the words of Saudi Foreign Minister Saud al-Faisal, in a pro-Iranian Shiite government that “handed Iraq to Iran on a silver platter.”

 7th and 8th Paragraphs

Then came the 2011 “Arab Spring” in the name of democracy, which the Obama administration tried awkwardly to embrace along with the Muslim Brotherhood and similar Islamic groups that won elections in Egypt, Tunisia, and Morocco. Worst yet, it touched off unresolved civil wars in Yemen and Syria. The Saudis have never forgotten, or forgiven, that the Brotherhood backed Iraqi President Saddam Hussein during the 1990-91 Gulf War after the Saudis had offered thousands of Brotherhood members a place of refuge from persecution in Egypt and Syria.

The bitter Syrian civil war has become the latest bone of contention in the fraying U.S.-Saudi relationship. Since Iran and its Lebanese ally, Hezbollah, are backing Syrian President Bashar alAssad and Saudi Arabia is backing his overthrow, Syria has become another test of American fidelity

 12th and 13th Paragraphs

The problem now for Saudi Arabia is how to protect itself from the fallout of a U.S.-Iranian thaw and possible long-term rapprochement. In the mid-2000s, King Abdullah sought to diversify the kingdom’s foreign friends away from Washington, taking his first trip abroad as king to China in January 2006. The Chinese had provided Saudi Arabia with medium-range DF-3 missiles, capable even of carrying nuclear warhead to protect it from Iran in the late 1980s. The IHS Jane’s Intelligence Review reported in July 2013 that China has sent more missiles and helped the Saudis built a second launching site with its Chinese missiles aimed at both Iran and Israel.

The Saudis know, however, that China is no substitute for the United States when it comes to ability, or political readiness, to project military power in the Middle East. So, the kingdom is in the process of purchasing $60 billion worth of all kinds of U.S. weaponry, including 84 more F-15s and an updated missile defense system. This has locked Saudi Arabia into the American security umbrella for decades to come.

 15th and 16th Paragraphs

Two former American-educated Saudi ambassadors to Washington, Princes Bandar bin Sultan and Turki al-Faisal, both came to the same conclusion after decades of dealing with Saudi foreign policy: like it or not, “the only game in town” for the Saudis was the United States. Whether this attitude will survive a U.S.-Iranian opening remains to be seen. The Saudi leadership has become used to coping with serious differences with Washington over the years. Its strategy has been to isolate and prevent them from upending the overall close security relationship.

http://www.wilsoncenter.org/sites/default/files/iran_rouhani_puts_us_saudi_ties_test_ottaway.pdf

On the other side, Iran wants to sell its oil and natural gas to Europe, which is the best client, but it is afraid that this might cause problems to its relations with China and Russia. And maybe destroying its alliance with Russia is not a big deal for Iran, but it is when it comes to China, because China is a major buyer of Iranian oil.

Qatar is trying to lure China too. As you can read in the 4th paragraph of the following Al Arabiya article, titled “Qatar looks East: Growing importance of China’s LNG market”, November 2014, China is Qatar’s fourth largest client, following Japan, India, and South Korea. In the 8th paragraph of the following article you can read that when it comes to liquefied natural gas, Qatar is the world’s largest exporter. That is if natural gas sold by pipelines is not taken into account. When all natural gas sales are taken into account, Russia is the world’s largest exporter.

http://english.alarabiya.net/en/views/business/2014/11/24/Qatar-looks-East-Growing-importance-of-China-s-LNG-market.html

At the following Reuters article, titled “Qatar to become first Middle East clearing hub for China’s yuan”, November 2014, you will read that China created in Qatar her first hub for clearing transactions in Chinese Yuan, in order to reduce her dependency on the dollar.

1st, 2nd and 3rd Paragraphs

“Qatar will become the Middle East’s first hub for clearing transactions in the Chinese yuan, in a step that could over the long run help Gulf oil exporting countries reduce their dependence on the U.S. dollar.

Industrial and Commercial Bank of China’s Doha branch has been appointed as the clearing bank for yuan deals in Qatar, China’s central bank said on Tuesday.

“The signing of the MoU and the appointment of the renminbi clearing bank will increase the strong ties between China and Qatar and position Qatar as the regional centre for renminbi clearing and settlement,” the Qatari central bank said”.

11th Paragraph

Qatar, which has some $43 billion in net foreign currency reserves and an estimated $170 billion in its sovereign wealth fund, is the biggest supplier of liquefied natural gas to China.

http://www.reuters.com/article/2014/11/04/china-offshore-yuan-idUSL4N0SU3KV20141104

At the following Reuters article, titled “China’s CNPC, Qatar Petroleum planning JV in China”, January 2011, you can read about the joint investments that the state owned China National Petroleum Corporation CNPC, and the state owned Qatar Petroleum are planning in Qatar and China.

1st, 2nd and 3rd Paragraph

China and Qatar will strengthen cooperation in the oil and gas industries and the top oil companies of the two countries plan joint venture projects in China, the government said on Thursday.

During a meeting between visiting Qatar Oil Minister Abdullah al-Attiyah and Wang Yong, the head of state-owned Assets Supervision and Administration Commission (SASAC), the two sides vowed more communication and joint development.

“Both sides talked about planned joint venture projects in China between China National Petroleum Corp (CNPC) and Qatar Petroleum (QP),” the SASAC said on its website http://www.sasac.gov.cn.

http://in.reuters.com/article/2011/01/13/china-energy-qatar-idINTOE70C06920110113

However Qatar would not want to see the American army leaving the country, because that would make Qatar very vulnerable to Saudi Arabia and Iran. Qatar would stop being an independent player if it stopped hosting the American military bases. When it comes to buying political power abroad Qatar is the number one country, but in military terms Qatar is very weak when compared to the Saudis and the Iranians. It is one thing to buy socialists in foreign parliaments, and another to face the Saudi and the Iranian armies. The first one requires money and the second one requires guns.

The Wrong Explanations of the Wars in the Middle East

All the wars in the Middle East are about oil and natural gas. Divisions between Sunni and Shia Muslims, Muslims and Jews, Arabs and Jews, Islamists and secularists, Arabs and Persians (Iranians), and so on, are of only secondary importance to these wars, and I want to give some examples to demonstrate that this is so.

The first example is the Kurdish people who are both Sunni and Shia Muslims, but they are united because they consider their Kurdish identity as more important than their religious identity.

The second example is that Erdogan’s Sunni Turkey had very good relations with Syria, which is governed by Assad, an Allawite Muslim, until Assad agreed with Iran and Iraq to construct the Iran-Iraq-Syria pipeline. From that moment on Erdogan started treating Assad as a great enemy, constantly pressing for his overturn. Allawites are an off shoot of Shia Islam. However this did not bother and did not stop Erdogan from having very good relations with Assad, until the latter agreed to the construction of the Iran-Iraq-Syria Pipeline, which would bypass Turkey as an energy hub.

The third example is the Iraqi elections of 2010. In these elections, Saudi Arabia, which is a predominantly Sunni and a theocratic country, supported Ayad Allawi, a Shia Muslim and a secular nationalist. The Sunni Saudis, decided to support a secular Shia Muslim, in a country that has a Sunni population of around 35%. They did so because the majority of the population in Iraq are Shia Muslims, and they thought they had better chances to gain influence in Iraq by supporting a Shia candidate. Moreover Ayad Allawi was not in good terms with Iran, and Iraq would not fall in the Iranian sphere of influence if he was to become the next president. However he did not win the elections.

The fourth example is Iran, Qatar and Hamas. The Iranians, who are Shia Muslims, had very good relations with Hamas, the Sunni terrorist organisation that controls Gaza, which is mainly funded by Sunni Qatar. Even though Sunni Qatar and Shia Iran disagree on many issues, they are both very rich in natural gas, and they are united against Israel which started selling natural gas, harming the interests of both Qatar and Iran. At the following map you can see how Qatar and Iran, that are both very rich in natural gas, can cooperate in order to attack Israel, Qatar by using Hamas, its subsidiary in Gaza, and Iran by using Hezbollah, its subsidiary in Lebanon.

Image 44

Map of Gaza

Qatar and Turkey are the main allies of Hamas, as you can read in the following Time article, titled “Hamas Still Has Some Friends Left”, July 2014:

4th Paragraph

Hamas has two clear allies, according to Middle East experts: Qatar and Turkey. Both have given Hamas their public support and financial assistance estimated to be in the hundreds of millions of dollars.

http://time.com/3033681/hamas-gaza-palestine-israel-egypt/

For Iran and Hezbollah you can read the following BBC article, titled “Who are Hezbollah”, July 2010

1st, 2nd Paragraphs

Hezbollah – or the Party of God – is a powerful political and military organisation in Lebanon made up mainly of Shia Muslims.

It emerged with financial backing from Iran in the early 1980s and began a struggle to drive Israeli troops from Lebanon.

23rd Paragraphs

The party was long supported by Iran, which provided it with arms and money.

http://news.bbc.co.uk/2/hi/middle_east/4314423.stm

The fifth example is Sunni Saudi Arabia and the Sunni organization of Muslim Brotherhood. Saudi Arabia recently designated the Muslim Brotherhood as a terrorist organisation as you can read in the following Reuters article, titled “Saudi Arabia designates Muslim Brotherhood terrorist group”, March 2014

http://www.reuters.com/article/2014/03/07/us-saudi-security-idUSBREA260SM20140307

However in the past, Saudi Arabia used to give shelter to the members of the Muslim Brotherhood that were exiled from their countries. But now that the Muslim Brotherhood is funded by Qatar and has good relations with Iran, and it went against Mubarak in Egypt, the Saudis designated it as a terrorist organization.

Moreover the Muslim Brotherhood accuses Saudi Arabia for its relations with the Americans, and at the same time the Brotherhood is mainly funded by Qatar, which hosts the largest American military bases in the Middle East.

The sixth example is the Gaza war of July 2014. Saudi Arabia, United Arab Emirates and Bahrain, which are all Sunni Muslim countries, blamed the Sunni Muslims of Hamas and not the Israeli Jews. The reason is that Hamas is a subsidiary of the Muslim Brotherhood and it also has strong ties with Iran. You can read the following New York Times article, titled “Arab Leaders, Viewing Hamas as Worse Than Israel, Stay Silent”, July 2014.

http://www.nytimes.com/2014/07/31/world/middleeast/fighting-political-islam-arab-states-find-themselves-allied-with-israel.html

Therefore Middle East wars are, and have always been, energy wars. That does not mean that the Sunnis love the Shias, or that the Arabs love the Jews, or that Islamists love secularists and so on. It simply means that Middle East countries do not go to painful and expensive wars for such reasons. They go to wars for oil and natural gas, and they do not hesitate to form alliances with groups of any nationality, religion or ideology in order to prevail in these energy wars. All countries of the Middle East use religion, nationality and ideology as tools, in order to prevail in the oil and natural gas wars. I want to give the example of Iran and Israel.

Iran has used the war against Israel in order to gain influence in the Sunni Arab world, at the expense of Saudi Arabia. Saudi Arabia was a US ally, and the Americans were protecting Israel. The Iranians are not even Arabs, they are Persians. They are also Shia Muslims in a Muslim world that is predominantly Sunni. Sunni Muslims are 85%-90% of all Muslims, as you can read at the following BBC article, titled “Sunnis and Shia in the Middle East”, December 2013.

3rd Paragraph

The majority of Muslims are Sunnis – estimates suggest the figure is somewhere between 85% and 90%.

http://www.bbc.com/news/world-middle-east-25434060

Therefore the Iranians had a great disadvantage over the Saudis, because they are Shia and Persians. By fighting Israel, the Iranian prestige in the Sunni Arab world was greatly enhanced at the expense of Saudi Arabia. If both the Iranians and the Saudis were in good terms with the Americans, and Israel was not blocking about 1/3 of their exit to the Mediterranean Sea, who would really care about Israel? As you can see on the following map, Israel is blocking a large part of the Saudi, Iraqi, Qatari and Iranian exit to the Mediterranean Sea.

Image 45

Map of Israel

If Israel was located where I have made the red circle on the above map, and both the Saudis and the Iranians were in good terms with the Americans nobody would care about Israel.

Another recent example about how the Muslims are using Israel to achieve their geopolitical goals is what the Turkish President Recep Erdogan did. Erdogan had very good relations with Israel, but as soon as the Israelis recognized the Cypriot exclusive economic zone, in order to jointly exploit their natural gas with the Cypriots, Erdogan has become one of Israel’s outspoken enemies.

Image 46

Map of Israeli Natural Gas Fields

After the Israelis recognized the Cypriot exclusive economic zone, Erdogan sent the Gaza Freedom Flotilla with Mavi Marmara, which caused the diplomatic relations between Israel and Turkey to collapse. By fighting Israel Erdogan became a hero in the Arab and Muslim world. Israel also put forward the issue of the East Med pipeline, a natural gas pipeline that would run from Israel to Europe, through Cyprus and Greece, bypassing Turkey as an energy hub.

Image 47

Map of East Med Pipeline

For the East Med pipeline you can read at the following Reuters article, titled “Greece, Cyprus and Israel to explain Med pipeline vision to EU”, December 2014.

http://www.reuters.com/article/2014/12/02/eastmed-natgas-europe-idUSL6N0TM47J20141202

You can also read the following Natural Gas Europe article, titled “EC Grants Conditional Support to East Med Pipeline”, December 2014

http://www.naturalgaseurope.com/ec-grants-conditional-support-east-mediterranean-pipeline?utm_source=Natural+Gas+Europe+Newsletter&utm_campaign=f7158b98b2-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_c95c702d4c-f7158b98b2-307785513

The problem for the Israelis is that after they decide to exploit their natural gas reserves, it is no longer only the US enemies that are attacking them, but also the US allies, as it is the case with Turkey and Qatar. In the past the US allies used to tolerate Israel, even if they didn’t like it. But now Israel is an economic rival for both Qatar and Turkey, and they use their organization in Gaza to attack it.

Moreover the Israelis are true economic competitors for the Iranians. In the past the Iranians simply used Israel to increase their appeal in the Sunni Arab world against Saudi Arabia. But now things are different. Israel is a true economic competitor for Iran. Maybe the Israeli gas reserves are peanuts when compared to the Iranian and Qatari ones, but the two deals that the Israelis singed with the Egyptians and the Jordanians involved 45 billion dollars, and that’s a lot of money.

For the natural gas agreement between Israel, Egypt and Jordan, see the following FT article, titled “Israel gas supply deals to Egypt and Jordan draw closer”, May 2014.

http://www.ft.com/intl/cms/s/0/02ea38aa-e0e2-11e3-a934-00144feabdc0.html?siteedition=intl

See also my essay “The Israel-Egypt-Jordan Natural Gas Agreement and the July 2014 War in Gaza”. Saudi Arabia is mainly concerned about oil and not about natural gas, and she could use Israel to sell her oil to the Mediterranean Sea, and she is much softer on Israel as I said.

A Reader’s Manual

This booklet should not be used as a tool to understand the Middle East, because everyday new alliances are formed, and new conflicts appear. As I write this document in December 2014, Qatar has declared its support to the Egyptian president Al-Sisi, in order to normalize its relations with the other Arab countries, as you can read at the following Yahoo article, titled “Qatar gives ‘full support’ to Sisi’s Egypt”, December 2014.

http://news.yahoo.com/qatar-gives-full-support-sisis-egypt-181059129.html

At the same time the Saudis have met with the Iranian Foreign Minister, in an effort to normalize the relations between the two countries, as you can read in the following article of the Times of Iran, titled “Saudi Arabia invites Zarif to come and talk peace”, December 2014.

http://iran-times.com/saudi-arabia-invites-zarif-to-come-and-talk-peace/

Maybe there are many other changes that I am not aware of. What I am trying to say is that alliances and conflicts in the Middle East change every day. What remains constant is oil and natural gas. Therefore what a person reading this booklet should keep in mind, is that the Middle East should always be examined under the prism of oil and natural gas. All other information is only important for someone who wants to become a specialist in the or an academic. For all of us who simply want to understand the wars in the Middle East, oil and natural gas will do the job.

Middle East or an academic. For all of us who simply want to understand the wars in the Middle East, oil and natural gas will do the job.

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The Crisis in the American-Turkish Relations and the Creation of an Independent Kurdistan

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Iakovos Alhadeff

Turkey and Syria

Turkey is one of NATO’s strongest members, and has for many years been a traditional US ally. However Turkey’s ambitious energy policy is putting this relationship to the test. Turkey is fighting with all its might, in order to become the absolute energy hub between the Middle East and Europe.

That was clear from the way Erdogan slammed Israel, a former ally, when Israel, together with Cyprus, started exploiting its natural gas reserves in the Mediterranean Sea, which could provide Europe with an alternative source of energy, which would bypass Turkey.

Turkey’s ambitions became even clearer when Erdogan became one of the most enthusiastic supporters of the overthrown of another former ally, the Syrian dictator Bashar al- Assad. Erdogan became one of the major enemies of the Assad regime, after the Syrian dictator agreed in 2011 for the construction of the Iran-Iraq-Syria pipeline, which would transfer Iranian natural gas and oil to the Mediterranean Sea, and which would bypass Turkey (see green line on the following map). The end of this pipeline would also be near the Turkish port of Ceyhan in the Mediterranean Sea, which is the end of the Baku-Ceyhan pipeline that brings Azeri oil to the Mediterranean Sea through Turkey.

Previously, in 2009, Assad had refused to allow the Qatar-Turkey pipeline, which would transfer Qatari gas to Europe through Turkey, to pass through Syrian territories, because as he said this would harm the interests of Russia and Gazprom. The truth is that the Qatar-Turkey pipeline would harm the interests of both Assad’s allies, i.e. the interests of both Russia and Iran.

In the following article of the Turkish Weekly, titled “Turkey and Qatar Agree to Build a Natural Gas Pipeline”, you can read that Qatar and Turkey agreed on 2009 to a Qatar-Turkey natural gas pipeline that would transfer Qatari natural gas to Europe. However they needed Syria.

http://www.turkishweekly.net/news/87212/turkey-and-qatar-agree-to-build-a-natural-gas-pipeline.html

In the 2nd line of the 5th paragraph before the end of the following Guardian article, titled “Syria intervention plan fueled by oil interests, not chemical weapon concern”, August 2013, you can read the following:

“In 2009 – the same year former French foreign minister Dumas alleges the British began planning operations in Syria – Assad refused to sign a proposed agreement with Qatar that would run a pipeline from the latter’s North field, contiguous with Iran’s South Pars field, through Saudi Arabia, Jordan, Syria and on to Turkey, with a view to supply European markets – albeit crucially bypassing Russia. Assad’s rationale was “to protect the interests of [his] Russian ally, which is Europe’s top supplier of natural gas”.

http://www.theguardian.com/environment/earth-insight/2013/aug/30/syria-chemical-attack-war-intervention-oil-gas-energy-pipelines

At the following article of Today’s Zaman, a Turkish newspaper, titled “Erdogan: Assad is a good friend, but he delayed reform efforts”, dated May 2011, you can read that in May 2011 the first strains in the Erdogan-Assad relationship had already appeared, but Erdogan was still calling Assad a friend.

http://www.todayszaman.com/diplomacy_erdogan-assad-is-a-good-friend-but-he-delayed-reform-efforts_243660.html

What Erdogan meant by ‘reforms’ in Syria, was for Assad to go to elections. What Erdogan meant by ‘reforms’ in Syria, was for Assad to go to elections. Note that Sunni Muslims account for about 65% of the Syrian population. Therefore if Bashar al-Assad, the Iranian ally, was to go to elections, it should be easier for Sunni Turkey and Sunni Qatar, than for Shiite Iran, to gain influence in Syria. Assad is an Alawi Muslim. Alawi Muslims are an off shot of Shiite Muslims. Note that Shiite Muslims are also called Shia Muslims. However at this point Erdogan had not openly asked for Assad to step down, and he was calling him a friend.

At the following Wall Street Journal article, titled “Iraq, Iran, Syria Sign $10 Billion Gas-Pipeline Deal”, June 2011, you can read about the Iranian-Iraqi-Syrian pipeline deal in June 2011, which infuriated Erdogan.

http://online.wsj.com/articles/SB10001424053111903591104576467631289250392

As you can read at the following Reuters article, titled “Turkish Prime Minister calls on Syria’s Assad to quit”, November 2011, a few months after the agreement for the Iran-Iraq-Syria pipeline was signed, Erdogan openly asked for Assad to step down.

http://www.reuters.com/article/2011/11/22/us-turkey-syria-idUSTRE7AL0WJ20111122

Of course Erdogan will never openly admit that his problem with the Assad regime is the Iran-Iraq-Syria and the Qatar-Turkey pipelines. He will pretend that their differences are based on human right violations in Syria, as it usually happens in the international arena. More specifically, Erdogan claims that Assad’s human right violations cause Syrian people to flee the country, and these people enter Turkey, and therefore Assad has to go, in order for these people to stop leaving Syria and entering Turkey.


Turkey and Iran

As it was expected, the Turkish attack on Assad, who had previously agreed on the Iranian pipeline project, infuriated the Iranians, since the Turkish attack on Assad was an attack on the Iran-Iraq-Syria pipeline too, and a support to the Qatar-Turkey pipeline. Iranians were so furious with Erdogan, that a few months later, in 2012, they rejected Constantinople (Istanbul), as the proposed venue for the nuclear talks between the great powers and Iran.

Given that it was Turkey and Brazil who had made huge efforts in the previous years, for an agreement between Iran and the West, over the Iranian nuclear program, the Iranians must have been extremely angry with Erdogan in order to reject Instabul as the proposed venue for the event, something that would be very prestigious for Erdogan’s role as an international mediator.

Obviously Erdogan was not trying to lift the sanctions against Iran due to his love for Iran. Instead, Erdogan wanted the sanctions lifted, so that the Iranians could send their natural gas to Europe through Turkey, something that cannot be done as long as there are economic sanctions against Iran. What Erdogan wants in return for his intermediation between Iran and the West, is that the Iranian energy passes through Turkey and not through Syria.

At the following Reuters article, titled “Turkey, Brazil seal deal on Iran nuclear fuel swap”, May 2010, you can read how Turkey and Brazil, as mediators between the West and Iran, almost cut a deal on behalf of Iran with the major world powers, over the Iranian nuclear program in 2010.

http://www.reuters.com/article/2010/05/16/us-iran-nuclear-deal-idUSTRE64F29P20100516

In the first and the second paragraphs of the following Bloomberg article, titled “Iran Officials Reject Istanbul as Talks Venue Over Syria”, April 2012, which is about the Iranian rejection of Instabul as the proposed venue for the international talks over the Iranian nuclear program due to Erdogan’s actions against Assad, you can read the following:

“Iranian officials say Turkey isn’t a suitable location for nuclear talks expected in mid-April as the neighbors clash over unrest in Syria, Iran’s ally.

“Given Turkey’s unprincipled policies, it isn’t beneficial for the upcoming negotiations between Iran and the 5+1 countries to be held in Istanbul,” said Alaeddin Boroujerdi, head of parliament’s national security and foreign policy committee. “Iranian lawmakers have many times said that negotiations need to take place in another spot and in a country that is a friend of Iran,” he told the Tehran-based Etemaad newspaper in a report published today”.

http://www.bloomberg.com/news/2012-04-05/iran-officials-reject-istanbul-as-talks-venue-amid-syria-discord.html

I have to say that the Turkish attack on Assad and the Iran-Iraq-Syria pipeline was not personal or irrational. It was simply a business decision. Erdgogan is doing everything he can to lure the Iranians to send their energy to Europe through Turkey. Erdogan follows a stick and carrot policy towards the Iranians.

In the 8th and 9th paragraph of the following BBC article, titled “Iran nuclear programme ‘solely civilian’ – Turkish Prime Minister”, dated March 2010, you can read the following:

“In an interview with the BBC’s Nik Gowing, Mr Erdogan said he believed it was Iran’s “most natural right” to develop a nuclear programme for civilian purposes.

It was, he added, “unfair” of nuclear-armed countries to “manipulate the facts” about Turkey’s neighbour while at the same time not telling Israel to dispose of its nuclear weapons”.

http://news.bbc.co.uk/2/hi/middle_east/8570842.stm

How could Erdogan do it better for the Iranians? He said that the Iranian nuclear program was not dangerous, and he blamed Israel. He couldn’t make it any sweeter for the Iranians. And yet in 2012 the Iranians rejected Istanbul as the venue for the international talks over the Iranian nuclear program, because the Iran-Iraq-Syria and the Qatar-Turkey pipelines are very important for the Iranians and the Iranian economy. For the Iran-Iraq-Syria pipeline see also Wikipedia at the following link.

http://en.wikipedia.org/wiki/Iran-Iraq-Syria_pipeline

One of the reasons that Turkey is so tough in its energy policy, and she is willing to even risk her friendship with the Americans for its shake, is that she is very poor in energy resources, and she has to import most of her energy. Turkey currently imports most of her energy from Russia.

However she is hoping that if Iran is dependent on Turkey, that is if Turkey is the shortest way through which Iran can send its oil and natural gas to Europe, Iran will be forced to offer discount energy prices to Turkey. The increase in Turkey’s geopolitical significance as the region’s only energy hub is obviously a very important factor too. As long as Assad, an Iranian ally, rules in Syria, Iran will have more bargaining power. And as I already said, the Iran-Iraq-Syria pipeline would be very close to the end of the Baku-Ceyhan pipeline, which would mean lower revenues for Turkey, and a decrease in her geopolitical significance.

Controlling Iraq and Syria is also very important for Iran, in order to block the Qatar-Turkey pipeline. Actually in case Iran reaches an agreement with the West, blocking the Qatar-Turkey pipeline will be more important than constructing the Iran-Iraq-Syria pipeline for the Iranians, since Iran will be able to send its energy to Europe through Turkey. At the end of the day every Middle East battle for an energy corridor has two purposes. The first one is to sell your own energy, and the second one is to block the sales of your competitors.

Which of the two is more important depends on the individual cases and it also depends on how things are going to evolve. For instance if Iran reaches an agreement with the West, controlling Syria and Iraq will be more important for the Iranians in order to block the Qatar-Turkey pipeline. If the Iranians do not reach an agreement with the West, controlling Syria and Iraq will be more important for the Iranians in order to construct the Iran-Iraq-Syria pipeline.

That’s the reason Turkey and Iran are in bad terms, since Turkey is fighting Iran’s major ally in Syria, and also Iran’s friends in Iraq, in order to block Iran’s exit to the Mediterranean Sea, and to open the corridor for the Qatar-Turkey pipeline. However at the same time the two countries are trying to have a working relationship, since Turkey needs the Iranian energy to pass through Turkey, for the reasons I already mentioned, and in order to decrease Turkish dependency on Russian energy, and Iran needs Turkey to send its natural gas to Europe through a pipeline network. The Turkey-Iran relationship is a “love to hate” relationship. Or to be more accurate it is a “hate and business” relationship because there isn’t much love in it.

If Iran wants to send its natural gas to Europe through a pipeline network and not through the sea, the only other option besides Turkey would be Russia. However Russia is the larger exporter of natural gas in the world, and Iran would not want its main competitor to control its natural gas. The problem is that Turkey does not want Iran to have any other alternatives, and it also wants the Qatar-Turkey pipeline, and the Iranians do not like Erdogan bullying them.

In the following Reuters article, titled “Turkey’s Erdogan visits Iran to improve ties after split over Syria”, January 2014, you can read the following:

First and Second Paragraphs

“Turkish Prime Minister Tayyip Erdogan visited Iran on Wednesday to bolster trade and energy ties, state TV said, in what also looked like a bid to defuse tensions over Syria by capitalizing on Tehran’s diplomatic opening to regional rivals and the West.

Iran has been a strong strategic ally of Syrian President Bashar al-Assad since the start of the uprising against him, while Turkey has been one of his fiercest critics, supporting his opponents and giving refuge to rebel fighters.

Fourteenth and Fifteenth Paragraph

“Erdogan’s delegation repeated Turkey’s demand for a discount on the price of natural gas from Iran, a senior Turkish official said. A senior Iranian official then told Reuters: “This issue was discussed but further talks will take place on the issue of discount. No decision has been made yet.

Turkey depends on imports for almost all of its natural gas needs and the $60 billion energy bill Ankara must foot annually has been the biggest driver of its ballooning current account deficit, regarded as the main weakness of its economy.”

http://www.reuters.com/article/2014/01/29/us-iran-turkey-erdogan-idUSBREA0S11T20140129

As I said Erdogan has also very good relations with Qatar, and they both support the Muslim Brotherhood. If the Sunni Muslims of the ISIS army win enough regions in Syria and Iraq, so that they manage to create a connection between Qatar and Turkey, Qatar and Turkey should be able to construct the Qatar-Turkey natural gas pipeline, which would transfer Qatari natural gas to Europe through Turkey, if of course Saudi Arabia or Kuwait agree to that too.

At the same time they can block the Iran-Iraq-Syria pipeline. Turkey would again receive lots of money in transit fees, and maybe discount energy prices from Qatar. The following map shows what ISIS would need to achieve, in order to enhance the Qatar-Turkey pipeline and to block the Iran-Iraq-Syria one. If you google a map with the areas controlled by ISIS today, you will see that this has almost been achieved.

Qatar Turkey Pipeline Isis

We therefore see that Turkey follows a very aggressive and ambitious energy policy, and she is almost an independent regional power. Turkey attacks anyone who dares to overcome her as an energy hub between Middle East and Europe, and she is in a constant bargaining process with the rich in energy countries. However the Americans and the Europeans do not seem to feel comfortable with having to rely on Turkey for the energy supply of Europe.


Turkey and the United States

Turkey is indeed a country with great strategic significance for Europe and the US, since it is only through Turkey that a pipeline carrying Iranian, Qatari or Turkmen natural gas can reach Europe, offering and alternative to Gazprom, something that would reduce the Russian influence over Europe (red, yellow and white lines). Note that Iran, Qatar and Turkmenistan are the 2nd, 3rd and 4th richest countries in the world respectively, in terms of natural gas reserves, with Russia being the richest. For the richest countries in natural gas reserves see page 21, of the following U.S. Energy Information Administration report, titled “Country Analysis Brief : Iran”.

http://www.eia.gov/countries/analysisbriefs/Iran/iran.pdf

The problem for the Americans is that Turkey has become too important and too powerful, and it is an independent regional power, and not an ally of the West. Therefore the West cannot rely on Turkey in the same way it used to do in the past.

Iran Pipelines

The Assad regime, is a major dispute not only between Turkey and Iran, but also between USA and Turkey. Assad is a traditional Russian ally, and he is not the best option for the Americans. Actually the Americans were very positive towards his overthrown sometime ago. However I do not thing that the replacement of Assad by a Sunni candidate who would be controlled by Turkey would be a better solution for the US. It would probably be worse, given that the United States have managed to significantly improve their relations with Iran, which is Assad’s major ally. If the United States normalize their relations with Iran, Assad should not be a big problem for them even though he is very close to Russia.

As you can read in the following Wall Street Journal article, titled “U.S., Iran Relations Move to Détente”, October 2014, the American-Iranian relation have significantly improved. More specifically, in the 8th paragraph of the following article you can read the following:

“This shows that although we see Turkey and Arab states as our closest allies, our interests and policies are converging with Iran’s,” said Vali Nasr, dean of the School of Advanced International Studies at Johns Hopkins University and a former Obama administration official. “This is a geostrategic reality at this moment, more than a conscious U.S. policy.”

http://online.wsj.com/articles/u-s-iran-relations-move-to-detente-1414539659

The relationship between Iran and the West is far from perfect. But it seems that the West is ready to overlook some things in order to buy Iranian oil and natural gas. And as you can read at the following Telegraph article, titled “Iran offers Europe gas amid Russian energy embargo fears”, May 2014, the Iranians seem ready to supply this natural gas to Europe.

http://www.telegraph.co.uk/finance/newsbysector/energy/10808037/Iran-offers-Europe-gas-amid-Russian-energy-embargo-fears.html

Therefore if the US-Iranian relations normalize, it would be much better for the US to have an option for providing energy to Europe, which would not involve Turkey, otherwise Turkey could become extremely demanding. And if Turkey controls Syria, this alternative will be gone. That should explain why the US is reluctant to overthrow Assad. Besides the Americans cannot hope to normalize their relations with Iran while they are chopping their major allies in Iraq and Syria.

I am not saying that this is the only reason. The Americans would also have to go against the Russians and many Europeans in order to overthrow Assad, but I believe that these considerations are of secondary importance to explain the change in the Obama policy towards Assad.

In the 7th paragraph of the following article of Public Radio International, titled “Did Barack Obama just signal a shift in US policy toward Syria?”, May 2014, you can read the following:

“He (Obama) seems to be signaling a potentially significant change in Syrian policy,” said Fredric Hof, who served as President Obama’s special representative for Syria in 2012. “But without spelling out in great detail what that change is exactly, or pledging that he would try to do something big enough to alter the situation on the ground decisively in Syria.”

http://www.pri.org/stories/2014-05-28/did-barack-obama-just-signal-shift-us-policy-toward-syria

What we read in most newspapers is that Obama needs Iran and Assad in order to combat the Jihadists of the ISIS army in Syria and Iraq. That can’t be true. ISIS and the Islamic State are mainly funded and supported by American allies i.e. by Qatar and Turkey, even though Qatar and Turkey would not admit so. But it is mainly in the Qatari, Saudi and Turkish interests to break Iran’s influence in Syria and Iraq, since that would stop the Iran-Iraq-Syria pipeline, and would also allow the construction of the Qatar-Turkey pipeline. For the Qatar-Turkey pipeline see the following Wikipedia link.

http://en.wikipedia.org/wiki/Qatar-Turkey_pipeline

Moreover when they are telling us that they are bombing ISIS, we do not know what exactly they are bombing, and if ISIS has or has not been informed before hand about the strikes. I am not saying that everything is a theater. I am saying that the Americans might be simply controlling ISIS with their strikes. If the Americans really wanted to take ISIS out they should have been able to do so by now. In the 3rd paragraph of the following article of the Telegraph, titled “How our allies in Kuwait and Qatar funded Islamic State”, September 2014, you can read the following:

“Islamic State (Isil), with its newly conquered territory, oilfields and bank vaults, no longer needs much foreign money. But its extraordinarily swift rise to this point, a place where it threatens the entire region and the West, was substantially paid for by the allies of the West. Isil’s cash was raised in, or channelled through, Kuwait and Qatar, with the tacit approval and sometimes active support of their governments”.

http://www.telegraph.co.uk/news/worldnews/middleeast/kuwait/11077537/How-our-allies-in-Kuwait-and-Qatar-funded-Islamic-State.html

At the following Reuters article, titled “Iraqi Prime Minister Maliki says Saudi, Qatar openly funding violence in Anbar”, March 2014, you can read about the Iraqi president accusing Saudi Arabia and Qatar for funding ISIS.

http://www.reuters.com/article/2014/03/09/us-iraq-saudi-qatar-idUSBREA2806S20140309

If you google “ISIS funding” you will find many sources arguing that it is the Persian Gulf States that are funding ISIS. Actually it is these states that have the economic incentive to destroy the Iranian zone of influence i.e. Iran-Iraq-Syria-Lebanon, which is actually what ISIS is doing. When Saddam Hussein was ruling Iraq, Iraq and Iran were in very bad terms. After the US attack on Iraq on 2003, and the overthrown of Saddam Hussein, Iraq came increasingly under Iranian influence, with Nouri al Maliki, the Prime Minister of Iraq from 2006 to 2014, being a man very close to Iran.

However until now the Americans have been very tolerant towards ISIS. ISIS makes the Qatar-Turkey pipeline possible, and also until very recently the Americans considered Iran as an enemy. The Qatar-Pipeline can send Qatari natural gas to Europe, if the US-Iranian rapprochement does not work out, in order to reduce the Russian influence. Under different scenarios, ISIS, the Kurds, Turkey, Qatar, Iran, they could all help to reduce Russian influence, and maybe Chinese influence, and the Americans are not closing any doors. The problem is that there are so many conflicting interests in this region, that it is very difficult for the Americans to keep all doors open at the same time.

I believe this is the main reason of the American-Turkish conflict. The Americans want to have all doors open, while the Turks want the Americans to overthrow Assad and put all their bets on Turkey, something that both the Americans and the Europeans do not want. Moreover there is a lot of trade between the Turks and the Russians.

At the following Deutsche Welle article, “Russia and Turkey agree on South Stream pipeline project”, August 2009, you can also read that in 2009, Erdogan singed an agreement with the Russian President Putin, in order to allow the South Stream, a Russian natural gas pipeline, to pass from Turkish waters in order to reach Europe.

http://www.dw.de/russia-and-turkey-agree-on-south-stream-pipeline-project/a-4548193

The Russians wanted to avoid Ukrainian waters, since the Russian-Ukrainian relationship is very problematic. The Russian pipeline South Stream (red line), was in 2009 the competitor of the Nabucco pipeline. The Nabucco pipeline (black line) was the pipeline supported by the Americans and the Europeans. I guess that Turkey would receive transit fees and even discounted energy prices from both the Russians and the Americans for accepting their pipelines, or maybe that’s what the Turks were hoping for.

South Stream Nabucco

However the geopolitical shifts are very quick nowadays, and tomorrow the US-Turkish relations might improve, while the US-Iranian ones might collapse. If the American-Iranian rapprochement effort collapses, the Americans might have to turn against Assad again. But the West needs Iran’s energy, and Iran wants to sell this energy to the West, so it is difficult to see how in the end they will not manage to find a way to work things out.

And if the US-Iran relations do not deteriorate, it is difficult to see how the US-Turkey relations will improve, unless Turkey accepts that it will not be the one and only energy hub of the region. Many analysts say that this is not the first crisis between US and Turkey, and that the two countries can overcome it as they have done in the past.

I also want to include a few articles that describe the deteriorating relation between the Americans and the Turks. The following RT (Russian Today) article, titled “Turkey disappointed that Obama does not overturn Assad”, describes Erdogan’s frustration about the American refusal to overthrow Assad.

http://rt.com/usa/174700-erdogan-talk-obama-syria/

To emphasize the deterioration between the US-Turkish relations I will also mention the following Financial Times article, titled “Turkey to buy $4 billion air defense system from China”, September 2013. In the 6th and 7th paragraph of the article you can read the following:

“Western diplomats said they were surprised and disappointed by Ankara’s preference of the Chinese group…..and emphasised their worries that the system would not be interoperable with Nato’s defence architecture.”

http://www.ft.com/intl/cms/s/0/326c5442-278c-11e3-8feb-00144feab7de.html

The following article of CBC says that Turkey, a prominent NATO member, was very silent during the crisis in Ukraine, and it mentions the large sums that are involved in the Russian-Turkish energy trade.

http://www.cbc.ca/news/world/ukraine-crisis-why-turkey-is-silent-as-nato-operations-ramp-up-1.2625991

In the 3rd paragraph of the following Guardian article, titled “Turkey denies new deal reached to open airbases to US in fight against Isis”, October 2014, you can read the following:

“On Sunday, the US said Turkey had agreed to let US and coalition forces use its military bases, including the key Incirlik airbase close to the southern city of Adana…But Turkish officials insisted that no decision had been taken on Incirlik”

http://www.theguardian.com/world/2014/oct/13/turkey-denies-agreement-open-air-bases-us-isis

At the following CNN article, titled “Russia to build first nuclear plant for Turkey”, May 2010, you can read that Russia and Turkey agreed to build a nuclear plant in Turkey.

http://ireport.cnn.com/docs/DOC-444748

I must also say that the shift in the Obama policy towards Assad, which is a byproduct of the US-Iran rapprochement, is not harming only the US-Turkish relations. Qatar, who hosts the American bases in the Persian Gulf, has spent approximately 3 billion dollars hopping to overthrow the Assad regime.

In the first paragraph of the following Financial Times article, titled “Qatar bankrolls Syrian revolt with cash and arms”, May 2013, you can read the following:

“The gas-rich state of Qatar has spent as much as $3bn over the past two years supporting the rebellion in Syria, far exceeding any other government, but is now being nudged aside by Saudi Arabia as the prime source of arms to rebels”.

http://www.ft.com/intl/cms/s/0/86e3f28e-be3a-11e2-bb35-00144feab7de.html

Therefore even though Qatar wants badly to overthrow Assad, their partner, the United States, will not do them the favor for the moment. However the trauma in the American-Qatari relations due to the American-Iranian rapprochement is nothing compare to the trauma of the American-Saudi relations. After all the Qataris are hopping to find a solutions with the Iranians, in order to jointly exploit the South Pars/ North Field natural gas filed, that lies in the Persian Gulf between Iran and Qatar. This is the largest natural gas field in the world, and you can see a rough sketch at the following map (red diagram).

South Pars North Field

As I said the problems between the Saudis and the Iranians is much more severe, because Iran is the main economic competitor of Saudi Arabia, a traditional US ally since 1945. The American-Iranian rapprochement is causing Saudi Arabia to look eastwards, towards its best client i.e. China. In the first paragraph of the following Reuters article, titled “Saudi Arabia warns of shift away from U.S. over Syria, Iran”, October 2013 you can read the following:

“Upset at President Barack Obama’s policies on Iran and Syria, members of Saudi Arabia’s ruling family are threatening a rift with the United States that could take the alliance between Washington and the kingdom to its lowest point in years”.

http://www.reuters.com/article/2013/10/22/us-saudi-usa-idUSBRE99L0K120131022

The US-Israel relations are another victim of the change of the American policy in the Middle East. The Israelis do not really mind whether Syria is under the influence of Iran or under the influence of Turkey and Qatar, since in both cases it would have to face a very hostile regime. However what really matters for the Israelis, is the rapprochement between USA and Iran, which is the true cause for the tolerance of the Assad regime on behalf of the USA.

The American-Israeli relations are at their lowest point in decades, and the Israelis are looking towards Russia. Russia has very good relations with Iran, but if Iran makes peace with the West and start selling its natural gas to Europe through Turkey, it would be tough competition for Russia’s Gazprom, and therefore the Russian-Iranian relations should deteriorate.

Therefore the tolerance towards the Assad regime is a byproduct of the American effort to reach an agreement with Iran. The fact that the Americans overlook the problems their rapprochement with Iran is causing in their relationships with their traditional allies in the region, shows how important Iran is for the US.


Kurdistan

The deterioration in the American-Turkish relations make the Americans and the Europeans to see very positively the establishment of an independent Kurdistan. Which are the exact borders of Kurdistan is an open question, but as you can see on the following Wikipedia map, the regions that historically have large Kurdish populations, expand from Iran to almost the Mediterranean Sea. However the Kurds are not the majority of the population in all these regions.

Kurdistan Map Wikipedial

Source: Wikipedia http://en.wikipedia.org/wiki/Kurdistan#mediaviewer/File:Kurdish-inhabited_area_by_CIA_(1992).jpg

Kurdistan (2)

The Kurds are probably the West’s best friend in the Muslim world. Kurdistan lies in four countries, Turkey, Syria, Iraq and Iran. None of these countries want an independent Kurdistan, which makes the Kurds a natural ally for the Western world. There are 30 million Kurds in the world, and they are the largest ethnic group without a homeland, which gives rational for an independent Kurdistan, which is something that seems to suit western interests.

An independent Kurdistan would not be as big as the one on the above maps of course, but it would greatly strengthen the presence of the West in the region, especially in case the relations between US and Turkey at some point collapse. Moreover Kurdistan is next to Iran, which would again be a great help for the West in case the rapprochement between Iran and the West does not bear fruits. Moreover the Kurds would be extremely happy to have American military bases in their territories.

In the first paragraph of the following Reuters article, titled “Turkey’s U.S. relations show strain as Washington’s patience wears thin”, October 2014, you can read the following:

“The U.S. decision to air-drop weapons to Kurdish forces in Syria on the same day Turkish President Tayyip Erdogan dismissed them as terrorists is the latest false note in the increasingly discordant mood music coming out of Washington and Ankara.”

http://www.reuters.com/article/2014/10/23/us-mideast-crisis-turkey-idUSKCN0IC1Z520141023

Erdogan calls the Kurds terrorists, and the Americans drop weapons at them. At the following Wall Street Journal article, titled “Building the U.S.-Kurdistan Special Relationship”, July 2014, you can read the following:

2nd and 3rd Paragraph

“The time has come for America and the West to support Kurdish independence and, simultaneously, to set up U.S. bases in Iraqi Kurdistan that would make it America’s military hub in the region.

After all, this country-in-the-making has proved to be a haven of stability, relative security and pro-American, pro-Western sentiment ever since it broke free from Saddam’s misrule.”

And the article continues in the 12th and 13th paragraphs

“U.S. military planners can’t assume that our alliance with Turkey won’t decline further. Nor should they assume as given Turkey’s military cooperation with NATO for missions against adversaries in places like Syria and Iran.

And it would be even more foolish for American policy makers to assume that U.S. forces will always be able to use bases in Kuwait, Qatar and Bahrain. All three countries are dictatorships vulnerable to upheaval. So far, adroit use of their fantastic wealth has protected these countries’ rulers against the resentments of their subjects, but this may not always be the case.”

http://online.wsj.com/articles/the-u-s-should-guarantee-kurdish-independence-1405020652

Finally the title of the following Guardian article says it all. The title of the article is “US and Turkey’s push and shove diplomacy has Kurds in the middle. Washington wants Erdogan to do more to back the Kurds in Kobane, while Ankara insists Assad should be removed first”.

The title says the whole story, because what Erdogan is really saying to the Americans is the following:

“I am willing to help the Kurds, I am willing to help you with ISIS, but Assad, which is the Iranian ally in Syria, must go first. Only if Syria is controlled by me (Erdogan), and Iran is totally dependent on me (Erdogan again), I can fight ISIS and help the Kurds”. Of course Erdogan does not say that openly, but that’s what he is thinking and everybody knows it. The problem is that the West does not like the way he is thinking, and it does not like that Turkey has become such an important player.

http://www.theguardian.com/us-news/2014/oct/07/us-turkey-diplomacy-isis-kurds-kobani

In the following Financial times article, titled “Turkey demands US target Assad as price of co-operation”, October 2014, you can read that Erdogan demands Assad’s overturn in order to help the Americans with the Kurds.

http://www.ft.com/intl/cms/s/0/a0da17d2-4d71-11e4-bf60-00144feab7de.html

A natural question is why would Erdogan help the Kurds at all, given that there are millions of Kurds in Turkey asking for an independent Kurdistan? Obviously Erdogan would not like to help the Kurds at all, but he simply can’t ignore them, especially when the West sees them favorably. But we should not see the Kurds as one solid group. The two main Kurdish political parties are Ocalan’s PKK in Northern Kurdistan (Turkey), and the Barzani’s KDP in Southern Kurdistan (Iraq).

These two groups are competing for influence and in the past they have actually been fighting each other. Erdogan is obviously favoring Barzani’s KDP in Northern Iraq, and not Ocalan’s PKK in Turkey. Actually to make things worse for the Kurds, Erdogan is helping the Iraqi Kurds of KDP to export oil from the oil fields they control in Northern Iraq. He does so in order to make it harder for Iraqi Kurds to unite with Turkish Kurds. In the first two paragraphs of the following France 24 article, titled “Kurdish factions unite in fight against jihadists in Iraq”, August 2014, you can read the following:

“Fighters from the Kurdistan Workers Party (PKK), a Kurdish guerilla faction in Turkey, joined forces with the regular Peshmerga forces of the Kurdistan Regional Government (KRG) in northern Iraq to oust radical Sunni extremists from the town of Makhmour. FRANCE 24’s special correspondents in Iraq report that the battle of Makhmour marks the first time the PKK and KRG forces have fought side by side. Despite years of infighting, both factions want to prevent Islamist militants from gaining a foothold in Kurdish territories and redrawing the borders of the region”.

http://www.france24.com/en/20140813-video-kurdish-factions-unite-fight-against-isis-peshmerga-pkk-islamic-state/

In the first and second paragraphs of the following American Center of Democracy article, titled “Kurdistan Oil Export: A game changer”, June 2014, you can read the following:

“In late May 2014 Turkish officials announced that oil from Iraqi Kurdistan had just been exported to international markets……..The May 2014 announcement that a million barrels of Kurdish oil had been exported to Europe through Ceyhan seems to have caught everyone by surprise”.

http://acdemocracy.org/kurdistan-oil-export-a-game-changer/

In the first paragraph of the following article of the Kurdistan Tribune, titled “Ocalan v. Barzani: Two contradictory worlds”, May 2013, you can read the following:

“The Kurdistan Workers Party (PKK) and its legendary leader, Abdulla Ocalan, pose a strong challenge to the Kurdistan Democratic Party (KDP) and its leader, Masoud Barzani. The PKK is no longer a party just for northern Kurdistan: Today it also impacts significantly on the other parts of Kurdistan – something the KDP cannot tolerate”.

http://kurdistantribune.com/2013/ocalan-v-barzani-two-contradictory-worlds/

Therefore we should not see the Kurds as a solid group, because they have their differences and Erdogan is trying to make it harder for them to unite, by having Iraqi Kurds to depend on him for exporting their oil, through the Turkish port of Ceyhan in the Mediterranean Sea. If Iraqi Kurdistan was an independent country, it would be approximately the 10th richest region in the world in terms of oil reserves (not oil production). The red diagram in the following map is a very rough sketch of Kurdistan, and the export route for Kurdish oil in Northern Iraq.

However even though the Kurds are not as solid as a rock, it seems that the conditions for the establishment of an independent Kurdistan are very favorable since the Western countries see them very positively.

The Kurds have also Israel on their side. The Kurds are for Israel a natural ally, because the Kurds are not Arabs, they are not Persians, they are not Turks, and they are moderate Muslims. Ocalan’s PKK is a Marxist Leninist party, and religion should not be important at all.

Moreover the Kurds can take lands, and therefore weaken, four of Israel’s greatest enemies i.e. Iran, Syria, Turkey, Iraq. That’s the reason Israel is openly asking for an independent Kurdistan. For the Kurds too, even though they are Muslims in a Muslim region, Israel should be a natural ally, since the countries that surround them do not see an independent Kurdistan positively. And if in the past, the excellent relations between Israel and Turkey prevented Israel to openly support an independent Kurdistan, now there is nothing to stop them.

At the following two articles, one from the Guardian, titled “Israel’s prime minister backs Kurdish independence”, June 2014, and one from Reuters, titled “Israel’s Netanyahu calls for supporting Kurdish independence”, June 2014, you can read that the Israeli Prime Minister Netanyahu openly asks for Kurdish independence and Kurdish statehood.

http://www.theguardian.com/world/2014/jun/29/israel-prime-minister-kurdish-independence

http://www.reuters.com/article/2014/06/29/us-iraq-security-kurds-israel-idUSKBN0F40R520140629

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The First World War for Oil 1914-1918: Similarities with the 2014 Oil Wars 100 Years Later

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Iakovos Alhadeff

Introduction

With this essay I want to provide a summary of why oil was the main cause of the First World War (1914-1918), which could be also called the First World War for oil, and also compare this oil war with the oil wars of 2014 one hundred years later. The main alliances of WW1 were England, France and Russia on one side, known as the ‘allies’, and Germany, Austro-Hungary and Italy on the other side, known as the “central powers”. See the following, very rough, map.

Picture 1 Alliances

Please note that Italy was an ally of Germany and Austro-Hungary, but she decided not to enter the war in 1914. However in 1915, the English and the French promised territorial rewards to Italy, in case of victory, and Italy decided to enter the war on the side of the Allies.

The British and German Empires

At the beginning of the 20th century (1900) England was what the U.S.A. is today. England was an empire extending from Canada and East Africa, to India and Australia, covering most of the globe as you can see on the following rough map (green colour).

Picture 2 British Empire

However after her victory against France in 1871, Germany established itself as one of the great powers, and with its rampant industry she became England’s main competitor. In a sense Germany was for England what China is for the U.S.A. today. The most important problem in the Anglo-German relations was Germany’s wish to extend her influence to the Persian Gulf through the Ottoman Empire.

Picture 3 Middle East

Even though the shaky Ottoman Empire had lost most of her lands, she was still extending to the Persian Gulf through what today are Syria, Iraq and Saudi Arabia (parts of the green area on the above map). The alliance between the German Empire, the Empire of Austro-Hungary, Bulgaria and the Ottoman Empire, was a great threat for the English interests.

Picture 4 Threat to England

As you can see from my rough (red) diagram, the alliance between Germany, Austro-Hungary, Bulgaria and Ottoman Empire, would form a solid block extending from Germany to the Persian Gulf, since Syria and Iraq were Ottoman territories. A large part of the Balkans was also part of the Ottoman Empire at the time, and it was possible for the German Empire to connect to the Ottoman Empire and the Persian Gulf through Austro-Hungary, as you can see on the following 1912 map of the Balkans.

The Balkans in 1912

Picture 5 AustroHungary Borders Turkey

The above situation was a threat for the control of the Persian Gulf, which is the richest region in the world in terms of oil reserves, it was a threat for the control of the Caspian Region, which is the second richest region in the world in terms of oil reserves, and which was controlled by the Russians, it was a threat for India, which was England’s most important colony, and it would also bring the Germans very close to the Suez Canal and Egypt as you can see on the following map.

Picture 6 Middle East

The Suez Canal and Egypt were under British Control, and were crucial for the control of India in South Asia, since the Suez Canal was cutting almost in half the distance between England and India. The Suez Canal (black circle) was inaugurated a few decades earlier (1869).

Picture 7 Suez India

The Triple Alliance Between England, France and Russia

Facing the rising German influence in the Middle East, the English tried and managed to close their long and significant disputes with the French and the Russians, in order to form an alliance against the Germans and their allies. The major disputes between the French and the English concerned their colonies in Africa (see the following map).

Picture 8 Colonies

At the beginning of WW1, France was controlling almost all of West Africa (yellow colour), and England was controlling almost all of East Africa (red colour), and therefore Africa was a source of disputes between the English and the French.

However when confronted with the German ‘threat’, the French and the English rushed to close their disputes with a series of agreements known as ‘Entente Cordial’. As you can read at the following Wikipedia link, with Entente Cordial in 1904, England and France closed 1000 years of disputes and wars.

https://en.wikipedia.org/wiki/Entente_cordiale

Among other things, with this agreement England accepted France’s control over Morocco, which was crucial for controlling the Straits of Gibraltar, and France accepted England’s control over Egypt, which was crucial for controlling the Suez Canal (see lines 1 and 2 on the following map).

Picture 9 Earth 3D

Moreover, with their alliance with the English and the Russians, the French were hoping to take their revenge for their defeat from the Germans in 1871, and regain control of the rich in iron and coal area of Alsace and Lorraine, which was lost during this war. Coal was in the 19th Century what oil became in the 20th Century, and even the navies were using coal, until coal was finally replaced by oil in the early 20th Century (1900). Indeed after the defeat of the Germans in 1918, the French regained control of Alsace and Lorraine.

Picture 10 Alsace Lorraine

Moreover, with the Sykes-Picot Agreement, the English promised that in case of victory they would offer the French some of the Ottoman Empire territories. According to this agreement, England would take the oil rich Iraq, and France would take Syria. Actually there was no Iraq and Syria at the time. The Ottoman territory that would be taken by the English with this agreement was later given the name ‘Iraq’, and the Ottoman territory that would be taken by the French with the same agreement was later given the name ‘Syria’.

This is the reason that the members of the ISIS army (Islamic State of Iraq and Syria) are saying that they are destroying the Sykes-Picot Agreement by reuniting Syria and Iraq. You can see the Sykes-Picot Agreement on the following rough map.

Picture 11Sykes Picot Agreement

You can also read about the Sykes-Picot Agreement at the following Wikipedia link.

https://en.wikipedia.org/wiki/Sykes%E2%80%93Picot_Agreement

Moreover with the Anglo-Russian Entente in 1907, the English and the Russians closed their centuries’ long disputes for the control of Central Asia and the Middle East (Iran, Afghanistan and Tibet). You can read at the following Wikipedia link, that in 1907, the English and the Russians agreed to split Iran, Afghanistan and Tibet in spheres of influence.

https://en.wikipedia.org/wiki/Anglo-Russian_Entente

The agreement between the English and the Russians allowed them to stop antagonizing each other and turn their attention to the Germans and the Ottomans who were a threat for the control of the Persian Gulf and the Caspian Sea.

However from their alliance with the French and the English, the Russians did not simply expect to protect the oil rich Caspian Sea region from the German and Ottoman threat, but were also hoping to gain control of Constantinople, the Bosphorus Straits and the Dardanelles, which were controlled by the Ottomans, and which would give the Russians uninterrupted access to the Aegean and the Mediterranean Seas (see maps below).

Constantinople

Black Sea Dardanelles

At the following Wikipedia link you can read that with the Constantinople Agreement, the English, the French and the Russians, agreed that in case of victory, Russia would take control of Constantinople, the Bosphorus and the Dardanelles.

https://en.wikipedia.org/wiki/Constantinople_Agreement

However even though the allies did finally win the war, Russia did not get Constantinople (today Istanbul), because Russia collapsed in 1917 and exited the war, since she entered a painful civil war between the tsarists and the Communists.

 By agreeing with the Russians to split Iran into spheres of influence, the English would gain control of the Persian Gulf while the Russians would retain the undisputed control of the Caspian Sea, and together they could fight the Germans and the Ottomans. You can see on the following map that Iran is the region between the Persian Gulf and the Caspian Sea, holding itself a very large amount of oil and natural gas reserves. Iran is the second and fourth richest country in the world in terms of natural gas and oil reserves respectively.

Iran Brown

However at the time most of the region’s oil was coming from Iraq and Baku, since oil in Iran was only discovered in 1908.

The Anglo-Franco and the Anglo-Russian alliances, together with the Franco-Russian alliance, encircled Germany and her allies (see following rough map).

Picture 1 Alliances

The Role of the Balkan Countries in WWI

One of the reasons there was so much tension in the Balkans before the outbreak of World War 1, was that the Balkans was the connection between Germany and her allies with the Ottoman Empire and the Persian Gulf. The following map shows the Balkans before the Balkan Wars of 1912-1913.

The Balkans Before the Balkan Wars of 1912-1913

Picture 5 AustroHungary Borders Turkey

It can be seen on the above map, that with the status quo that existed before the Balkan Wars of 1912 and 1913, Germany would have no problem to connect to the Persian Gulf by railway, using the Austro-Hungary-Ottoman Empire corridor.

However with the Balkan Wars of 1912-1913, Greece, Serbia, Bulgaria and Albania, managed to annex almost all the European territories of the Ottoman Empire. Greece, Serbia and Romania, all of which were on the side of the allies during the First World War, formed a wall between Germany and the Ottoman Empire as you can see on the following map, (Bulgaria finally entered the war on Germany’s side in WWI).

The Balkans after the Balkan Wars of 1912-1913

New Borders Balkans

The German plan was to construct the famous Baghdad Railway, that would connect Berlin to the Persian Gulf (see later sections), and Greece, Serbia and Romania were forming a wall against the Baghdad Railway Project. It is not a coincidence that World War I broke out on the 28th of July 1914, with the Austro-Hungary declaring war to Serbia, with all other countries running behind these two countries. The following map shows the Balkans today.

Balkans today

It can also not be a coincidence that the Balkan Wars took place in 1912 and 1913, and the First World War broke out in 1914. When I am saying that the Balkan Wars were not a coincidence, I do not mean that Greece, Serbia and Bulgaria attacked the Ottoman Empire because they wanted to prevent Germany from connecting to the Persian Gulf. These countries did want the Ottoman territories, and they were supported by England, Russia and France, in order to prevent the German-Ottoman connection. The Ottoman territories were simply their rewards.

As you can read in section ‘Reaction Among the Great Powers During the Wars’ of the following Wikipedia link, Germany was already heavily involved in the internal politics of the Ottoman Empire, and officially opposed the attack on the Ottoman Empire, but because it was obvious that the shaky Ottoman Empire could not protect for long her European territories from Greece, Bulgaria and Serbia, Germany was supporting Bulgaria from the opposite camp, which was called the ‘Balkan League’’. And in the end, Bulgaria did indeed join Germany’s camp in WW1.

https://en.wikipedia.org/wiki/Balkan_Wars#Reactions_among_the_Great_Powers_during_the_wars

In the same Wikipedia link, you can also read that Russia was the primary mover of the Balkan League countries i.e. Greece, Serbia and Bulgaria against the Ottoman Empire. This seems very natural, since Russia not only wanted to prevent Germany from obtaining access to the Caspian Sea, but she was also a traditional enemy of the Ottoman Empire and wanted to gain control of Constantinople, Bosphorus and the Dardanells, which would allow the Russian Navy to access the Mediterranean Sea, as I already said.

Black Sea Dardanelles

You can also read in the same Wikipedia link that Austria-Hungary was totally opposed to the advancement of the Balkan countries, Greece, Serbia and Bulgaria, in the region. France, a Russian ally, informed Russia that she was not ready for a war. England, even though a supporter of the Ottoman Empire, encouraged the advancement of the Balkan countries. That’s what Wikipedia says about the reactions of the Great Powers during the Balkan Wars of 1912 and 1913.

We therefore see that Germany and Russia were supporting the sides we would expect them to support in the Balkan Wars. However things were a bit more complicated for England. Because on one hand England was facing the threat of German expansion to the Persian Gulf and India, and on the other hand she was facing the threat of Russian expansion through the Straits of Bosphorus and the Dardanelles to the Mediterranean Sea, which could pose a threat for the sea corridor between the Mediterranean Sea and the Indian Ocean i.e. the Suez Canal and the Red Sea

Red Sea

Red Sea 2

The following map depicts the situation for the English. The purple arrows represent the German threat to the Persian Gulf and India, and the red arrows represent the Russian threat to the Suez Canal.

The German threat for the English (purple lines), and the Russian threat for the English (red lines)

Germans Russians OttomansJPG

England perceived the collapsing Ottoman Empire as less dangerous than the Russian Navy for the control of the Suez Canal and Egypt. However in the end, under the German threat for the Persian Gulf and India, England accepted Russian control over the straits of Bosphorous and the Dardanelles in case of victory. With the Constantinople Agreement as I already said, France, England and Russia agreed on the control of Constantinople and the Straits by Russia.

Another factor that helped England and Russia to reach an agreement was that around 1880, England had taken control of Cyprus, Egypt and the Suez Canal, and was feeling more confident that it could prevent the Russians from taking control of the Suez Canal.

Before I close the section on the Balkans, I must mention that the ‘wall’ formed by Greece and Serbia in 1914 against Germany and the Baghdad Railway, which prevented the Germans from connecting by railway to the Ottoman Empire and the Persian Gulf, was still there 80 years later. Greece and Serbia, two traditional Russian allies, were forming a wall in the 90’s against the Americans and the Europeans, who wanted to bring oil and natural gas from Azerbaijan to the Adriatic Sea and Italy through the AMBO pipeline.

The Greek-Serbian wall was broken first by the creation of the state of FYROM (Former Yugoslav Republic of Macedonia) in 1991, and by the NATO war on Serbia and the autonomy of Kosovo in South Serbia on 1998 (see following map). You can read more about the NATO attack on Serbia and the AMBO pipeline in my essay ‘The NATO attack in Yugoslavia – Another Energy War’.

Serbia War

Arab Nationalism

While in the Balkans the Russians were helping the Greeks, the Serbs and the Bulgarians to attack the Ottoman Empire and annex her territories, in order to prevent the Germans from connecting to the Ottoman Empire through the Baghdad railway, and in order to gain control of Constantinople, the English were organizing an Arab revolt against the Ottomans.

The English were organizing the Arabs at the Southern parts of the Ottoman Empire, the regions that today are Saudi Arabia, Iraq and Syria, in order to push the Ottomans away from the Persian Gulf. Therefore we see that the allies were helping the local populations both at the Balkans and in the Arab world, in order to turn them against the Ottomans and prevent Germany to connect to the Persian Gulf through the Baghdad railway. For the Arab revolt, 1916-1918, see the following Wikipedia link.

https://en.wikipedia.org/wiki/Arab_Revolt

Therefore by supporting Balkan Nationalism, the allies managed to block the connection between the German and Ottoman Empires (black line), and at the same time, by supporting Arab nationalism in Syria and Iraq, they managed to block the connection between the Ottoman Empire and the Persian gulf (red line).

Blocks to Germany

The Oil Factor in the First World War

From all the above it can be said that the main cause of World War I was the Germans’ wish to use the Ottoman corridor in order to expand to the Middle East, which threatened the British interests in the Middle East and India. The importance of oil can be also seen from the fact that the English, the French and the Russians that had centuries’ long disputes, managed to put these disputes aside, in order to form an alliance against the rise of Germany.

It is of course no coincidence that just before the outbreak of the First World War, oil engines had started replacing coal engines, dramatically increasing the geopolitical importance of the oil rich regions. Note that both England and Germany were very rich in coal but very poor in oil. At the following Wikipedia link, at section ‘Lord of the Admiralty’, you can read that in 1911 Winston Churchill, as the head of the British Navy, ordered the replacement of the coal engines with oil engines, something that would soon become the norm for all navies and armies, making the 20th Century the century of oil. The use of oil would ensure greater speed for the British Naval ships. Moreover smoke would stop exposing their position.

https://en.wikipedia.org/wiki/Winston_Churchill#First_Lord_of_the_Admiralty

 The Baghdad Railway

Since the Baghdad Railway was a very important German project for the connection of Germany with the Persian Gulf (see red line on the following map) I must say a few words about it.

Berlin BasraJPG

Berlin Baghdad

Note! Even thought the Baghdad Railway would follow the route of what today is Germany- Czech Rep-Austria-Hungary-Serbia-Bulgaria-Turkey-Syria-Iraq, and would pass from Baghdad and Basra, my red lines on the maps are rough and not exact lines.

For some people the Baghdad Railway was the real cause of the First World War, since it is this very railway that would connect Germany to the Persian Gulf, also bringing Germany close to India. I think it seems more appropriate to consider Germany’s wish to expand to the Persian Gulf as the cause of the war, than to consider the Baghdad Railway as the cause of the war.

What was important was the decision of the Germans to expand to the Persian Gulf, not the actual way they would do so. Whether this connection would be achieved by the Baghdad Railway or some other means, it seems to be of secondary importance. However nobody can deny that the Baghdad Railway was very important, and therefore I will provide some Wikipedia sources to demonstrate that this is so.

You can read at the following Wikipedia link that the construction of the Baghdad Railway started in 1903 and was completed in 1940, and its aim was to connect the German Empire to the Persian Gulf, because the Germans wanted to acquire control of a port in the Persian Gulf. Please note that the project started in 1903, and the English and the French closed their differences with the Entente Cordiale in 1904, and the English and the Russians closed their differences in 1907.

https://en.wikipedia.org/wiki/Baghdad_Railway

At the end of the 3rd paragraph of the following Wikipedia link, you can read that the Germans had managed to obtain ownership of some oil fields in Iraq, and with a railway to Basra they could obtain oil supplies while avoiding the sea lanes and the Suez Canal, where the British Navy was dominant. At the same time, they could use the Persian Gulf to export their products to Asian countries.

Therefore this railway would have two roles. The first one would be to supply the German industry and the German army with oil, and the second to transport the German products to the Persian Gulf, and from the Persian Gulf to export them to the Asian countries, India included.

https://en.wikipedia.org/wiki/Baghdad_Railway

More specifically, according to Wikipedia:

The Germans gained access to and ownership of oil fields in Iraq, and with a line to the port of Basra would have gained better access to the eastern parts of the German colonial empire, by avoiding the Suez Canal”.

 In the beginning of the 4th paragraph of the following link, you can read that the Baghdad Railway had become a source of tension in the years before WW1.

 “The railway became a source of international disputes during the years immediately preceding World War”. 

 https://en.wikipedia.org/wiki/Baghdad_Railway

 In the first paragraph of the following Wikipedia link, in section ‘Overview’, you can read that the Baghdad Railway would offer the German Empire safe access to oil by avoiding the British Navy.

https://en.wikipedia.org/wiki/Baghdad_Railway#Overview

At the second paragraph of the same Wikipedia link, you can read that the Baghdad Railway was also a threat to Russia, since it would offer the German Empire access to the Caucasus Mountain. Caucasus is located next to the oil rich Caspian Sea region, which was controlled by the Russians.

https://en.wikipedia.org/wiki/Baghdad_Railway#Overview

Cacausus

Moreover in the beginning of the 4th paragraph of the following Wikipedia link, it is mentioned that as early as 1871, geologists had already discovered rich and high quality oil fields in the area of Mesopotamia (Iraq), which was at the time part of the Ottoman Empire.

https://en.wikipedia.org/wiki/Baghdad_Railway#Overview

At the paragraph before the last one in the following Wikipedia link, you can read that as early as 1903 there was unrest in France, England and Russia for the beginning of the Baghdad Railway.

http://en.wikipedia.org/wiki/Baghdad_Railway#The_Baghdad_Concession

In the first line of section ‘After the War’ of the following Wikipedia link, you can read that after the end of WW1, with the Treaty of Versailles, Germany was stripped from the ownership of the Baghdad Railway (Deutsche Bank was a larger investor in this project).

http://en.wikipedia.org/wiki/Baghdad_Railway#After_the_war

In the last line of the 3rd paragraph of the following Wikipedia link, you can read that there were negotiations between the English and the Germans before WW1 regarding the Baghdad Railway, and the Germans had agreed to allow some Englishmen in the board of directors, in order to ensure that the railway would not rich the Persian Gulf.

This is actually the reason that some people believe that this railway was not the cause of WW1, since the Germans and the English had an agreement about it. However I do not think that a paper agreement would make the English and the Russians feel very secure.

https://en.wikipedia.org/wiki/Causes_of_World_War_I#International_relations

And like if all these disputes for the Iraqi and the Baku oil were not enough, in 1908 oil was discovered in Iran too, as you can read in the following Wikipedia link, further increasing the geopolitical importance of the region.

https://en.wikipedia.org/wiki/Anglo-Persian_Oil_Company

If you wonder why Saudi Arabia, which is the king of oil, is not mentioned at all in my essay, it is because the first important oil field of Saudi Arabia was discovered in 1938. As you can see on the following map, at the beginning of WW1 the interior of the Arabian Peninsula (Saudi Arabia) was not controlled by any great power since oil had not been discovered yet. The Ottomans and the English were only controlling its outer parts which were important for controlling the sea lanes.

Picture 6 Middle East

As you can read in section ‘Before the discovery of oil’ of the following Wikipedia link, the consensus at the beginning of the 20th Century (1900), was that there was not oil in the Arabian Peninsula.

https://en.wikipedia.org/wiki/History_of_the_oil_industry_in_Saudi_Arabia

As you can read in section ‘Discovery of Oil’ of the following Wikipedia link, oil was finally discovered in Saudi Arabia in 1938.

https://en.wikipedia.org/wiki/History_of_the_oil_industry_in_Saudi_Arabia

The Second World War for Oil 1939-1945

The Second World War for oil cannot be considered as an independent event from the First World War for oil. After wining the war, the allies imposed extremely hard conditions on Germany. The German people suffered, and this led a lunatic to power, and as soon as Germany was strong enough she stroke back. According to historians, the decisive battle of WWII was the Battle of Stalingrad (blue circle). Stalingrad was later renamed to Volgograd.

Stalingrad

As you can see on the map, if Hitler had won in Stalingrad, he would have marched to Baku, and he would have secured oil reserves for his army. Today we can easily go to a gas station and get fuels, so it is difficult to imagine that an army can actually run out of fuel. And yet it was very often the case for whole army divisions to run out of fuels in the Great Wars. And it was the allies that were controlling both the Caspian and the Middle East oil.

If Hitler had taken control of Baku, he would have oil supplies to launch a Panzer attack to the Middle East. And if he had won the English in the Middle East, the war in Europe and North Africa would be over. This is the reason that the battle of Stalingrad is considered as one of the most decisive battles of WWII.

It seems strange that Hitler turned against Stalin and the Soviet Union, his former ally in 1941, since until then it was the Communists who were supplying the Germans with the oil and minerals they badly needed. As you can read in section “Later Events and Total Trade”, of the following Wikipedia link, the Communists supplied the Nazis with 900.000 tons of oil in the period 1940-1941, that is before the Nazi attack on Russia.

https://en.wikipedia.org/wiki/German%E2%80%93Soviet_Credit_Agreement_(1939)

At the end of the first paragraph of the same Wikipedia link, you can read the following:

“The Soviets fulfilled their obligations to the letter right up until the invasion, wanting to avoid provoking Germany. All these agreements were terminated when Germany invaded the Soviet Union in June 1941, in violation of the treaties between the two countries.”

However the oil that the Communists were supplying was not enough for Hitler who was fighting a global war, and he needed total control of the Baku oil. The Nazis were not crazy to terminate the Nazi-Communist alliance which would mean a giant enemy on their east. They simply needed more oil than the Communists were supplying.

In the second paragraph of the following encyclopedia.com link, you can read that according to the Nazi-Communist Economic Agreement that was signed on the 20th of August of 1939 by Karl Schnurre and  Yevgeny Babarin, the Communists would supply the Nazis with raw materials i.e. oil, wood, manganese etc, and the Nazis would supply the Communists with manufactured goods.

http://www.encyclopedia.com/doc/1G2-3404101270.html

You can read about how the Communists were feeding the Nazi war machine at the Marxist site www.marxist.org, at the following link.

http://www.marxists.org/history/etol/writers/vance/1941/01/russia1.htm

In the 5th paragraph of the following article of The Guardian, you can read the following:

The pact eventually extended to the economic sphere, with Germany providing military equipment in exchange for raw materials such as oil, grain, iron and phosphates”.

http://www.theguardian.com/books/2014/aug/06/devils-alliance-hitlers-pact-stalin-1938-1941-roger-moorhouse-review

For the importance of the Nazi Communist Economic Agreement, you can also read the article of the historian Heinrich Schwendemann, “German-Soviet Economic Relations at the Time of the Hitler-Stalin Pact 1939-1941”, at the following address:

http://www.persee.fr/web/revues/home/prescript/article/cmr_1252-6576_1995_num_36_1_2425

Similarities of WWI with the Oil Wars of 2014

Today, 100 years after the First World War for oil in 1914, we see the oil and natural gas wars in Syria and Iraq, in Ukraine and in Libya, and we can assume that nothing has changed. The wars in Libya, Ukraine, Iraq and Syria, are the first flames of the Third World War for oil, and of course everybody hopes that these first flames will not become a big fire like it happened in the previous World Wars for oil. However since the current wars take place in three continents, i.e. Ukraine in Europe, Iraq and Syria in Asia, and Libya in Africa, we can assume that we are already in a mini World War for oil.

The situation in the Persian Gulf and the Caspian Sea is very similar to the situation in these regions in 1914. The difference is that the Americans have replaced the English, and the Chinese have replaced the Germans. In WW1 it was the British Navy that was dominating the seas, and it was Germany that was trying to exploit its geographical advantage in order to avoid the British Navy and connect to the oil rich region through the Ottoman Empire and the Baghdad Railway, since Germany was much closer than England to the Persian Gulf and the Caspian Sea (black line).

China GermanyJPG

Today, instead of Germany, it is China that is trying to exploit its geographical advantage in order to circumvent the American Navy and connect to the Persian Gulf, except that due to technological advancements the Chinese are not using railways but oil and natural gas pipelines.

The Chinese have already connected to the Caspian Sea by a pipeline network that connects China to the rich in oil Kazakhstan and the rich in natural gas Turkmenistan (red lines), and they are trying to construct a pipeline network that will connect China to Iran and the Persian Gulf. The war in Afghanistan is definitely relevant to the Chinese effort to connect to Iran and the Persian Gulf, since Afghanistan is very poor in oil and natural gas. What makes Afghanistan important is its position between Iran and China (see my essays ‘The 21st Century War for Iran’s Oil’ and ‘Why the U.S.A. Invaded Afghanistan’ for more information on the connection between China and Iran).

The other similarity between the First World War for oil in 1914 and the 2014 oil wars is the Baghdad Railway and the Qatar-Turkey Pipeline. In 1914 Germany wanted to construct the Baghdad Railway in order to connect to the Persian Gulf and obtain oil, but Greece and Serbia were blocking her. Or to be more accurate nobody was blocking her, since the European territories of the Ottoman Empire bordered Austro-Hungary, but with the Balkan Wars of 1912-1913, the English and the Russians helped Greece and Serbia to absorb the European territories of the Ottoman Empire in order to block the Baghdad Railway that would connect Germany to the Ottoman Empire and the Persian Gulf (black line).

Baghdad Railway Qatar TurkeyJPG

In 2014, actually earlier since the war in Syria started in 2011, Qatar and Turkey wanted to construct a Sunni natural gas pipeline that would transport Qatari natural gas to Europe through Turkey (red line), but  the Shiite Iraq and Syria were blocking this pipeline, and as a result the wars in Iraq and Syria broke out. The wars in Iraq and Syria also broke out to prevent the Shiite pipeline (green line), which would transport Iranian oil and natural gas to the Mediterranean Sea through Iraq and Syria (see my essay ‘The Energy War Between U.S.A. and Russia).

We therefore see that everything is almost the same. Serbia and Greece were blocking the Baghdad Railway in 1914, and Austro-Hungary declared war on Serbia in 1914, while in 2011 the Shiite Iraq and Syria were blocking the Qatar-Turkey pipeline and were promoting the Iran-Iraq-Syria pipeline, and the wars in Syria and Iraq broke out. Therefore the wars that broke out in Syria and Iraq in 2011, have a lot of resemblance to the Balkan Wars of 1912-1913.

The story is the same for Russia too. Russia has always been invading and controlling the countries around the Caspian Sea. This region was under Russian occupation during the Russian Empire era i.e. during the tsarist Russia, and nothing changed during the Communist era.

Former Soviet Union Map

Soviet Union

The Russian Communists kept the Caspian countries under Russian control until the fall of the Soviet Union, as you can see on the above map of the former Soviet Union. Actually the Caspian Region i.e. Kazakhstan, Turkmenistan, Uzbekistan, Azerbaijan, Kyrgyzstan, Tajikistan is comprised of 90% Muslim populations, which are much more similar to the Turks rather than the Russians who are Christians.

However Russia has always been the strongest country, she has been on the winning side in both World Wars, and therefore the oil rich Caspian region has always been under her control. The Communists, exactly like the tsarists, did not grant these countries independence because of the oil riches of these countries, which were very important for Russia’s energy security.

At the following Wikipedia link you can read how Russian Communists invaded Azerbaijan in 1920.

https://en.wikipedia.org/wiki/Red_Army_invasion_of_Azerbaijan

At the following Wikipedia link you can read how Russian Communists invaded Georgia in 1921.

https://en.wikipedia.org/wiki/Red_Army_invasion_of_Georgia

In section ‘Kazakhstan under Soviet Rule’ of the following Wikipedia link, you can read the following:

During the 1930s, many renowned Kazakh writers, thinkers, poets, politicians and historians were killed on Stalin’s orders, both as part of the repression and as a methodical pattern of suppressing Kazakh identity and culture”.

https://en.wikipedia.org/wiki/Kazakhstan#Kazakhstan_under_Soviet_rule

At the following Economist’s article about Central Asia titled ‘Stalin’s Harvest’, you can read the following:

After the October revolution of 1917, new autonomous republics were created. In 1924 Stalin divided the region into different Soviet republics. The borders were drawn up rather arbitrarily without following strict ethnic lines or even the guidelines of geography.

The main aim was to counter the growing popularity of pan-Turkism in the region, and to avoid potential friction. Hence, the fertile Fergana Valley (formerly ruled by the Khanate of Kokand) was divided between Kyrgyzstan, Tajikistan and Uzbekistan. Some of these borders were redrawn several times until 1936. After 1991, this led to lively demarcation disputes among the newly independent countries”.

http://www.economist.com/node/16377083

In the First World War for oil, the Russian tsar was trying to prevent the Germans from approaching Baku. In the Second World War for oil, the Russian Communists were again trying to prevent Hitler from getting the Baku oil. Note that the very rich oil reserves of Kazakhstan were discovered much later than the ones in Baku.

Today, in the Third World War for oil, after the collapse of the Soviet Union, Putin is trying to keep a firm hand on the Caspian countries, in order for Russia to have monopolistic power in the European natural gas markets (see my essay ‘The Energy War Between U.S.A. and Russia’).  Actually the war between Russia and Georgia and the war between Armenia and Azerbaijan were Russia’s revenge for the cooperation of Azerbaijan and Georgia with the Americans on the Baku-Ceyhan pipeline. To retaliate, the Americans supported the Chechens, and the Russian Chechen war broke out (see my essay ‘The Three Wars for the Baku-Ceyhan Pipeline’.

As you can read in the second half of following article of the Guardian, Vladimir Putin threatened the Kazakhstan sovereignty after the Kazakh President and dictator, Nursultan Nazabayev, threatened to quite the Eurasian Economic Union.

http://www.theguardian.com/world/2014/sep/01/kazakhstan-russian-neighbour-putin-chilly-nationalist-rhetoric

Here there is one more article on Putin’s pressure on Kazakhstan.

http://www.eurasianet.org/node/69771

In the First World War for oil in 1914, Russia was on the side of the country that had the advantage in the seas i.e. Great Britain. In the Second World War for oil in 1939, the Russians were initially on the German side, that is on the side of the country that had the geographical advantage, with the famous Nazi-Communist alliance which came into effect with the Molotov-Ribbentrop Pact in 1939, according to which the Nazis and the Communists were splitting Eastern Europe into zones of influence. For the Molotov-Ribbentrop Pact see the following Wikipedia link.

https://en.wikipedia.org/wiki/Molotov%E2%80%93Ribbentrop_Pact

For the Nazi-Communist alliance you can also read the following link of Encyclopaedia Britannica. In the third paragraph you can read the following:

To this public pact of nonaggression was appended a secret protocol, also reached on August 23, 1939, which divided the whole of eastern Europe into German and Soviet spheres of influence”.

http://www.britannica.com/EBchecked/topic/230972/German-Soviet-Nonaggression-Pact

In the first paragraph of the same Britannica link, you can also read the following:

The Western democracies’ hesitance in opposing Adolf Hitler, along with Stalin’s own inexplicable personal preference for the Nazis, also played a part in Stalin’s final choice”.

Therefore one should not be misled to think that the Russian Tsars or the Russian Communists were better than the Americans or the British. They were simply located next to the richest region in oil and natural gas reserves in the world. And Russia has many more oil and natural gas reserves than the Caspian ones. Russia is the richest country in the world in terms of natural gas reserves, and one of the richest countries in the world in terms of oil reserves. Please note that the countries with the richest reserves are not necessarily the ones with the largest production, since production also depends on technology and other factors.

Today, in what I call the beginning of the Third World War for oil, Russia is closely working with China, that is with the country that has the geographical advantage, and not with U.S.A. which is the country that dominates the seas.

The Famous Phrase ‘History is Repeating Itself’

When examining the First World War for Oil, and comparing it with the oil wars of 2014, one tends to think about the very famous phrase which says that history is repeating itself. We have heard this phrase so many times that it is very difficult to examine the oil wars without thinking about it.

However this is a very silly phrase which is used all the time by the so called intellectuals. In reality it is not history that is repeating itself, but rather the Persian Gulf and the Caspian Sea remaining the richest regions in the world in terms of oil and natural gas reserves. From the beginning of the 20th Century, when oil replaced coal, the Persian Gulf and the Caspian Sea became the heart of the world economy.

On the following map it can be seen how small this region is in comparison to the whole world. When it is taken into account that this region holds between 50-65 per cent of the world’s oil and natural gas reserves, it is no surprise that people have been, and will keep killing each other around it.

persian caspian

World Map

This will not change, unless huge amounts of oil and natural gas reserves are found somewhere else, or until oil and natural gas are replaced by some other form of energy. Therefore the phrase “history keeps repeating itself” must be replaced by the phrase “the Persian Gulf and the Caspian Sea remain constant”.

The reason witticisms of the “history repeating itself” kind are always popular, is because intellectuals do not want to explain to us what is really happening. And one wonders why this is so, why is it that intellectuals never help us think?

Murray Rothbard used to say that it is the responsibility of the intellectuals to convince us that we need all these bureaucrats. I think he is right. The responsibility of the intellectual is not to help us think, but rather to convince us that we need the bureaucrats, because as Murray Rothbard used to say, intellectuals have a special relationship with the state, and most of the time they are directly financed by the state. Therefore their job is to convince us that we cannot live without their employer, and they are very good at it.

It is therefore very natural that intellectuals do not help us think, because that’s not at all their job. Nowadays everybody seems to wonder where were the intellectuals before the economic crisis? How could the intellectuals let us fall into this crisis? However this is again a very silly question. This crisis occurred exactly because the intellectuals did their job very well, and they convinced us that we needed their employers i.e. all these bureaucrats. This is how this crisis came about as I explain in my essay ‘The Socialist Myth of Economic Bubbles’.

Ayn Rand used to say it should not be expected from intellectuals to be ideologically independent since they are financially dependent on the state and the bureaucrats. However the internet is changing all that. With the internet we, the intellectual off springs of Murray Rothbard and Ayn Rand, can attack the intellectuals. And they know that they do not have the arsenal to confront us, that’s why you already hear socialist countries planning to build their own internet networks. Russia and Latin America want to build their own internet networks, and China does not allow its citizens to use the internet.

Most socialists and intellectuals support such decisions. The reason is not that they are afraid of espionage as they say. The reason is that they know that they cannot confront us in the age of the internet. It is like a race. We have to finish them off before they have the time to unplug us. And we have to do it not only because it is in our interest to do so, but also because it is extremely fun.

The problem is that the first flames of the Third World War for oil are already here, and war is always the best excuse for statists and socialists to take total control of a country. It is the best excuse for the state to take over everything. It was with the First World War that American statists destroyed the American liberal economic model of the previous centuries and introduced the socialist ideals.

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Ayn Rand on Oil Monopoly

Iakovos Alhadeff 

Journalist: You do not believe in government intervention. You believe in the free market. Do you therefore believe that the oil rich countries, which have monopoly power in the oil market, should be able to sell their oil to us at any price they wish?

Ayn Rand: Not at all. I believe exactly the opposite. These countries have monopoly power because we allowed them to steal oil that belonged to American companies, we allowed them to steal our oil. That’s how they obtained monopoly power.

Journalist: What do you mean by ‘our oil’? We do not own Saudi Arabia or Iran.

Ayn Rand: Of course it was our oil. American companies owned the oil facilities by contracts. These countries broke these contracts by literally killing us, and nationalized what was the property of American companies. That’s how they obtained monopoly power.

The oil was there for centuries and they were not able to do anything with it. They asked for our help, they signed contracts, and then they attacked us and stole our property.

Journalist: Do you suggest that we should have used force to prevent them from nationalizing the oil facilities?

Ayn Rand: Of course we should have. They were not even capable of running our facilities and they had to hire Americans to do so. They were primitive societies that could have not done anything with their oil without our help.

Note! I lightly changed the conversation to make it a bit shorter, but I did not change at all the Ayn Rand spirit. You can see the full interview at the following link.

https://www.youtube.com/watch?v=rydsea_Y8xI

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The Israel-Egypt-Jordan Natural Gas Agreement and the July 2014 War in Gaza

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Iakovos Alhadeff

The following Financial Times article of 21st Mai 2014, reported that Israel was very close to signing agreements with Egypt and Jordan for exporting Israeli natural gas to these countries, from Leviathan, Israel’s largest natural gas field.

http://www.ft.com/intl/cms/s/0/02ea38aa-e0e2-11e3-a934-00144feabdc0.html?siteedition=intl

(you can click on the picture to enlarge it)

Israel Egypt Jordan PA

At the following article of Haaretz, which is as you can see at the following Wikipedia link, Israel’s oldest newspaper, and its English version is published with the New York Times,

http://en.wikipedia.org/wiki/Haaretz

it was reported on 30 June 2014 that Israel did finally sign an agreement to export to Egypt 30 billion dollars of natural gas in the next 15 years. That is 2 billion dollars of natural gas each year, and it amounts to 20% of Leviathan’s capacity.

http://www.haaretz.com/business/.premium-1.601980

At the following article of the Times of Israel, an electronic newspaper that is published in 3 languages, it was reported on 3 September 2014, that Israel did finally sign an agreement to export to Jordan 15 billion dollars of natural gas in the next 15 years.

http://www.timesofisrael.com/israel-signs-15-billion-gas-deal-with-jordan/

What happened in the time between the Financial Times article on 21 Mai 2014, which reported that Israel was close to signing the agreements and the Haaretz article on 30 June, which reported the actual 30 billion dollar agreement between Egypt and Israel?

Well what happened is that the 3 Israeli teenagers were abducted by Hamas on 12 June 2014, as you can read at the first line of the following Wikipedia link, in section “Immediate Events”.

http://en.wikipedia.org/wiki/2014_Israel%E2%80%93Gaza_conflict#Immediate_events

At the first paragraph of the following Wikipedia link, you can read that on 7 July 2014, one week after the agreement between Israel and Egypt, Hamas took responsibility for the teenagers’ abductions and at the same time it launched 40 rockets to Israel. One day later, on the 8 July 2014, the Israeli army entered Gaza.

http://en.wikipedia.org/wiki/2014_Israel%E2%80%93Gaza_conflict

It is well known that Hamas is funded by Qatar. Hamas won the elections in 2006 by providing financial help to the people of Gaza. In a sense Qatar bought a military camp at the Israeli borders. Qatar is the 3rd richest country in the world in terms of proven natural gas reserves, after Russia and Iran, and could have easlily provided the natural gas to Egypt and Jordan instead.

One of the main reasons that Qatar funded and wholeheartedly supported  the Muslim Brootherhood candidate in Egypt, Muhammad Morsi, is that if Morsi was in power he would have never made a deal with Israel, since the Muslim Brotherhood is supported by Qatar.

At the following Wikipedia link, section ‘Aftermath’, 2-3 lines before the end of the section, where the consequences of the Arab Spring on the Egypt-Israel 1978 Peace Agreement are examined, you can read that the deputy chief of the Muslim Brotherhood said that the Brotherhood does not recognize Israel’s right to exist.

http://en.wikipedia.org/wiki/Egypt%E2%80%93Israel_Peace_Treaty#Aftermath

At the following BBC article you can read how much Qatar supported the Muslim Brotherhood and its candidate Morsi. In the 6th and 7th paragraph you can read that Qatar did not give all that money for nothing, but instead to make sure that Egypt would buy natural gas from Qatar. I copy these two paragraphs.

“….But this was not a charitable giveaway. It was in the nature of an investment. A Qatari economist told the BBC: “We couldn’t stand by and let Egypt collapse”, but the billions came with an expectation – “I’ll give you the money, show me the outcome,” he said.

The Qataris had already secured a lucrative deal to sell their gas to the Egyptians and they were proposing to heavily invest in the redevelopment of the Suez Canal…”.

http://www.bbc.com/news/world-middle-east-23185441

Many socialists that are financed by Qatar say that the Brotherhood was democratically elected. As you can read in the 3rd paragraph of the following Wikipedia link, as soon as he was elected, Morsi started changing the law to rule as a dictator. I copy from the link.

“…As president, Morsi granted himself unlimited powers and the power to legislate without judicial oversight or review of his acts….”

http://en.wikipedia.org/wiki/Mohamed_Morsi

Moreover you can read at the following Haaretz article that the Israelis have agreed to sell to the Palestinian Authority in West Bank 1.2 billion dollar in natural gas. But this is a small amount compared to the 45 billion dollar deals with Egypt and Jordan, and Qatar would have not probably minded. As you can see the deal was singed in January 2014 and there was no war in Gaza. It was before the agreements with Egypt and Jordan that the war broke out. Nobody starts a war for 1.2 billion dollars.

http://www.haaretz.com/business/1.567216

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