Geopolitical Report ISSN 2785-2598 Volume 17 Issue 6
Author: Silvia Boltuc
The Ukrainian crisis, which was supposed to represent the collapse of the Russian economy and its leading role in Eurasia, is having unexpected implications. The sanctions imposed on Moscow’s energy supplies have caused oil prices to rise and an urgent need for new gas suppliers for Europe and created opportunities for Persian Gulf countries. Skyrocketing oil prices favour exporting countries in the Middle East, which have gained significant geopolitical leverage vis-à-vis the West.
After President Joe Biden announced a ban on Russian oil and gas exports due to the Ukrainian military operation, oil and gasoline prices rose dramatically, and Europe risked not having enough gas to fit internal demand.
The United States President reached out to Gulf countries to provide some help amid rising energy prices. Persian Gulf monarchies have responded that they will not help ease surging oil prices unless Washington supports them in Yemen. Relations between the U.S. and Saudi Arabia have chilled under the Biden administration. Riyadh is concerned about the revival of the Joint Comprehensive Plan of Action (JCPOA) and the proxy war in Yemen. The U.S. did not support Saudi intervention in the Yemeni civil war and refused to add Houthis (Islamist political and armed movement, predominately Zaidi Shia, active in Yemen) to their list of terrorist groups. During its election campaign, Biden affirmed its willingness to turn the Kingdom into a pariah state due to its worrying violations of human rights. Moreover, under Biden’s administration, C.I.A. released files that involved the leadership of Saudi Arabia in the Khashoggi murder, worsening the relationship between the two countries.
In order to contrast the surge in energy prices, the U.S. has opened up diplomatic channels with Venezuela, which has the world’s largest oil reserves and is probably pushing for the restoring of the JCPOA to open up also to Iran, as an energy-reach country that might contribute in supplying energy to the West. However, cooperation with these countries could be more difficult than expected. Iran, Iraq, Kuwait, Saudi Arabia, the United Arab Emirates and Venezuela are all OPEC + members together with Russia and are strongly committed to the format and refused to betray Russia (it is not a coincidence that Germany reached out to Qatar for energy cooperation as the country left the Opec format years ago). As evidence, OPEC + declined to increase oil production despite Western requests. It is essential to underline that all the oil and gas producer countries are benefiting from the rise in prices, and they will not give up this unexpected geopolitical lever they gained in the short term.
Ukraine conflict and Tehran’s opportunities
Iran might play a significant role in this scenario. Tehran has experienced the hardness of life under sanctions imposed by the United States, bringing the country closer to the current Russian situation. The Islamic Republic has increasingly shown its willingness to deal with regional issues without the interference of foreign powers.
Remarkably, Iranian Oil Minister Javad Ouji affirmed that thanks to the Anti-Sanctions Headquarters and the leaders of the three government branches, once the Raisi administration took office, the country mobilised all its capabilities to sell Iranian oil and gas. As a result, gas condensate exports have tripled and even quadrupled in some months. Furthermore, the price of oil has risen to an unprecedented level in the last month or two, and all this has led to an improvement in the country’s hard currency revenues. In addition, the parties involved in the Vienna talks seem confident that the nuclear deal will be finalised soon, and in the aftermath of the Ukrainian crisis, Iran might become a precious European energy supplier. A different approach by the Western world towards Iran is proved by the Biden administration pursuing the restoring of the deal and by some agreements recently signed by European actors. In fact, the Micro Electronics Research Center of Iran (MERDCI) has signed a memorandum of understanding (M.O.U.) with the German firm Dr Hegenbart Unternehmensberatung GMBH & Co. to cooperate in the manufacturing of solar panels and modules.
Biden, perhaps in a short-sighted way, has cooled relations with some powers in the Gulf, such as Saudi Arabia, carrying out an electoral campaign based on human rights. If the recognition of the Armenian genocide has angered Turkey, the accusations against the Saudi Kingdom regarding the Kashoggi murder and the lack of support for interventions in Yemen have angered Riyadh. The same sentiment is shared by Iran and Venezuela, who have lived under U.S. sanctions for years. What is the fil rouge that binds all these countries?
They are all members of OPEC +, and most of them are allies of Russia and have shown their closeness to Moscow even after the intervention in Ukraine. Even more, the double standard applied to Ukrainian migrants and the war in Ukraine compared to the disregard for humanitarian crises in the Arab world have exacerbated the positions of these countries against the West. Finally, the United States, with the withdrawal of troops from Iraq following those from Afghanistan, have progressively reduced their presence in the Gulf, where alliances are no longer as strong as they used to be. Iran’s positions in the Gulf are also tightening up. The Commander of the Islamic Revolutionary Guard Corps (IRGC) Navy, Rear Admiral Alireza Tangsiri, recently stressed that Muslim countries of the region are capable of ensuring security in the Persian Gulf and trans-regional forces should leave the region as soon as possible. All these economies coming together, no longer dependent on the Western world, might represent a threat to its leadership and could reduce some of the effects of the sanctions.
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