If You Wondered Why Energy Independence Is Important

The Wall Street Journal posted an article yesterday about the drone attack on Saudi oil fields. The Iran-allied Houthi rebels in neighboring Yemen have claimed credit for the attack.

The article reports:

The production shutdown amounts to a loss of about 5.7 million barrels a day, the kingdom’s national oil company said, roughly 5% of the world’s daily production of crude oil.

Officials said they hoped to restore production to its regular level of 9.8 million barrels a day by Monday. Energy Minister Prince Abdulaziz bin Salman said lost production would be offset through supplies of oil already on hand.

The strikes mark the latest in a series of attacks on the country’s petroleum assets in recent months, as tensions rise among Iran and its proxies like the Houthis, and the U.S. and partners like Saudi Arabia. The attacks could drive up oil prices if the Saudis can’t turn production back on quickly and potentially rattle investor confidence in an initial public offering of Saudi Aramco, the national oil company.

The article concludes:

The Yemen war is a central front in a new and more aggressive foreign policy overseen by Prince Mohammed, who launched the intervention with a coalition of allied states in 2015. Under the prince’s watch, the kingdom also applied a blockade on neighboring Qatar, detained Lebanon’s prime minister, and sent a team of men to kill exiled journalist Jamal Khashoggi in Istanbul in 2018.

A conservative kingdom with a Sunni Muslim majority, Saudi Arabia has been an opponent of Iran in a struggle for power across the broader Middle East since the 1979 revolution that toppled Iran’s monarchy.

The attacks on Aramco’s facilities are poorly timed for Aramco’s coming IPO and pose a challenge to oil officials after a changing of the guard in their leadership. Aramco last week picked seven international banks to help it list on Saudi Arabia’s domestic exchange, an IPO that could value the company at about $2 trillion dollars and come before the end of the year.

There are a lot of things going on behind the scenes here. This is part of the conflict between Sunni and Shiite Muslims. At their core, both the Saudis and the Iranians want to bring back the former caliphate. The Ottoman Empire (which was that caliphate) existed until the early 1900’s. Many Muslims want that Empire restored. The argument is over who will rule the caliphate when it is established. Al Qaeda and the Muslim Brotherhood are players in this conflict, as is ISIS. Jamal Khashoggi was a part of the Muslim Brotherhood. Descriptions of him as simply a journalist were misleading. Another part of this puzzle is the fact that Saudi Arabia is drawing closer to aligning with Israel because of the fear of a nuclear Iran. That also would be a cause for increased aggression from Iran.

Generally speaking, any terrorism that goes on in the Middle East can be traced back to Iran. They have been training and funding terrorists since the Iranian Revolution in 1979.

I have no idea what impact this will have on world oil prices. I do know that Saudi Arabia will work to repair the damage as soon as possible. I have no doubt that Iran is violating the sanctions on its oil exports, so if the price of oil rises significantly, Iran may be able to pull itself out of its current economic difficulties and calm its population. America will continue to prosper as oil prices rise because we are now a net exporter of oil rather than a net importer. Because of the policies of President Trump, we are in a very different situation than we were during the oil crisis of the 1970’s.

An Obvious Solution That Should Have Been Implemented Years Ago

Reuters is reporting today that President Trump and Saudi King Salman have agreed to support safe zones in Syria and Yemen.

The article reports:

The White House statement said the two leaders also agreed on the need to address “Iran‘s destabilizing regional activities.” SPA confirmed the report but made no specific mention of Iran.

Both countries share views about Iranian policies in the region, the Saudi source said, suggesting Trump agreed with Riyadh’s suspicion of what it sees as Tehran‘s growing influence in the Arab world. Iran denies it meddles in Arab countries.

The White House statement said the two also discussed what it called an invitation from the king for Trump “to lead a Middle East effort to defeat terrorism and to help build a new future, economically and socially,” for Saudi Arabia and the region.

The two also discussed the Muslim Brotherhood, the senior Saudi source said, adding in a reference to the late al Qaeda leader, “it was mentioned that Osama bin Laden was recruited at an early stage” by the organization.

This is the right solution to the refugee problem, but it is not a perfect solution. There is no perfect solution. The Islamic culture in the Middle East is one of violence and cruelty. Western civilization does not condone pedophilia, the subjugation of women, or honor killing. These are things that have been happening in the Arab countries in the Middle East for a long time.  I wonder what will be necessary to keep the safe zones safe. One of the ideas in setting up safe zones is that when the violence ends, people can go back to their home countries and rebuild. I am not convinced that the violence will end. Iran’s goal is to set up a world-wide caliphate with Shiite Muslims ruling. Saudi Arabia is Sunni Muslim and will never agree to that. Isis is largely composed of Saddam Hussein‘s old political allies, also Sunni  Muslim–a group known for its violence and cruelty. The battle between the Sunnis and Shiites has waged for a long time, and I am not optimistic about it ever ending. I am also concerned that the dictators in control in the areas the refugees are fleeing have killed any potential leaders they saw as a threat to their power.

This is a better solution than sending the refugees to places where the culture is totally alien to what they are used to. Europe has experienced a wave of crimes against women because of the number of Middle Eastern migrants that have entered the continent. Germany, in particular, has had to change the rules for public swimming pools, music festivals, and other celebrations. Things that are acceptable in Muslim cultures are simply not acceptable in western culture. That is something we need to consider when we discuss how to help the refugees from the Middle East.

 

The Importance Of Preventing A Nuclear Iran

The 47 Republican Senators who signed the open letter stating that the Senate needs to ratify any treaties that will be binding on the next administration are not the only people worried about Iran obtaining nuclear weapons. On Wednesday The Wall Street Journal reported that Saudi Arabia has signed a nuclear cooperation agreement with South Korea.

The article explains the consequences of Iran going nuclear:

That agreement, along with recent comments from Saudi officials and royals, is raising concerns on Capitol Hill and among U.S. allies that a deal with Iran, rather than stanching the spread of nuclear technologies, risks fueling it.

Saudi Arabia’s former intelligence chief, Prince Turki al-Faisal, a member of the royal family, has publicly warned in recent months that Riyadh will seek to match the nuclear capabilities Iran is allowed to maintain as part of any final agreement reached with world powers. This could include the ability to enrich uranium and to harvest the weapons-grade plutonium discharged in a nuclear reactor’s spent fuel.

Several U.S. and Arab officials have voiced concerns about a possible nuclear-arms race erupting in the Middle East, spurred on by Saudi Arabia’s regional rivalry with Iran, which has been playing out in Syria, Iraq, Lebanon and Yemen in recent months.

Essentially, if the Shiite Muslims have a bomb, the Sunni Muslims also want a bomb.

The article further reports:

A U.S. diplomatic cable from December 2007, published by WikiLeaks, quoted Pakistan officials saying it was “logical for the Saudis to step in as the physical ‘protector’ ” of Sunni countries in response to the threat posed by Iran, a Shiite-majority nation. Saudi Arabia, unlike Egypt, another Arab power, has the finances to develop a nuclear-weapons arsenal, the Pakistanis argue.

Evidently the Saudis have no more confidence in the Obama Administration’s ability to negotiate a treaty with Iran that will actually stop their nuclear program than the 47 Senators who signed the letter. I think the fact that the Saudis are pursuing an atomic bomb of their own tells us all we need to know about the treaty President Obama is negotiating.