09 October 2015

Putin's Complex Strategy

A good friend of mine told me that my post on Putin doubling down on energy was way off the mark.

I was touched. Slamming this blog is my friends' way of telling me that they read the stuff.

"If we were to believe your stupid pipeline theories" he said, "Putin propping up Assad would mean helping Iran to get its natural gas to Europe through Syria. Have you forgotten the Shia pipeline?"

On the face of it, he seems to have a point.

If, as I claimed, Putin's aim was to stop the Qatar natural gas pipeline from reaching Europe, keeping Assad in power is tantamount to permitting the so called Islamic Pipeline (or the  Shia Pipeline) project to go through. As you know, that undertaking was dubbed the Shia pipeline as it was supposed to link Iranian natural gas to Europe through Iraq and Syria (and then Italy or Spain through the Mediterranean Sea).

True that.

But, Putin's game plan is a little more complicated than that.

Sunni vs Shia Pipeline

I suspect his premise is that there is no way to stop a natural gas pipeline from reaching Europe. Either North Dome side (Qatar) or South Pars side (Iran) will find a way to get it to Europe and therefore compete with Russia in that market.

But the two sides are nor equal.

Qatar has already financed a band of murderous thugs to establish an oppressive Salafist state over a huge swath of territory in Iraq and Syria. ISIS has been very successful in attracting misguided second generation Muslims from all over the world to become the citizens subjects of a modern-day Caliphate and to swell the ranks of its terrorist army. Besides a feared army, with a little help from Saddam's former officers, they built a state apparatus and a reasonably functioning administrative structure.

They are now ready for Qatar's Sunni gas pipeline to Europe.

From an economic vantage point, Qatar has gazillions of dollars for a large pipeline network and it has already invested in very sophisticated extraction, storage and liquefaction equipment. The cost of the pipeline is chump change to them. Once the dust settles, they can build it quickly.

If you look at the Shia side of the equation, the picture is pretty dismal. The only decent fighting Shia force in the region is the Hezbollah. They may be a formidable force but they are puny compared to the ISIS battalions. And they are not as well equipped nor as ruthless. There is also Assad's dwindling army but they are barely capable of defending a small region and without serious outside help they would have folded a long time ago.

Economically, Iran's oil and gas infrastructure is outdated and in dire need of an overhaul. But they are unable to do that as the sanctions left their economy in shambles. Estimates to bring their current infrastructure to modern standards range from $100 billion to $200 billion. But I suspect the real figure is much higher.

From Putin's perspective this means that, even if the sanctions were lifted today and Iran somehow managed to borrow this amount, it would still take several years for them to ramp up their production.
Tehran has raised the stakes by declaring that it is ready to sell gas to Europe. While Russian analysts concede that this will eventually be a threat to Russia, they believe Iran will need up to a decade to prepare.
Putin also knows that Russia can not put back Syria together. Actually, no one can. After years of unspeakable atrocities there is no way the Alewites, Sunni and Kurds can cohabitate in the same country.  As I stated over two years ago, this is a feature not a bug. So the partition is permanent.

With ISIS controlling more than half of Syria and with Assad barely hanging on, Russia had one play and that was to establish a strong military presence there. He did it quickly and brilliantly.

The move gives Putin many advantages.

Calling the Shots

The first one is to disrupt Qatar's natural gas pipeline plans by destabilizing ISIS and preventing it from establishing a permanent structure. The beauty of it is that, Russia does not even have to invoke any pretext, fighting against ISIS' black-clad merry beheaders is good enough reason in most settings.

Secondly, being in Syria is useful for putting regional powers in check. As I mentioned recently, both Turkey and Israel are seriously miffed about Russian presence and the limitations this imposes on their actions. But they are unable to do much about it. In one fell swoop, Russia has become a resident Middle Eastern super power.

Thirdly, having several large military bases in Assad's future and admittedly smaller Alewiteistan will turn Russia into the protector of the Islamic pipeline. No Russia, no Islamic pipeline.

I can't think of a better motivator for Iran to play ball with Russia.

And this is not a crude Mafia-type protection scheme. Putin has been working hard to convince Iran that Russia was on their side and could be an invaluable ally in their confrontation with the Sunni front. In that vein, Russia worked relentlessly to get a nuclear deal signed and to bring Iran in from the cold.
Russia was an enigmatic player in the Iran negotiations. Its negotiators surprised many Western colleagues with their tireless work and co-operation despite Moscow’s escalating stand-off with the West over Ukraine.
They did so even when everyone assumed they had so much to lose if Iran was back in energy markets:
Their devotion was all the more surprising given some Western officials believe Russia now stands to lose on all fronts from the resulting deal: as Tehran emerges from crippling sanctions, it may now drive oil prices lower and drop its partners in Moscow for new friends in the West.
Moreover, even before the nuclear deal was final, Russia, as this year's host of the Shanghai Cooperation Organization (SCO) Summit, announced that Iran was set to become a full member of SCO once the sanctions were lifted.

This is a big deal. The other regional power, Turkey, was never accorded more than observer status, despite repeated pleas from from its President.

In short, my friend's facetious disagreement notwithstanding, Russia's military build up in Syria was definitely part of Putin's strategy of doubling down on energy.

And it makes him the master of either pipeline. One might never be built because of Russia and the other might only be functional for as long as Russia allows it.

In that sense, if it all works out, Russia will have achieved what the US wanted to do when Bush and the neo-cons came up with their bogus excuse to invade Iraq, namely controlling a good chunk of the oil and gas distribution in the Middle East.

There is more.

Challenging NATO

On 6 October, the Commander of US Navy forces in Europe, Admiral Mark Ferguson gave a -what Foreign Policy called- "sobering talk" to the Atlantic Council (video link) explaining how Putin's policy of arming of outposts from the far North to Kaliningrad to Crimea and to Syria has created a serious problem for NATO.
Ferguson delivered a sobering talk, flagging the continued “snap exercises” by Russian ground forces and “large numbers of ships get[ing] underway with little or no notice,” as particular areas of concern for his command. Any future conflict with Moscow will likely be “very focused and happen rapidly on the flanks,” he said, with no time for the West “to build up and then execute.”
What he is saying that Putin changed current engagement rules by quickly building up military positions in many outposts that can strike. And NATO is scrambling to catch up.

The best example I can give you is the recent Russian jet incursions into Turkish airspace. They lasted a few seconds but they were not accidental or random. They tested Turkey's responses and its willingness to retaliate.

Turkey huffed and puffed. So did NATO. But there was never any doubt that Turkey would not escalate this into a serious crisis.
Turkey will not compromise on border security, but does not want Russian incursions into its airspace to escalate into a crisis with Nato, Prime Minister Ahmet Davutoglu has said.
With its actions on the ground Russia is conveying the message that it is now a regional super power. And there is little NATO or Sunni powers can do about it.

To reinforce this message, Russia took two other unexpected and perhaps more worrisome actions.

On October 7, the Russian navy struck targets deep in ISIS territory with its own cruise missiles. Apparently, this took the US analysts by surprised as they did not expect these missiles to have this kind of range.

For non-analysts like us this was remarkable for another reason. Take a look at the map. Do you see which countries these missiles have overflown?

Iran, Iraq, Syria.

Interestingly, when unnamed Pentagon officials claimed that some of these 27 cruise missiles actually crashed in Iran, Iranian officials were as quick and vehement as their Russian counterparts in denouncing these reports.
[C]onservative Iranian media described the reports of missiles landing in Iran as "psychological operations by the US against Moscow".

"Since Russia began its operations in Syria, Western media and officials have launched an all-out assault against Moscow," the Fars News Agency, thought to have close affiliations with Iran's Revolutionary Guards, said.
The second incident was Russian fighter jets shadowing American Predator drones on at least three separate occasions.
U.S. officials tell Fox News the drone encounters took place over ISIS-controlled Syria, including its de facto headquarters in Raqqa, as well as along the Turkish-Syrian border near Korbani. Another occurred in the northwest, near the highly contested city of Aleppo.

“The first time it happened, we thought the Russians got lucky. Then it happened two more times,” said one official.
Tellingly, this came about after John Kerry announced that the US was considering a no-fly zone in Syria, something Turkey has long wanted and the West has always resisted.

My guess is that the drone incident was Putin's response to Kerry's bluff. Instead of stating that Russia would not accept such an arrangement, its fighter jets indicated that a no-fly zone could easily lead to undesirable "accidents."

So today Kerry backtracked and told "his Russian counterpart Sergei Lavrov in a phone call that the two countries must move forward with technical talks on avoiding accidents in Syria."

In that regard, I would not take Erdogan's recent threats about buying natural gas elsewhere very seriously. Not only would Turkey not be able to switch suppliers that easily, as Russia provides 28-30 bcm of its 50 bcm annual consumption, its other major source of gas is Iran.

Which underscores the brilliance of Putin's strategy.


Speaking of Erdogan's gas threat:
Russian gas giant Gazprom said Wednesday its TurkStream pipeline project with Turkey would be delayed as tensions between Moscow and Ankara peak over Russia's intervention in the Syrian conflict.

"Given that there is no intergovernmental agreement, the timeframe will be postponed," Russian news agencies quoted Gazprom deputy CEO Alexander Medvedev as saying, referring to a deadline next year for building the first of four pipelines.
That is a "chin flick" if I ever saw one.

I stand corrected.

This is the chin flick.
Gazprom CEO Alexei Miller said on Thursday that an additional 3 bcm supply of gas to Turkey had been declined. 

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