‘Trump understands that a war is a catastrophe’ — what conflict of USA and Iran means for Russia

Realnoe Vremya’s experts on Iran’s no chances in the fight with America, reasons for the Republicans’ zeal for war and forecasts for oil prices

The recent events prove that Washington and Tehran are about declaring an all-out war than ever before. Oil prices reacted to the situation with a sudden rise and a quick fall. Realnoe Vremya’s experts shared opinions about if the conflict would have a lasting influence on oil rates, how it might affect Russia and who benefited from this war nowadays — Trump in the light of the presidential election and to distract the attention from the impeachment, Iran with violent street riots late last year suppressed by authorities or oil countries for the sake of high black gold rates?

Killing of American contractor and Iranian general

The sluggish opposition between the USA and Iran, which has been smouldering for these years (from Obama to Trump inclusively) has grown into a real military conflict in the last weeks. Formally, it began with the death of an American citizen last year — a representative of one of the US contractors in the region and four militaries in Kirkuk as a result of attacks of the Shia group Kata'ib Hezbollah on Iraqi bases. In response, American unmanned vehicles attacked members of this group. And soldiers of al-Hashd ash-Shaʿbi movement were killed on the last day during protests after the burial of some members of Kata'ib Hezbollah — the protesters seized the main gates of the US Embassy in Baghdad near the “green zone” of the Iraqi capital where diplomatic missions and governmental institutions are located.

The US authorities criticised this severely and killed very influential Iranian General Soleimani who was considered as primary responsible person for what happened and a “terrorist”. Iran (a Shia country), in turn, called the USA’s strikes on the Iraqi militia nastiness and promised a brutal retaliation for Soleimani’s killing whose burial couldn’t help but have victims among the Iranians themselves already. And it replied with missile attacks on American bases on the territory of Iraq on 8 January and included the “green zone” of Baghdad too.

Iran (a Shia country), in turn, called the USA’s strikes on the Iraqi militia nastiness and promised a brutal retaliation for Soleimani’s killing whose burial couldn’t help but have victims among the Iranians themselves already. Photo: epa.eu

Fallen plane, oil for $70 per barrel and Trump’s statement

During the conflict, a Ukrainian plane unexpectedly crashed too, 176 people died, the causes of the catastrophe are examined, but the Embassy of Ukraine in Tehran first wrote on Facebook that the version of a terrorist attack or missile attack was excluded and then deleted its message a couple of hours later. All this was accompanied by requirements of the Iraqi authorities, which criticised the first attacks on the Shia group), for the Americans to leave their country, street riots in Iran itself, which Tehran authorities were dispersing in their country, and pre-electoral domestic political conflicts in the USA with the impeachment process full steam and preparing for the presidential election. Oil suddenly went up in price to $70 per barrel against this backdrop and cheapened again to $65.

President Donald Trump noted on 8 January: “Iran appears to be standing down, which is a good thing for all parties concerned and a very good thing for the world”, which seems to give to understand that there wouldn’t be return strikes. And on 9 January morning, the USA even said in the UN Security Council about their readiness for talks with Iran. At the same time, the permanent ambassador of Iran to the UN already denied the proposal of the USA for cooperation.

“Iran has no chance, it can only provoke the USA”

Nobody needs a conflict, but there is still potential for an all-out war, and everything is leading to such an outcome — though the sides are afraid of a war, nobody is doing anything at the moment to avoid it, political expert, ex-Editor-in-Chief at Political News Agency and Russian Magazine, Senior Lecturer of the Faculty of Philosophy at Moscow State University Boris Mezhuyev thinks:

“Tightening American sanctions will in the end lead to a collapse of the Iranian economy, and they have, indeed, already been very severe for Iran. And as Iran isn’t able to suppress the aggression of neighbouring countries — the same Saudi Arabi — Iran has no chance, it can only provoke the USA pushing it to a war, probably understand the unwillingness of the American voter to see his president as the initiator of a new war in the pre-electoral year. The situation so far is tense, the de-escalation is purely virtual — the sides have just postponed the exchange of strikes,” the expert shared his opinion with Realnoe Vremya.

According to him, though neither is it profitable to wage war for Trump because in this case he can lose the presidential election. However, the American president is a captive of his own party, which is completely controlled by Neo-Conservatives, “all doors for the Proto-Israeli and Saudi lobby are open”. Mezhuyev believes that this huge money is spent on Republican senators’ electoral campaign. And the neocons’ party defends their interests. The Democrats threated Trump with impeachment, and today he “literally depends on the Republicans’ loyalty, while their loyalty is limited”.

“Trump has to act as his party, while the party wants a war”

“Also, [Trump’s ex-adviser in national security] John Bolton is going to testify in the impeachment inquiry in the Senate and can provide some deadly information about Trump proving the accusation. This is why Trump has to act as his party, while the party wants a war. Why? Because it is full of money, forces interested in weakening Iran as much as possible, and these forces understand that there will never be such a manageable and controlled president. This is why they are pushing on Trump. And as soon as Trump got rid of Bolton, who was the key lobbyist of the war with Iran, the impeachment inquiry was held a week later. It is hard to imagine it is a coincidence,” the political expert thinks. “But Trump subjectively understands that a war is a catastrophe. He is between a rock and a hard place: the Scylla of popular discontent and Charybdis of a fronde in the party, which can easily replace him for [vice president] Michael Pence by one voting in the Senate.”

Nowadays Russia, of course, is skimming the cream of this conflict, Boris Mezhuyev believes given Turkish Stream, improvement in relations with Ankara and oil prices, which though collapsed on 8 January. But he is convinced that they will go up in the near future. Amid the conflict, Putin “looks like the personification of rationality, moderation and pragmatism in the modern world where Shakespeare-style passion is taking place”.

Nowadays Russia, of course, is skimming the cream of this conflict, Boris Mezhuyev believes given Turkish Stream, improvement in relations with Ankara and oil prices. Photo: kremlin.ru

“But the problem is that globally the war between the USA and Iran is the disruption of all the foundations of Middle Eastern stability. It is a lasting war with unpredictable consequences, including refugees, the spread of weapons of mass destruction and terrorism. A huge number of problems in the Middle East has been to a certain extent suppressed thanks to Iran’s stance, thanks to it too the Islamic Kalifate was destroyed. The destruction of such a factor as Iran is a big destabilising step with consequences for the whole Eurasian continent. This is why all rationally thinking forces including in America understand that this conflict must stop by all means,” the expert supposes.

Oil prices to soar if sides close Persian Gulf

The conflict will certainly have lasting consequences on oil rates, but only if gets worse so much that the warring sites will close the traffic of tankers in the Persian Gulf, which will have a strong impact on the oil industry because almost 30% of all world oil goes through the Persian Gulf, considers partner of RusEnergy consultancy, expert in Eastern studies, analyst of the oil and gas sector Mikhail Krutikhin.

“In our case when there was a sudden rise in oil price and an immediate fall, it was a game in the financial market, which has nothing in common with the balance of supply and demand. Owners, futures traders, which is ‘paper oil’, reacted to it. And when the prices soared under the influence of a psychological factor, the traders simply made a profit [by selling the papers] and are keeping making it, that’s why the prices are reducing,” the analyst explained to Realnoe Vremya.

In his opinion, the conflict is profitable for Russia only in the short-term, again, if oil prices really go up under the influence of the military and political situation in this region. But it is absolutely unprofitable in the long-term either for us or other oil countries because as soon as the prices exceed $100-150 per barrel, all oil consumers will immediately start looking for alternative energy resources and develop them, “and for Russia, this will turn out a very negative result in the long-term”.

“The disappearance of Iran from the world oil market has already been calculated in all rates”

“Iran itself, of course, has a lot of oil reserves, it ranks fourth in oil volumes, but even if Iran exports oil today, it does it as counterfeit and in small volumes because of the American embargo on Iranian oil works. Iran can’t influence the oil market: the disappearance of Iran from the world oil market has already been calculated in all rates, Iran doesn’t exist today as an exporter,” Mikhail Krutikhin believes.

At the same time, the analyst supposes that the current crisis will unlikely seriously influence the economy of the other side:

“Even if oil prices keep going up, the USA will produce more shale oil and other energy resources. The effect of the current conflict with Iran on America’s energy sector is minimal nowadays,” Krutikhin concluded.

By Sergey Ivanov