Chinese/PRC announced that a pending oil and gas deal with Iran

09 May 2006 -- After Chinese President Hu Jintao's visit to Seattle
and the USA, he immediately went to Saudi Arabia for a three-day
state visit where he signed trade, defense and security agreements.
This is no small slap in the face to Washington by the
traditionally "loyal" Saudi royal house.

Hu signed a deal for Saudi Basic Industries Corp (SABIC) of
Saudi Arabia to build a $5.2 billion oil refinery and petrochemical
project in northeastern China. At the beginning of this year, Saudi
King Abdullah was in Beijing for a full state visit.

Since the Franklin D Roosevelt-King Ibn Saud deal giving US
Aramco and not the British exclusive concession to develop Saudi oil
in 1943, Saudi Arabia has been regarded in Washington as a core
strategic sphere of interest.

Hu then went on to Morocco, Nigeria and Kenya, all regarded as
US spheres of interest. And only two months ago Rumsfeld was in
Morocco to offer US arms. Hu is offering to finance energy
exploration there.

The SCO and Iran Events

The latest developments surrounding the Shanghai Cooperation
Organization (SCO) and Iran further underscore the dramatic change
in the geopolitical position of the United States.

The SCO was created in Shanghai on June 15, 2001, by Russia and
China along with four former Soviet Central Asian republics,
Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Prior to
September 11, 2001, and the US declaration of an "axis of evil" in
January 2002, the SCO was merely background geopolitical chatter as
far as Washington was concerned.

Today the SCO, which has to date been blacked out almost
entirely in US mainstream media, is defining a new political
counterweight to US hegemony and its "unipolar" world. At the next
SCO meeting on June 15, Iran will be invited to become a full SCO
member.

And last month in Tehran, Chinese Ambassador Lio G Tan announced
that a pending oil and gas deal between China and Iran was ready to
be signed.

The deal is said to be worth at least $100 billion, and includes
development of the huge Yadavaran onshore oilfield. China's Sinopec
would agree to buy 250 million tons of liquefied natural gas over 25
years. No wonder China is not jumping to back Washington against
Iran in the United Nations Security Council. The US had been trying
to put massive pressure on Beijing to halt the deal, for obvious
geopolitical reasons, to no avail. Another major defeat for
Washington.

Iran is also moving on plans to deliver natural gas via a
pipeline to Pakistan and India. Energy ministers from the three
countries met in Doha recently and plan to meet again this month in
Pakistan.

The pipeline progress is a direct rebuff to Washington's efforts
to steer investors clear of Iran. Ironically, US opposition is
driving these countries into one another's arms,
Washington's "geopolitical nightmare".

At the same SCO meeting next month, India, which Bush is
personally trying to woo as a geopolitical Asian "counterweight" to
China, will also be invited to join the organization, as well as
Mongolia and Pakistan. The SCO is gaining in geopolitical throw-
weight quite substantially.

Iranian Deputy Foreign Minister Manouchehr Mohammadi told ITAR-
Tass in Moscow last month that Iranian membership in the SCO
could "make the world more fair". He also spoke of building an Iran-
Russia "gas-and-oil arc" in which the two giant energy producers
would coordinate activities.

US out in Cold in Central Asia

The admission of Iran into the SCO opens many new options for
Iran and the region. By virtue of SCO membership, Iran will now be
able to take part in SCO projects, which in turn means access to
badly needed technology, investment, trade and infrastructure
development. It will have major implications for global energy
security.

The SCO has reportedly set up a working group of experts ahead
of the June summit to develop a common SCO Asian energy strategy,
and discuss joint pipeline projects, oil exploration and related
activities. Iran sits on the world's second-largest natural-gas
reserves, and Russia has the largest. Russia is the world's second-
largest oil producer after Saudi Arabia. These are no small moves.

India is desperate to come to terms with Iran for energy but is
being pressured by Washington not to.

The Bush administration last year tried to get "observer status"
at the SCO but was turned down. The rebuff - along with the SCO's
demands for a reduced US military presence in Central Asia, deeper
Russia-China cooperation, and the setbacks to US diplomacy in
Central Asia - have prompted a policy review in Washington.

After her October 2005 Central Asian tour, Rice announced
reorganization of the State Department's South Asia Bureau to
include the Central Asian states, and a new US "Greater Central
Asia" scheme.

Washington is trying to wean Central Asian states away from
Russia and China. President Hamid Karzai's government in Kabul has
not responded to SCO's overtures. Given his ties historically to
Washington, he likely has little choice.

Gennady Yefstafiyev, a former general in Russia's Foreign
Intelligence Service, said, "The US's long-term goals in Iran are
obvious: to engineer the downfall of the current regime; to
establish control over Iran's oil and gas; and to use its territory
as the shortest route for the transportation of hydrocarbons under
US control from the regions of Central Asia and the Caspian Sea,
bypassing Russia and China. This is not to mention Iran's intrinsic
military and strategic significance."

Washington had based its strategy on Kazakhstan being its key
partner in Central Asia. The US wants to expand its physical control
over Kazakhstan's oil reserves and formalize Kazakh oil
transportation via the Baku-Ceyhan pipeline, as well as creating the
dominant US role in Caspian Sea security. But Kazakhstan isn't
playing ball. President Nursultan Nazarbayev went to Moscow on April
3 to reaffirm his continued dependence on Russian oil pipelines. And
China is making major energy and pipeline deals with Kazakhstan as
well.

To make Washington's geopolitical problems worse, despite
securing a major US military basing deal with Uzbekistan after
September 2001, Washington's relations with Uzbekistan are
disastrous. The US effort to isolate President Islam Karimov, along
the lines of the Ukrainian "orange" revolution tactics, is not
working. Indian Prime Minister Manmohan Singh visited Tashkent late
last month.

As well, Tajikistan relies heavily on Russia's support. In
Kyrgyzstan, despite covert US attempts to create dissensions within
the regime, President Kurmanbek Bakiev's alliance with Moscow-backed
Prime Minister Felix Kulov is holding.

In the space of 12 months, Russia and China have managed to move
the pieces on the geopolitical chess board of Eurasia away from what
had been an overwhelming US strategic advantage, to the opposite,
where the US is increasingly isolated. It's potentially the greatest
strategic defeat for the US power projection of the post-World War
II period. This is also the strategic background to the re-emergence
of the so-called realist faction in US policy.

-----

Afghanistan, as a case in point, was declared a legitimate target
for US military bombardment because the Taliban regime had said it
would turn Osama bin Laden over only when the US demonstrated proof
he was behind the New York World Trade Center and Pentagon attacks
on September 11, 2001. Bush didn't give proof. He did launch
a "preemptive" war.



Source: Commentary by: F. William Engdahl is the author of A
Century of War: Anglo-American Oil Politics and the New World Order,
Pluto Press Ltd. He may be contacted at
www.engdahl.oilgeopolitics.net.

http://www.truthout.org/docs_2006/050906T.shtml

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