(Persian) Gulf Acquisitions, Mergers Grow by 39 Percent

(THIS ARTICLE IS COURTESY OF THE SAUDI NEWS AGENCY ASHARQ AL-AWSAT)

 

Gulf Acquisitions, Mergers Grow by 39 Percent

Sunday, 28 April, 2019 – 08:45
General view of Aramco’s Ras Tanura oil refinery and oil terminal in Saudi Arabia May 21, 2018. (Reuters)
London – Mutlaq Muneer
The number of merger and acquisition deals (M&As) in the Gulf Cooperation Council (GCC) grew 39 percent year-on-year during the first quarter of 2019, according to a report released by Kuwait Financial Center (MARKAZ) on Saturday.

The Saudi market topped the Arabian Gulf markets in terms of M&As in Q1-19, in which the sector witnessed Aramco’s 70 percent acquisition of SABIC in a deal worth USD69.1 billion.

In January, the Kuwait Finance House (KFH) said it gave initial approval for the average of stock exchange with AUB Bahrain at a rate of 2.33 shares of AUB’s in return for one share in KFH, added the report.

Abu Dhabi Commercial Bank (ADCB), listed on Abu Dhabi Securities Exchange (ADX), announced last month that its general assembly approved its merger with Union National Bank (UNB).

Italy’s Eni and Austria’s OMV will collectively acquire a 35 percent stake in ADNOC Refining for an estimated USD5.8 billion, whereby ADNOC will retain the remaining 65 percent stake in the company. KKR and BlackRock have acquired a 40 percent stake in ADNOC Oil Pipelines, an entity that will lease ADNOC’s interest in 18 pipelines for 23 years.

GCC acquirers accounted for 60 percent of the total number of transactions during Q1 2019 and 75 percent during Q4 2018. Foreign acquirers accounted for 34 percent of the total number of transactions during Q1 2019 and 17 percent during Q4 2018. Buyer information was not available for 6 percent of the transactions in Q1 2019.

Each of the GCC acquirers seemed to have a different appetite with regards to M&A transactions during Q1 2019.

Kuwaiti acquirers preferred investing in their home country. Saudi acquirers mostly invested in their home country and equally between other GCC countries and outside the GCC. UAE acquirers mostly invested outside the GCC and within their home country. Bahraini acquirers only invested outside the GCC. Qatari and Omani acquirers each engaged in one acquisition in their respective countries.

Q1 2019 witnessed a 70 percent increase in the number of completed transactions by foreign buyers compared to Q1 2018. In comparison to Q4 2018, the number of such transactions grew by 89 percent.

UAE targets represented 71 percent of the closed transactions by foreign acquirers during Q1 2019, while Saudi Arabia and Kuwait represented 23 percent and 6 percent respectively of the transactions during the same period. Bahraini, Omani and Qatari targets did not attract any foreign buyers during Q1 2019.

As per MARKAZ’s report, the industrial, financial and consumer sectors in the GCC accounted for 62 percent of M&As in the region during the first three months of 2019.

The media, insurance, telecommunication services and aviation sectors each accounted for 2 percent of the total closed transactions during Q1 2019, collectively amounting to 8 percent of the transactions during the period.

There was a total of 14 announced transactions in the pipeline during Q1 2019, representing a 27 percent increase in the number of announced transactions compared to Q4 2018.

UAE and Saudi Arabia collectively accounted for 79 percent of the announced transactions during Q1 2019. Oman and Qatar made up 21 percent of the announced transactions.

Qatar Announces Withdrawal from OPEC

(THIS ARTICLE IS COURTESY OF THE SAUDI NEWS AGENCY ASHARQ AL-AWSAT)

 

Qatar Announces Withdrawal from OPEC

Monday, 3 December, 2018 – 11:15
Qatar’s Minister of State for Energy Affairs Saad al-Kaabi. (Reuters file photo)
Asharq Al-Awsat
Qatar announced on Monday that it was quitting OPEC from January 2019.

Minister of State for Energy Affairs Saad al-Kaabi told a news conference that Doha’s decision “was communicated to OPEC” but said Qatar would attend the group’s meeting on Thursday and Friday, and would abide by its commitments, reported Reuters.

He said Doha would focus on its gas potential because it was not practical for Qatar “to put efforts and resources and time in an organization that we are a very small player in.”

Al-Kaabi stressed the decision was not political but related to the country’s long-term strategy and plans to develop its gas industry.

Qatar had been a member of OPEC for 57 years.

OPEC Warns of Oil Surplus in 2019

(THIS ARTICLE IS COURTESY OF THE SAUDI NEWS AGENCY ASHARQ AL-AWSAT)

 

OPEC Warns of Oil Surplus in 2019

Wednesday, 14 November, 2018 – 10:45
A worker checks the valve of an oil pipe at Nahr Bin Umar oil field, north of Basra, Iraq. Essam Al-Sudani | Reuters
London – Asharq Al-Awsat
OPEC sees demand for its own crude falling even faster than expected in 2019 as a slowing global economy crimps demand and rival supplies surge.

For 2019, demand will likely grow by 1.29 million barrels per day to 100.08 million bpd — some 70,000 million barrels per day less than in the September report. Meanwhile, the cartel now sees the output from non-member nations increasing by 2.23 million bpd next year, up 120,000 bpd from its last forecast.

“Although the oil market has reached a balance now, the forecasts for 2019 for non-OPEC supply growth indicate higher volumes outpacing the expansion in world oil demand, leading to widening excess supply in the market,” the group wrote.

“The market now increasingly looks concerned about the prospects of too much supply,” said Norbert Ruecker, head of commodity research at Swiss bank Julius Baer.

“Hedge funds and other speculative money have swiftly changed from the long to the short side,” he added.

Saudi Minister of Energy, Industry and Mineral Resources Khalid al-Faleh said Monday that OPEC and its allies have agreed that technical analysis of the energy market shows a need to cut oil supply from 1 million barrels per day (bpd) from October levels.

“Hopefully, Saudi Arabia and OPEC will not be cutting oil production. Oil prices should be much lower based on supply!” US President Donald Trump wrote on Twitter.

Nigeria Increases Output

Nigeria will raise its crude oil production to 1.8 million bpd in 2019 from around 1.6 million bpd currently, head of the Nigerian National Petroleum Corporation (NNPC) Dr. Maikanti Baru told Reuters on Tuesday.
Baru added that the country currently produces 1.6 million bpd of oil and 0.4 million bpd of condensate.

“The expected deals are to be signed this month. We are almost done,” he stated. The NNPC boss hinted that the corporation could also sign crude-for-product agreements with Shell and ExxonMobil.

If The Saudi’s Killed A Journalist: So Now What? Answer, Nothing

If The Saudi’s Killed A Journalist: So Now What? Answer, Nothing 

 

In this article today I am not trying to be cold-blooded or hate filled, I’m trying to be honest. Here in the States you have your typical politicians like Lindsey Graham wagging their tongues about “there will be hell to pay if the Saudi government killed this man.” I almost never side with Donald Trump but I do sort of agree with him on this issue. Reality is that many governments kill people every year. How many Journalist’s die in the line of duty every year? The Organization Reporters Without Borders says that 65 Reporters were killed in the line of duty in 2017 plus many more were imprisoned. He was not a Reporter but do you remember the American college kid who tore down a poster in North Korea and spent a year or so in one of their prisons only to be sent back home in a coma where he died a couple of weeks later? Folks, nothing real happened to North Korea because of this because mans murder. Mr. Trump was trying to strike a deal with N.K. President (Dictator) Kim Jung Un to get rid of their Nuclear Weapons. Which was/is more important, one life, or not having a thin-skinned ego maniac with is finger on a Nuke button? By the way, I am speaking of Mr. Kim, not the one that is in Our White House.

 

Now, let us get back to the murder of the Saudi/American Journalist who was murdered inside the Saudi Embassy in Turkey. Here are some realities for us all to think about. Mr. Trump is under pressure to cancel a multi-billion dollar weapons deal with the Saudi government because of them killing this man. Would this action by our President be a wise decision? Would it teach “them” a lesson? My answer is no, it would not. In fact if anything it could/would shift the balance of power on this planet. Here is why I am saying this. First it would shift the Saudi government toward the Chinese. If we do not sell these weapons to the Saudi’s the Chinese would be falling all over themselves to sell weapons to the Saudi government. Honestly I believe that it would be the Chinese and not the Russians who would fill the gap because the Russian government has aligned themselves with the Shiite Nations, mainly Iran and as you know, the Sunni Saudi’s are the enemy of Shiite Islam. China and Russia are allies of each other so it would be more crushing to the U.S. if China filled our void. Plus there is the reality that canceling this contract would put many American workers out of a job which would be felt in the voting booth next month.

 

Think about these things please, what if the Russians and the Chinese governments held complete sway over all of the Middle-East, over all of OPEC? What if China grew close to the Saudi Royal Family by such things as massive weapons sells? China is already building the largest refinery in the world in the Saudi Kingdom. If the U.S Government steps away from the Saudi Royal Family how long will it be before the Saudi’s decide to take their oil off of the dollar standard and put it on the Chinese Yen? If the Saudi’s did this I am sure that the rest of OPEC and the Arab world would very quickly follow suite. Think about it, the dollar not being the “world standard” currency. What if OPEC decided to only take the Yen as trading currency, and decided to either not sell any oil to the U.S. at all, or if they did, only at twice or three times the market rate? What would this do to the U.S. economy, to your job, to your living standard? In 2008 during that “depression” the U.S. economy backed off about 2%, what would things here in the States look like if our economy fell off by 10, 15 or 20%? I am just trying to be honest, I don’t like many realities in our world yet if we decide to change some of the current realities, we must be very careful about the new realities that bloom.

 

 

Venezuelan: shopkeepers alarmed by Maduro’s latest economic moves

(THIS ARTICLE IS COURTESY OF CNBC NEWS)

 

Venezuelan shopkeepers alarmed by Maduro’s latest economic moves

  • The socialist Maduro on Friday ordered a 96 percent currency devaluation, pegged the bolivar currency to the government’s petro crypto currency and boosted taxes as part of a plan aimed at pulling the OPEC member out of its economic tailspin.
  • Venezuela’s main business chamber, Fedecamaras, said it did not have any estimates on the effects of the measure yet, although local economists predicted a heavy toll.

Venezuela's President Nicolas Maduro talks to the media during a news conference at Miraflores Palace in Caracas, Venezuela October 17, 2017.

Carlos Garcia Rawlins | Reuters
Venezuela’s President Nicolas Maduro talks to the media during a news conference at Miraflores Palace in Caracas, Venezuela October 17, 2017.

After Venezuelan President Nicolas Maduro’s 60-fold increase to the minimum wage, storeowners on Saturday wrestled with an anguishing decision: Close up shop or hit customers with steep price hikes at the risk of sinking the business.

In a set of sweeping announcements that shocked many Venezuelans, the socialist Maduro on Friday ordered a 96 percent currency devaluation, pegged the bolivar currency to the government’s petro cryptocurrency and boosted taxes as part of a plan aimed at pulling the OPEC member out of its economic tailspin.

The measures especially spooked shopkeepers already struggling to stay afloat due to hyperinflation, government-set prices for goods ranging from flour to diapers, and strict currency controls that crimp imports. Many stores were closed on Saturday as owners hunkered down to consider the implications.

Economists warned that some companies would go under, unable to shoulder the massive increase in monthly minimum wage from 3 million bolivars to 180 million bolivars, or roughly $0.5 to $30. That will likely increase unemployment and further fuel mass emigration that has overwhelmed neighboring South American countries.

Jhonny Herrera, 41, owner of a hardware store on the windswept Paraguana Peninsula in northern Venezuela, said he would have to fire two employees because he cannot afford to pay them, leaving him with just one worker. When Venezuela was enjoying a decade-long oil bonanza, he had 10 employees.

“I have thought about closing for good and leaving, all the more so now with these increases. I have held back due to my 14 year-old-son, who I would leave here because I need to emigrate first,” said Herrera, surrounded by stores that have been shuttered after their owners fled the country.

To soften the blow, Maduro vowed that the government would cover three months of the wage increase for small and medium-sized companies. But he did not provide details and it remains unclear how his cash-starved government would afford such a hefty payout or whether the chaotic administration has the logistical capacity to pay wages on time.

The Information Ministry did not respond to a request for an explanation of the plan. Venezuela’s opposition called for protests and a national strike on Tuesday, although recent attempts by the fractured coalition to rally Venezuelans have had little impact.

Maduro no longer can count on armed forces' support

Venezuela’s Maduro can no longer count on armed forces’ support  

Venezuela’s main business chamber, Fedecamaras, said it did not have any estimates on the effects of the measure yet, although local economists predicted a heavy toll.

“A minimum wage of 180 million bolivars in this current situation implies the closure of thousands of companies and the unemployment of many people,” said economist Luis Oliveros.

Bakery owner Luis Carballo, a 59-year-old who has worked in the bread sector for 45 years, said he would try to stay afloat but was full of dread.

“I have to increase prices … And if I don’t sell, production drops, and I have to suspend some of my employees. I feel really badly,” said Carballo, as he handed loaves to customers in the Andean city of San Cristobal.

Outside another bakery in San Cristobal, security guard Victor Martinez fretted with a friend about the measures. “This is worsening the situation. I’m scared of losing my job,” said Martinez.

Russia, Saudi Arabia Increased Output to Clamp Down Shale Oil Profitability

(THIS ARTICLE IS COURTESY OF THE SAUDI NEWS AGENCY ASHARQ AL-AWSAT)

 

Russia, Saudi Arabia Increased Output to Clamp Down Shale Oil Profitability

Friday, 1 June, 2018 – 08:00
A flag with the Organization of the Petroleum Exporting Countries (OPEC) logo is seen during a meeting of OPEC and non-OPEC producing countries in Vienna, Austria September 22, 2017. REUTERS/Leonhard Foeger/File Photo
Kuwait – Wael Mehdi
At the time when Russia and other OPEC producers are in quest to study the increase of product during the second half of this year, this may lead to an imminent drop in oil prices and may clamp down the profitability of shale oil production regions in the US.

Bloomberg New Energy Finance analyzed in a report, published on May 30, the cost of shale oil output and the par value required for the barrel in one of the biggest basins in the US.

The report found out that the cost and par value vary from one region to another, but Permian Basin in Texas remains the lowest-cost basin on the level of the US, followed by Eagle Ford Basin in Texas.

According to the report, more than half of the counties where shale oil is produced are profitable with the current oil prices of $75 – but this doesn’t mean that they are not facing financial pressures with an expected drop in oil prices in the coming period.

This report shows the financial condition of the shale oil, in which companies that produce it have accomplished savings in costs and a high operating efficiency, since the drop in oil prices in 2014.

Al Rajhi Capital Head of Research Mazen al-Sudairi said that it is remarkable that the barrel par value in regions such as Permian is rising – and this is because of the limited infrastructure and the rise of operational expenditures.

Sudairi added that Permian that remained the most competitive region in regards of cost doesn’t contain sufficient pipes in the current time. For this, dependence on trucks to transport oil or materials used in Hydraulic breakdown of producing wells has risen the cost hugely.

What If: All Shipments From OPEC Nations Stop Until The Sunni And Shiite Stop Hating Each other?

What If: All Shipments From OPEC Nations Stop Until The Sunni And Shiite Stop Hating Each other?

The headline is meant to be a philosophical question to you. What do you think would be the result on all of the world stage if Iran/Shiite populations of the Middle-East go to an overt shooting war with Saudi Arabia/Sunni populations of the Middle-East? Then of course there would most likely be the spillover effects. ISIS, al-Qaeda, Hamas and other Sunni groups like them joining together to fight against the Shiite groups like Hezbollah. If this did happen where would be safe place for a peaceful person to hide anywhere in that region of the world? Who would be able to stop the bloodshed if this civil war were to be carried out on our own shores? The hate that is being shown going on between these two Faith/belief systems is to a measure like Christians and Catholics going to open war simply because the other, is the other. Both believe in the same Father, same Son, and the same Spirit! They should never had war against the other, let God sort us out, if one was more correct than the other let Him be the Judge, not us. Within Islam both of these major Sects believe in the same God as being The God and they believe in the same Prophet, Mohammed. So, do you personally think that it is possible that if this current flare-up between Iran and Saudi Arabia does not cool off soon that there could be overt war between the two? If that were to happen what would happen to all of the worlds markets. Are there any governments globally that can operate if all oil from that region of the globe stops flowing? The world does need to be off the need for all fossil fuels but where is that infrastructure in place at right now? The world needs to wake up, our world is based on profit margins and stock values, not on any Nations abilities to survive! Folks, that is what puts our 100% Capitalist system at a disadvantage. The people whom have the power cherish having the power. To not feel so would be showing a weakness to the other wolves. Profits are more importance to some than the safety of the Nations and the people who make those profits for them! So again I ask you this question, if OPEC’s nozzle shuts off, what will that cause to happen in your world?

Saudi-Iraqi Joint Statement: Opening Border Crossings, Developing Ports and Roads  

(THIS ARTICLE IS COURTESY OF THE SAUDI NEWS AGENCY ASHARQ AL-AWSAT)

 

Saudi-Iraqi Joint Statement: Opening Border Crossings, Developing Ports and Roads

Monday, 23 October, 2017 – 07:15
Saudi Arabia’s King Salman he speaks with Iraqi prime minister Haider Al Abadi in Riyadh on October 22, 2017. Saudi Press Agency via Reuters
Riyadh – Asharq Al-Awsat

Saudi-Iraqi ties have entered a new stage of cooperation and coordination in which the two countries signed on Sunday a minutes of establishing a Saudi-Iraqi Coordination Council (SICC).

The first meeting of the council was convened and it resulted in an agreement to open border crossings and develop ports, roads and border areas. They also agreed to review an agreement on customs cooperation and study bilateral trade.

The council expressed its satisfaction with the state of the oil market following an agreement between the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers. The SICC stressed the importance of participants’ full commitment to the agreement until its target is achieved.

“The Council was briefed on the results of the Kingdom’s participation in the Baghdad International Fair, which was a great contribution to economic and trade relations. The Saudi side also noted the level of welcome and hospitality enjoyed by the Saudi delegation from reception to departure,” a statement said.

They also agreed to develop private sector partnerships, inform businessmen of trade and investment opportunities and encourage the exchange of technical and scientific expertise and research.

The Iraqi side thanked the Kingdom for its initiative in studying the implementation of customs ports, which will facilitate bilateral trade.

The SICC announced the resumption of flights from the Kingdom to Iraq, the opening of a Saudi Consulate there, and the reopening of Saudi chemical manufacturing company SABIC’s office in Iraq.

In addition, it was agreed that Saudi Arabia will participate in exhibitions in Iraq, including the Baghdad International Fair, the Basra Oil and Gas Exhibition, and the Business and Investment Forum.

During the SICC’s first meeting, the two parties discussed its priorities for the next two years, implementation of its work and the formation of a working group. Its second meeting will be held in Iraq’s capital Baghdad in the presence of ministers and senior officials from both countries.

 

Venezuela Opposition Lawmakers Protest At Gates Of Military Headquarters

(THIS ARTICLE IS COURTESY OF REUTERS)

By Andreina Aponte and Diego Oré | CARACAS

Venezuela opposition lawmakers placed pretend coffins and body bags at gates of the National Guard headquarters on Tuesday in protest after the latest fatality in anti-government unrest that has killed at least 75 people since April.

Footage and photos from demonstrations on Monday showed at least three members of the National Guard – a military unit with public order responsibilities – aiming and firing pistols in clashes on a major Caracas highway.

A 17-year-old demonstrator was shot in the chest and died, while several others were injured.

“You cannot keep killing people in the street!” opposition lawmaker Tomas Guanipa shouted during the early-morning protest in the middle-class El Paraiso zone of Caracas.

“Who gave the order to shoot?” asked another lawmaker Jose Olivares as soldiers watched silently from inside their base.

Venezuelan authorities said two National Guard members had been detained on Monday for what the interior minister called “presumed improper and disproportionate use of force” when thousands of protesters flooded the streets.

And President Nicolas Maduro announced that the general in charge of the National Guard, Antonio Benavides, was being replaced by another military man, Sergio Rivero.

“Win peace! That is our aim,” Maduro told Rivero, without giving reasons for the change.

Opposition leaders accuse Rivero and other military leaders appointed by Maduro of human rights violations during the recent protests.

“Generals and admirals that we denounced before the state prosecutors’ office for committing atrocities against Venezuelans are being given honors and promotions,” wrote opposition legislator Gabriela Arellano via Twitter.

The Defense Ministry and the Information Ministry did not immediately respond to a request for comment on the issue.

As well as the fatalities, thousands of people have been injured or arrested since Venezuela’s opposition began its latest street campaign against Maduro’s socialist government in early April.

They accuse Hugo Chavez’s successor of becoming a dictator and wrecking the once-prosperous OPEC member’s economy, demanding a presidential election to end his rule.

Maduro, 54, narrowly won election in 2013 to replace Chavez after his death from cancer, but has seen his approval rating halve to just above 20 percent during four years of an economic crisis causing hunger and shortages.

VICTIMS ON ALL SIDES

Maduro says “terrorists” and “fascists” are leading the protests in an effort to topple him by force as briefly happened to Chavez in 2002. Government supporters, bystanders and some members of the security forces have also been victims of the violence, with gunshot wounds the most common cause.

Though thousands turned out on Monday, many grassroots opposition supporters feel intimidated by the daily violence in cities around Venezuela, where masked youths barricade streets and hurl stones and Molotov cocktails against security forces with tear gas and water cannons.

Pro-government gangs with guns sometimes join the fray.

There is also some exhaustion setting in within protester ranks after 80 days of what the opposition calls “resistance” and the government terms “armed insurrection”.

Opposition leaders have, however, vowed to step up tactics to increase pressure on Maduro. They are seeking to halt Maduro’s plan for July 30 elections for a special assembly to rewrite the constitution, a move they say is rigged to keep him in power.

Chief state prosecutor Luisa Ortega has been leading dissent against the plan from within government, earning her a barrage of accusations from officials ranging from corruption to insanity and promoting violence.

The Supreme Court on Monday accepted a request by a ruling Socialist Party lawmaker to begin the process of taking her to trial for committing “serious offenses.”

Before any trial could take place, the Supreme Court would first have to hold a preliminary hearing to determine whether a trial is warranted.

(Additional reporting by Diego Ore and Victoria Ramirez; Writing by Andrew Cawthorne; Editing by Grant McCool and James Dalgleish)

Moscow is Trying to Influence Iran’s Presidential Contest

(THIS ARTICLE IS COURTESY OF THE SAUDI NEWS AGENCY ASHARQ AL-AWSAT)

Moscow is Trying to Influence Iran’s Presidential Contest

For four decades Tehranis have heard so many weird slogans chanted in their streets that almost nothing comes as a surprise to them. And, yet, last week many Tehranis were surprised to hear a group of youths, all adorned with suitable beards, shouting: “Russian Embassy is a Nest of Spies!”

“Nest of Spies” was first launched in 1979 by Ayatollah Khomeini as a label for the US Embassy which had been raided and which diplomats were held hostage by the so-called “Students Following the Lead of Imam”. The operation that provoked a 444-day long stand-off between Tehran and Washington had been quietly encouraged by KGB elements in Tehran working through the Tudeh (Communist) Party and its smaller left-wing affiliates as a means of driving the US out of Iran.

At the time no one could imagine that one-day it would be the Russian Embassy’s turn to be thus labelled. True, Iran already has a history of raiding the Russian Embassy. In 1829, a mob, led by mullahs, attacked the Tsarist Embassy ostensibly to release two Georgian slave girls who had sought refuge there. Alexander Griboidev, the Embassy’s ambassador was seized, sentenced to death with a fatwa and beheaded. (Griboidev was more than a diplomat and had made a name as a poet and playwright.)

It is, of course, unlikely that the regime would allow anyone today to raid the Russian Embassy and seize its diplomats as hostages. Nevertheless, the anger expressed by the small bunch of demonstrators is real.

But why has the Russian Embassy become a target for militant anger some four decades later?

The question is all the more pertinent as the “Supreme Guide” Ali Khamenei has launched what he calls a “Looking East” strategy based on an alliance between Tehran and Moscow. That strategy is in direct violation of Khomeini’s famous: “Neither East nor West” slogan (Na sharqi, na gharbi!) Khomeini insisted that unless Russia converted to Islam it should not expect to be treated any differently than other “Infidel” powers. (The ayatollah sent a formal letter to Soviet President Mikhail Gorbachev inviting him to embrace Shiism.)

However, two years ago, in a four-hour long summit with Russian President Vladimir Putin, Khamenei agreed that his Islamic Republic would take no position on major international issues without “coordinating” with Moscow. That historic accord was quickly put into effect in Syria where Putin provided air cover for an alliance of forces assembled by Iran around the beleaguered President Bashar al-Assad.

Putin played a key role in exempting Iran from cuts in its oil production under an agreement between OPEC and non-OPEC producers to stabilize prices.

Putin also lifted the ban on sale of advanced surface-to-air missile systems that Iran says it needs to face any US air attack. At the same time, Moscow has done quite a lot to shield the Islamic Republic against further concessions on the thorny issue of Iran’s nuclear ambitions. Putin went even further by tacitly acknowledging Iran’s lead in shaping policy towards Iraq and Afghanistan.

Working in favor of strategic alliance with Moscow are several elements within the Islamic regime. These include the remnants of the Tudeh, the People Fedayeen Militia and assorted groups of anti-West activists. However, the proposed alliance also enjoys support from powerful clerics who believe they need Russian support to face any future clash with the US.

“By courageously defending the Syrian government, Russia has proved it is a true friend,” says Ayatollah Muhammadi Golpayegani who heads Khamenei’s personal cabinet.

However, to sweeten the bitter pill of alliance with Russia, a power which has a 200-year long history of enmity and war with Iran, the mullahs also claim they could seize the opportunity to spread their brand of Islam in the Russian Federation where Shi’ite account for less than three per cent of the estimated 30 million Muslims. (The only place where Shi’ites are in a majority is Darband in Dagestan.)

In his typically sly way, Putin has encouraged such illusions. He has promised to let Qom set up seminaries in both Darband and Moscow to train Russian Shi’ite mullahs. Putin has also set up something called Strategic Committee for the Spread of Islam led by Tatarstan’s President Rustam Minikhanov.(Tatarstan is the largest Muslim majority republic in the Russian federation.)

Having allegedly tried to influence the latest presidential election in the US and the current presidential election in France, Putin is also accused of trying to do the same in Iran. Last week he sent a 60-man delegation, led by Minikhanov, to Mash’had, Iran’s largest “holy” city to meet Ayatollah Ibrahim Raisi, the man regarded as one of the two candidates most likely to win the presidency. Minikhanov was accompanied by Tatarstan’s Grand Mufti Kamil Sami Gulen who told reporters that Putin wants Iran and Russia to work together to “present the true face of Islam to young people” and “counter propaganda by terrorist circles.”

Kremlin-controlled satellite TV channels have played up the meetings, casting Raisi as a statesman of international standing.

However, to hedge his bets, Putin had already received the incumbent president Hassan Rouhani during a hastily arrange visit to Moscow last month. However, some observers claim that Putin regards Rouhani and his faction as “too close to the Americans.”

Some senior members of Rouhani’s administration who are rumored to be US citizens or holders of “Green Cards”, may cast doubt on their sincerity to embrace a strategic alliance with Moscow.

There are signs that not everyone in the regime is happy about tying Iran’s future to that of the Putin regime. The slogan “Russian Embassy is Nest of Spies” is just one small example of that unhappiness. Other examples include a series of features published by the official media, including IRNA, about Russian historic aggression against in Iran.

One curious feature published by IRNA even claimed that US President Harry S Truman helped Iran recover two of its provinces occupied by Russian despot Stalin in 1946. Another feature, published by a news agency close to the Islamic Revolutionary Guard narrates the “shameful” history of pro-Russian factions in Iran from the 19th century onwards.

An old Persian saying claims Russia is a big bear to admire from afar; if he embraces you he will crush you.

Amir Taheri

Amir Taheri

Amir Taheri was the executive editor-in-chief of the daily Kayhan in Iran from 1972 to 1979. He has worked at or written for innumerable publications, published eleven books, and has been a columnist for Asharq Al-Awsat since 1987. Mr. Taheri has won several prizes for his journalism, and in 2012 was named International Journalist of the Year by the British Society of Editors and the Foreign Press Association in the annual British Media Awards.

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