Why Iran Wants Russia in OPEC
And why the U.S. shouldn't want them to join the Big Oil Club.
After months of lower prices, Russian membership in OPEC could result in oil prices climbing again. This is good for Iran. Higher oil prices mean a strengthened economy and a boost to President Mahmoud Ahmadinejad’s chances of reelection. Recently, the Iranian leader has been trying to boost his popularity by increasing the Iranian New Year (March 21) bonus for retired staff to $200.
But with the U.S. government extending sanctions by a year and oil prices sitting at $47 instead of $147 (as was the case in July 2008), Ahmadinejad needs all the economic help he can get. With Russia on board in OPEC, he would have a better chance of increasing oil prices and Iranian income. This would provide him with more funds to spend on his conservative policies and more funding at his disposal to spend on his nuclear program and support for Hamas and Hezbollah.
Having Russia as a member of OPEC would also strengthen Tehran’s position against Washington, especially regarding talks over the nuclear program.
Iran is worried about Barack Obama’s popularity in the U.S. and his influence in the international arena. This is true to such an extent that Iran initially planned to launch its new Omid satellite on January 20, which also happened to be the day of Obama’s inauguration. The launch, however, was postponed to February 2, due to bad weather.
Nevertheless, the very fact that Iran wanted to welcome Obama’s term with such public muscle flexing is a clear sign that Tehran is worried about Obama’s potential reaction to its intransigence in nuclear talks and whether the president will leverage that into stronger sanctions or even war.
As a member of OPEC, Russia would make Moscow increasingly dependent on Iran, not only regarding the export of its goods but also regarding its cooperation in important issues such as setting production quotas. Tehran’s hope is that such leverage can be used to continue its nuclear program while fending off any possible increase in sanctions.
So what can the U.S. do about it? Obviously, continuing investment in alternative energies is crucial. Cooperation with Azerbaijan also needs to be expanded: the Nubucco pipeline will bring gas from the Caspian sea to Europe via Turkey, thereby reducing Europe’s dependency on Russian gas.
The Nabucco project gains even more importance in light of the fact that Iran is also trying to become a gas supplier to Europe through its own pipeline from the Caspian Sea, which will run into Europe via Turkey.
The Cold War may be over, but Moscow has not given up its ambition to become a superpower. A useful counter strategy by the U.S. would be to boost the status and power of the G20 group of countries. With the financial crisis worsening every day, such a move would deny Russia the opportunity to use the crisis to boost its power and influence around the world, as it did when Moscow waded in to save the Icelandic central bank by loaning it four billion Euros.
Acquiring OPEC membership would not only be another notch in Moscow’s belt, it could have the unpleasant side effect of helping Iran’s nuclear program and strengthening Tehran’s support for Hamas and Hezbollah.
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Meir Javedanfar is the co-author with Yossi Melman of The Nuclear Sphinx of Tehran: Mahmoud Ahmadinejad and the State of Iran. He runs Middle East Economic and Political Analysis (MEEPAS).
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14 Comments
1. Chris:If you don’t want Russia to join OPEC offer them something better. Constantly swirling the dregs of the cold war round your glass won’t get you anywhere. Doesn’t it strike you as odd that you solve the problem of Iran by undermining Russia?
Mar 22, 2009 - 4:35 am 2. Don:THE USA is not very popular anywhere in the world. Its schemes to manipulate European governments are public knowledge. Confronting Russia in Europe will bring the Post war settlement there to an abrupt end. This will
not improve either the power or the reach Of the USA.
With the eventual triumph of world socialism assured, why should we worry about a future “genosse” joining the ranks of the (diminishing) capitalist resource hegemon? With our leader working to break the backs of the capitalist oppressors here and worldwide, (as well as assuring all organisms a future world by stopping the rising of the oceans) what do we have to fear from a class of oppressors that will sell us the rope to hang them with? We should embrace the idea, and join it ourselves, aligned with our future brothers in the workers paradises of Cuba and Venezuela, we can undermine and make democratic the distribution of natural resources to the truly needy (and politically correct) and not the truly greedy. Chis is right, we have embraced the false god of free will and capitalism, and now we deserve to pay the price. WORKERS UNITE!
Mar 22, 2009 - 6:35 am 3. Chris:Don only in America would Obama be seen as Anti Capitalist. Elsewhere your antediluvian ideas have no salience. Of course no one will be more shocked than you if CNN carries ‘Workers of all countries unite you have nothing to loose but your chains’. Try taking stock. There is a capitalist system that doesn’t work. An ecological system that no one understands. A series of social crisis that no one can control.
Mar 22, 2009 - 7:28 am 4. Oscar the Grump:Other than that ‘No worries’
It’s in Russia’s interest not to join OPEC. All OPEC does is limit production. Russia acts as the spoiler and ups its production every time.
Mar 22, 2009 - 7:39 am 5. fred:It scarfs in the money on oil on the inflated prices.
Chris and Don,
With the gradual triumph of socialism in the non-Muslim world, the big question remains: who will be the eventual victor in the struggle between Islam and us enlightened socialists? That is no merely theoretical question, because the day is going to come when the current alliance of convenience between socialist groups and Islam will have served it purpose, and then the two ideologies will compete with each other.
Russia and Iran may be a test case of this, since both countries do have an alliance against the United States. But once the United States is defeated, where is that alliance between Russia and Iran going to go?
Mar 22, 2009 - 8:24 am 6. Marie Claude:right Oscar, Russia has no interest in OPEC, but she has interest to keep good relations with Iran, umm, lots of international companies are aegering toward central Asia oil and gas, and Iran is “there” as their shield, Russia needs Iran, but Iran doesn’t, that’s why they play on all the boards, actually, the American’s would be their favorite, but the conditions still are not convenient for Iran, they have to renounce to HBZ and Hamas
Mar 22, 2009 - 8:41 am 7. Marc Malone:Russian disease rates are epidemic. Alcoholism is rampant Their beautiful women are selling themselves as mail-order brides; anything to escape Russia. Those with real talent are also fleeing. All this, and Russia still wishes to play the game of realpolitik. They spent $250B to tear off part of the Caucasus. That money could be spent on desperately needed infrastructure, but no-o.
This is the approach we need to take. We need to let the world know just how sick Russia is. We also need to get them to understand that the idea of a nuclear-armed Iran is also not int their interests. We’re not the only ones with Islam problems.
All of this presupposes that we have a strong, competent President who won’t be withdrawing into isolation, and a country that isn’t itself veering off into looming bankruptcy. If our economy crashes further, oil demand will continue downwards no matter what OPEC does.
Mar 22, 2009 - 8:54 am 8. dan:“As a member of OPEC, Russia would make Moscow increasingly dependent on Iran”
Really? I’d say each member’s interest aligns along price, and the addition of Russia would simply allow them to dominate on the question of price even more absolutely. I’d say that gels nicely with the arms pacts between Iran and Russia. I would think the ultimate strategic effect Russia’s induction would have would be (as you point out) to undercut the importance of the Arab Gulf states, including Saudi Arabia, a bulwark of Pax Americana for 60 years.
Honestly I think, above all, we have to stop imagining that Russia can somehow be subordinated to Iran. Iran simply doesn’t have the strategic assets Russia, despite the apparently grave challenges both countries face.
Mar 22, 2009 - 9:05 am 9. Chris:Fred I See no triumph of Socialism gradual or otherwise. I see the rapid approach of species extinction. Since Global warming results from the wide spread application of 19th century technologies the ‘triumph’ may be a century to late. Marie Claude neither Russia or America are subjects consequently they have no ‘interests’ their rulers however do. Russia covers 20 percent of the worlds land mass. For centuries its rulers have been preoccupied with maintaining their borders against invasion. There current rulers have reverted to this older role.
Mar 22, 2009 - 9:50 am 10. Meir Javedanfar:I don’t see this discussion being related to socialism vs capitalism.
Mar 22, 2009 - 10:27 am 11. don:If we evaluate this from the economic angle, its an extension of what is happening in G20. And that is: centre of economic gravity moving away from the EU and the US.
Russia needs to reinvigorate it’s population, build a sustainable economy and re-establish it’s it’s own “self respect/confidence”, joining OPEC will net it nothing in this effort, save give OPEC a window (and influence) on a wholly Russian resource. As far as global warming? Simple answer, Nuclear power. More complicated one, fusion. One is now, the other (with combined efforts and resources) . . . 5 years? Hydrocarbons are a necessity for the near term, from plastic to dies, from lubrication to paint (not even mentioning power and propulsion) it will take at least 30 to 50 years to replace them (given a practical replacement now). The only viable option to lower the amount of greenhouse gases is to have a drastic shrinkage in human (and bovine) populations, perhaps that is what Pelosi was speaking of when she talked of monies to Planned Parenthood (saving the states monies). I guess to that end a “cradle to grave” national medical system can fulfill a “culling” function (as it so effectively does where it is practiced) so it just makes sense (unless you are one of those being culled; too old, too injured, too sick, too expensive to treat, too politically untrustable).
So, Russia sits on to huge assets, Gas and Oil, why subject themselves to any control or influence from the outside? Right now they have the best of all worlds, they play along when they want to, and don’t at whim. We just need to have a real common frame of reference with them so we can form a (a’la’ Pournelle) “Co-Dominium”.
Mar 22, 2009 - 11:30 am 12. hawkeye:#1,#2. we must join him, gandalf, we must join with suaron,,,,,,, see you at the slave camp, boys….
Mar 23, 2009 - 11:14 pm 13. hawkeye:that’s the place where the workers unite, all week long, and ev’ry on saturday night.
or perchance, their entries were meant as satire,
Mar 23, 2009 - 11:18 pm 14. jack:Russia does not want to be part of OPEC. They could have joined a million times over but they don’t want to. They make more money selling bigger quantities. Russia does not want to be part of EU, NATO, nothing. All they care about are the former soviet states and china. that’s all. Anyone else for them is just a means to an end.
Apr 2, 2009 - 7:30 am