This nexus began with first Franklin Roosevelt, then Dwight Eisenhower to Jimmy Carter to George H.W. Bush. Declared Roosevelt after meeting Saudi Arabia's king aboard a warship in 1945, "I hereby find that the defense of Saudi Arabia is vital to the defense of the United States." Carter, in 1980, put it even more forcefully: "Let our position be absolutely clear. Any attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States." It was clear even before WWII that oil had become the vital strategic commodity for expanding military and economic clout .During WWII, the Nazis occupied Romania for its oil and went for the oil fields in Azerbaijan, both countries then big oil producers.
Even a major reason for the partition of Hindustan was to protect western oil wells in the Middle East. Late Indian diplomat Narendra Singh Sarila in his well researched book 'The Shadow of the Great Game: The Untold Story of India's Partition', documents how the British leadership across the political spectrum , Conservatives and Labour , intrigued ,told lies , divided the Indian subcontinent and created a weak state of Pakistan which would be reliant on the West. Because Mahatma Gandhi with this opposition to violence and war, and emphasis on peaceful means to resolve all disputes and Jawaharlal Nehru with his non-real politic idealism and vision of creating friendship and understanding among colonized and exploited people of Asia, Africa, Middle east and elsewhere, would not join Western military pacts to protect from the Soviet Union, the oil wells in the Middle East dominated by Western oil companies.
Financial Times (London) warned last year that the US dollar will lose its status as the reserve currency in 25 years and would be replaced by a portfolio of currencies according to a survey of central bank reserve managers who collectively control more than $8,000 billion, unlike in the past when they said the dollar would retain its status as the sole reserve currency. -- The dollar would be replaced by a portfolio of currencies within the next 25 years. Central banks have bought about 151 tons of gold so far this year, led by Russia and Mexico, according to the World Gold Council, and are on track to make their largest annual purchases of bullion since the collapse in 1971 of the Bretton Woods system, which pegged the value of the dollar to gold. The Yellow metal
Would be the best performing asset class over the next year, citing sovereign defaults as the chief risk to the global economy.
US debt now amounts to over $ 14 trillion , equal to its GDP .Even in this GDP , the financial industry contributes 40%.The US economy is now 20-25 % of world GDP unlike 50% after WWII and is being artificially sustained by a stimulus of $ 2.8 trillion .There are no green shoots of revival , unemployment continues to rise . US economy remains in recession .The 1930s recession was overcome by WWII which allowed its protected ( from war) industry to run full steam and indebt European and other countries .With many industries disappearing or in decline , even the automobile one ,the US economic downhill can only worsen.
Turkey's Foreign Minister Ahmet Davutoglu said, "We have very good relations with Iran, and we are putting much effort into renewing Iran's talks with the 5+1 [Iran Six - the United Nations Security Council permanent members plus Germany] mediators' group. Turkey will continue looking for a peaceful solution to the issue."
BRICS member India - alongside Russia and China - also dismissed sanctions. South Korea and Japan will inevitably extract exemptions from the Barack Obama administration.
All across Eurasia trade is fast moving away from the US dollar. The Asian Dollar Exclusion Zone, crucially, also means that Asia is slowly disengaging itself from Western banks.
The movement may be led by China - but it's irreversibly transnational. Once again, follow the money. BRICS members China and Brazil started bypassing the US dollar on trade in 2007. BRICS members Russia and China did the same in 2010. Japan and China - the top two Asian giants - did the same only last month.
Only last week, Saudi Arabia and China rolled out a project for a giant oil refinery in the Red Sea. And India more or less secretly is deciding to pay for Iranian oil in gold - even bypassing the current middleman, a Turkish bank.
Asia wants a new international system - and it's working for it. Inevitable long-term consequences; the US dollar - and, crucially, the petrodollar - slowly drifting into irrelevance. "Too Big to Fail" may turn out to be not a categorical imperative, but an epitaph." concluded Escobar.
If EU hopes that Saudi Arabia will bail out , whatever the spin in Western corporate media – Riyadh does not have the spare capacity. Saudis will be happy with higher prices is high oil prices, as they have indicated ,to bribe - apart from repressing - its own population into forgetting about Arab revolts against US puppets in Arab states in north Africa and Yemen. It is likely that the Europeans will be compelled to buy oil at higher prices indirectly through intermediaries. This will hit Club Med countries such as Spain, Italy and Greece, having little time to find a possible alternative to Iran's light, high-quality crude. Greece - already facing the abyss - has been buying heavily discounted oil from Iran. The oil embargo may even precipitating a Greek government bond default - and have even cascading effect in the Euro-zone (Ireland, Portugal, Italy, Spain – and even beyond)
Even Turkey which has been cajoled and enticed into supporting Saudi policies by Yesil Surmaye aka Green Money from Riyadh since 2001 , finds that its Foreign Minister Ahmet Davutoglu policy of 'Zero friction with neighbours ' has ended in tensions with all its neighbours and the passage of Armenian genocide bill in French Parliament . Davutoglu, who recently visited Tehran to sort out differences said "We have very good relations with Iran, and we are putting much effort into renewing Iran's talks with the 5+1 [Iran Six - the United Nations Security Council permanent members plus Germany] mediators' group. Turkey will continue looking for a peaceful solution to the issue."
BRICS member India - alongside Russia and China – is opposed to sanctions according the media including a website close to Israel. India will keep buying Iranian oil and paying in rupees or even in gold. After being led by the noose and hood winked by Washington on Indo-US Nuclear Treaty which has given no freedom from NSG regime or access to advanced technology, not allowed to work out an energy security policy with Iran and others, New Delhi is moving away from total obedience to Washington, since the replacement of a policeman National Security Adviser by a strategic expert.
National Iranian Oil Company (NIOC) was expected to offer 600,000 barrels of heavy crude oil for sale on the first day launch of the bourse. Ali Akbar Hashemian, the managing director of Iran Mercantile Exchange, said the NIOC planned to offer 50,000 barrels of Iran's crude on the bourse on a regular daily basis, once all the necessary requirements are satisfied. Iran, OPEC's second-largest oil producer, has the world's second largest natural gas reserves after Russia.
In end 1993 , along with six ambassadors resident in Ankara I flew to Baku , capital of Azerbaijan , to present our first letters of credence to president Haidar Aliev , a former senior member of the Soviet Politburo , from Azerbaijan After the letters ceremony and calls on ministers , I called on resident ambassadors in Baku .The new US embassy was quite large and imposing , the British, smaller undergoing renovation; the Israeli , extensive extensions and renovation .
But I was in for a shock when I called on the Russian ambassador, who's Residence, consisted of a couple of rooms in an Intourist hotel. Russians were the masters of Azerbaijan till it broke away a few years earlier.
The point I want to make is that the Russians who lorded over Azerbaijan till recently were reduced to such straits that its Ambassador Extraordinary and Minister Plenipotentiary was confined to a suite in a two star hotel you find near old Delhi Railway station .But this kind of thing is not new in history . After all USSR had lost the Cold War , which was a tabletop nuclear war exercise between the two mighty adversaries .Moscow just could not match huge sums Washington poured into military expenditure . Washington now spends over US$ 700 billion for its defense and over $ One Trillion in all on National Security according to Chris Hellmen in Tomgram.