Negotiations between Moscow and Baghdad can be seen as a positive signal
Key region
On October 10, the Prime Minister of Iraq, M. al-Sudani, arrived in Moscow. He held talks in the Kremlin, and 11 attended the plenary session of the Russian Energy Week in Manege, an annual forum that brings together representatives of the Russian and foreign fuel and energy complex.
For obvious reasons, the focus was on statements that related to the war between Israel and the Gaza Strip, but the original reasons for this visit were not relations between Israel and Palestine.
The agenda was discussed for several months, and final agreement apparently took place on the sidelines of the UN General Assembly, where the Iraqi Foreign Minister said that preparations would be completed within a few weeks. The events of October 7, if they sped up the preparation process, did not do so much.
Energy has always been and will be an issue in bilateral relations between Moscow and Baghdad, but today logistics has been added to the issues in the energy sector, moreover, logistics is expensive. The volume of investment in projects is estimated at $17 billion.
Those regions to which the attention of the media sphere is situationally focused are not always key in the so-called. geopolitical projects. Such story It also happens with Iraq, which is usually remembered in cases of some local aggravation.
Nevertheless, it is Iraq today that is the “key city”, or rather the “key region”, on which nothing less than the extent to which American strategic concepts can be implemented seriously depends.
Now the development of the “Abraham Accords” in terms of normalizing relations between Israel and Saudi Arabia, and possible logistics from Arabia to the EU have finally begun to be widely discussed. But this is only part of the big picture of the Third Pole project.
Three of evil
Those meetings that we are observing precisely reflect a kind of struggle for Iraq, which the emerging coalition Russia - China - Iran cannot lose in any way. Western speakers are true to themselves and have already called our trio the “Axis of Evil.”
It is between the “Axis of Evil” and the “Hegemony of Total Good” that the current leadership of Iraq is trying to develop a strategy for interaction.
The point is not that Iraq will completely fall into someone else's sphere of influence; the question is the share of influence of each side.
A decrease in the influence of our troika will mean a loss of control over large regional markets, a significant reduction in the ability to provide liquidity to these markets and foreign exchange earnings to Iran, as well as a loss of the ability to effectively develop Iraqi fields, and therefore a decrease in influence on the hydrocarbon market as a whole. Growing influence will mean the opposite situation.
The events of recent days in terms of Iraq are important because in this country there are still US military bases, which, taking into account the strength and number of various Shiite military formations (some pro-Iranian, some associated with M. al-Sadr) are a kind of hostages, being under their gunpoint. Iraq also supplies supplies to pro-Iranian forces in southeastern Syria, where bases and strongholds of US troops are also located.
Although Washington has sent an aircraft carrier group to Lebanon (and is sending more), which is directly aimed at the forces of the Hezbollah movement, the option of striking rear bases remains a significant deterrent.
Let's consider a number of proposals for the meeting agenda.
Firstly, the issue of oil transit from Iraq to Turkey was discussed, which has been a stumbling block between Baghdad and Ankara for a year now, with Iraqi Kurdistan playing an important role here.
The second part concerned the construction of a new full-fledged railway route from the south of Iraq to the north.
The Trans-Iraq route to the north is a project with a rather long history. It was planned to begin developing it in 2011, making the new port of Al Fao the fulcrum. At one time it was presented as almost an alternative to the route through Suez, with a design volume of handling 100 million tons of cargo. However, as happens in such projects, it turned out to be a long-term construction, however, more due to military operations.
Iraq is very wide in its middle part, but it comes out into the Persian Gulf with a rather narrow protrusion in the form of the Faw Peninsula, on the right hand of which, on the border with Kuwait, there is an entrance to the canal leading to the port of Umm Qasr (the main and deep-water port of Iraq) . On the left hand, on the other side of the peninsula, at the mouth of Shat al-Arab, there is another port and the Al-Fao oil terminal, and further up the river is Basra itself. If the entrance to Umm Qasr is located along the border with Kuwait, then the entrance to Al Fao is on the border with Iran. The route to it is 100 km closer. All these names evoke memories from News about the progress of the war in Iraq.
It is logical that American companies received contracts for the restoration, as well as the development and expansion of the port of Umm Qasr, and the funds were allocated through targeted US programs. Things moved very slowly, and until 2016-2017. the main sea cargo for Iraq was unloaded at the ports of neighboring Kuwait. Immediately after the war, the British claimed control, but the Allies were eventually pushed aside rather unceremoniously by the United States. The British were quite offended, since they were the first to storm these ports and redirect cargo flows to Kuwait, which is close to them.
After some time, the route through Kuwait became one of the main ones. It was impossible to use the port of Basra as an alternative, since the depths there are ±9m, which does not allow accepting vessels of a class higher than Handysize (up to 35 thousand tons). The flow of cargo from Iran, which received it through its ports in the Persian Gulf, gradually increased, but the route there to Basra with bridges over Shat al-Arab was much longer than Kuwait.
Hegemon of destructive good
In Iraq, they understood that since 2010–2012, the United States has simply artificially slowed down the development of the domestic market. In Washington, each administration feared that this would strengthen the pro-Iranian party, but until recently nothing clear was offered in return. At the same time, the main flow of money for 15 years after the war came directly from the United States through special accounts and programs.
It was also clear that, in various indirect ways, trade was developing more in the interests of Saudi Arabia and Kuwait, although relations with the latter’s government in Iraq in the last decade have not been so dramatic, but territorial issues remain.
Now the border between the countries runs right at the port of Umm Qasr. Kuwait wants to bring it even closer, and there is serious debate about this in the Iraqi parliament. After all, tiny Kuwait has a coastline of 120 km, and Iraq already has only 50. But this has been done for years, in fact, with an eye to controlling Iraqi trade, since additional supplies to both Syria and Iraqi Kurdistan go through Iraq.
The deepening of the port of Al Fao, which is located in the depths of a wide and convenient mouth just 14 km from the “big water” of the Persian Gulf, while being 100 km shorter and without the weights of American and British stevedoring campaigns, suggested itself. The issue was investment, and since last year China has made it clear that Al-Fao is a good option for implementing the Belt and Road strategy.
But at the end of last year, Iraq entered another period of government crisis, and this spring the United States began to propose projects as part of the development of its own I2U2+ strategy. The problem for the Americans was that they relied, again, on transit from Arabian ports, proposing to develop a road and railway network.
In response, Iran put forward a project and immediately moved it to the implementation stage for the development of a railway route to Basra and further to Baghdad. Now Moscow is entering this story with a proposal to participate in the construction of a route from Al-Fao to Basra, connecting it with the Iranian one and further to Kirkuk and to the north. And there is logic in this, because Al-Fao is not only bulk and container cargo, but also oil loading routes and terminals that need to be reconstructed.
The importance for Iraq here is that, due to many past circumstances, even with significant oil reserves in the south of the country, most of it is produced in the Kirkuk area. The stumbling block for every government in Iraq is the issue of oil transit through Iraqi Kurdistan along the Kirkuk-Ceyhan line.
Iraqi Kurdistan is an almost full-fledged separate state, de facto in confederal relations with Baghdad, and the basis for maintaining relations is the distribution of income from hydrocarbon production and their transit to the north. In 2017–2018 Russian companies Rosneft and Gazprom have deeply entered this region, both to the north (Erbil), investing in the Kirkuk-Ceyhan project, and to the south (Sulaymaniyah), investing in field development and production. At the same time, equity projects in Iraq itself were stalled due to a very specific profit distribution formula.
Last year, disputes arose between Turkey and Iraq about the volume and cost of oil. The fact is that during the military confrontation in Iraq with ISIS (banned in the Russian Federation), oil was still supplied to Turkey, but each side estimated its volumes in its own way.
As a result, Baghdad filed a lawsuit against Ankara, which awarded Turkey to pay Iraq $1,5 billion, previously unaccounted for supplies. In response, Ankara put forward demands for counter-compensation of $900 million and stopped the purchase. This has extremely complicated the situation for our companies.
An alternative in the form of a route to the south with access to the Persian Gulf and without direct American participation is a very profitable and promising acquisition for Baghdad. This is also a plus for China and Russian raw material companies, and Iraq will undoubtedly increase the investment attractiveness of activities at its main fields.
It is not entirely clear why the railway route to Turkey should be extended, since this will allow Ankara to strengthen its exports to Iraq. Now he is going through a road crossing in Kurdistan (Zakho, Dahuk Province). The railway route will give Turkey additional chances in competition with Iran. However, it is possible that this is part of a Chinese initiative, and we will see the details of these projects based on the results of the large-scale “One Belt, One Road” forum, which will open in China in a week.
In general, we are seeing quite workable projects in terms of a response to the American concept of “extended I2U2” or “Third Pole,” in which the United States wants to join the Iraqi economy to a hypothetical Indo-Arabian macrocluster, leaving Syria and Iran out of the equation, which is categorically unprofitable for Russia.
Now, for obvious reasons, the issue of linking Israel and the Arabian countries into one economic cluster will be paused, and for an indefinite period of time, and the United States, which has spent very large resources on this, will come to terms with this with great inertia. But this does not mean that they will abandon it in principle and stop competing for Iraq even temporarily. They will temporarily take Israel out of the concept brackets, and will push access to the Mediterranean through Egypt.
But the fact that Iraq has begun to work closely and substantively on alternatives to the American concept is a good positive, however, now we ourselves need to work more closely with Iraqi Kurdistan, and Iran with the political parties in Baghdad.
The political crisis in Iraq is an almost permanent condition, and in this water the USA and Britain know how to swim very well, having the ability to connect the private interests of the Arabians and tribal influence groups in Iraq.
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