Iran is choosing the wrong approach

The drone cum missile attacks against Saudi oil facilities remain a major international issue. Analysts have tried to read beyond these strikes. They seek to understand what Iran’s game plan is. That’s certainly a key question, in addition to several others. We need a plausible answer to it.

Iran is clearly coordinating its actions with their clients in Yemen, the Houthi rebels. Today, both Iran and the Houthi leadership have extended a hand of dialogue. Last week, the hand they were showing resulted in the attacks, a clear act of war. Now, they talk about bringing down the tension. At the same time, the Iranians organise military parades and public demonstrations of force.

But, again, the question is what is their plan? Escalation, on one side, and diplomatic talk, on the other, is a tactic but not a strategy. It is actually a very dangerous approach. It can easily get things out of hand. And that risk is still very much in the air. We are not out of the danger zone.

Iranian leaders think they are now in a stronger position. That’s probably the reason for the attacks. They wanted to show they can strike a country as heavily armed as Saudi Arabia is. A country that is a close ally of the Americans. They wanted to be seen as a sophisticated military power. And send a message that it is better to negotiate with them than to confront them. The problem is that they have little support outside the small circle that is constituted by a few client governments and a couple of armed groups. Bigger countries will choose the Saudi side, if they have to. And the extensive sanctions the US has imposed on them will ruin their fragile economy and will create further opposition to the clerics that control Iran’s power machinery.

I can only anticipate disaster for Iran, if they continue to strike the neighbours and to make bellicose announcements. Therefore, I see the attacks against the Saudi refineries and plants as a very serious miscalculation. It is a tactical victory and a strategic error.

Hormuz tensions

Yesterday’s attacks on two petrochemical tankers sailing in the vicinity of the Strait of Hormuz should ring strident alarm bells. They make obvious there is a strong player that is betting on escalating the tensions in the region. And the fact of the matter is that we do not know who is playing such a destructive card.

We can try to guess based on a careful analysis of some nations’ strategic interests. However, at this stage to point the finger in one direction only contributes to augment the tension. It is certainly not the wisest approach. It should not be accepted.

The UN Secretary-General, António Guterres, should step forward and offer the organisation’s good offices to carry out an independent investigation of the incidents. The International Maritime Organisation could be part of it. In the meantime, he should dispatch a Special Envoy to the region. For instance, the UN Under-Secretary-General for Political and Peacebuilding Affairs. That move would help to lessen the regional political temperature.

European energy policy: a priority

Energy remains high in the list of strategic factors. Countries that matter pay a lot of attention to the issue. The U.S., for instance, managed to address it by investing heavily on shale rock exploration. They will become, within the next five years, the key exporter of oil, overtaking Saudi Arabia and Russia. Moreover, they are already a major exporter of liquefied natural gas (LNG). All that is fossil energy. Not what people would call environmentally friendly.

Europe must take a different route. At present, the EU imports 55% of all the energy it consumes, which means around €270 billion per year.  The EU imports 87% of crude oil it consumes. It is time to invest much more money on clean sources of energy, on diversification and on energy efficiency. Including on better performing engines and engines that can run on alternative sources of energy, such as hydrogen.

Europe must pay special attention to its energy policy. That includes the links between energy use and the environment and matters related to our own strategic sovereignty.

OPEC is moribund

OPEC, the oil countries organization, is less and less relevant. It´s deeply divided, it´s unable to attract new member states to join the 12 that make it, and its total production is less than one third of the overall oil production figure.

Today´s meeting has shown the impasse the organization is in. And the price of oil has tumbled as a result. 

Oil, economic recovery and key geopolitical areas of interest

The price of Brent Crude Oil has been relatively stable during the last 12 months. It has oscillated around US $105 and $108. During the last five days or so, it has even decreased slightly. I take this as an indicator that there is more serenity out there, among those who know what´s going on, than the events in Ukraine let us believe. This is certainly good news. We need calm waters out there. The economic recovery is still very precarious, particularly in the EU, and we can´t afford major disruptions. Oil remains an important factor in terms of the recovery and its price can have a critical impact on economic and social stability in Europe.

That´s why we have to pay more attention to the situation in Libya, Iraq, Nigeria, and also make sure that Iran plays ball as agreed and can be back in the oil market as an important supplier.

These are some of the countries that would call for more focus within the EU machinery.