By Abbas Tabatabayi
The crisis in Venezuela, as well as oil and precious metal sanctions on the regime in Iran, has taken the headlines in the past few weeks.
In this paper we intend to demonstrate that the sanctions are basically the key component of development of illegal and clandestine business around the globe. In the aftermath of sanctions, the oil producing nations, The Press and the organizations such as PBO and CBI will have no capability to monitor the sale of national wealth since they have no access to proper documentation and banking procedures, hence the reports about illicit money belonging to individuals confiscated by the Western countries for money laundering for the rougue and corrupt regime in Iran.
As a result, religion and politics create bedrock for the most evil and opportunistic people to take advantage of the crisis and reap large profits, while at the same time using that profit to consolidate their illicit business. On the other hand, there are corrupt businessmen and women who are willing to extend their services to the US adversarial regimes for the right price. From the standpoint of “world without borders”, religion and politics are the main source of suffering for masses around the world and the current exploitation in the world is due to their impact.
Illegal oil Business
Recently the US canceled the waivers for countries buying oil from Iran. Yet the oil prices have been steady and it remained below $70 per barrel considering the reports of higher US oil reserves and Saudi-UAE guarantees to supply enough oil to the market.
Despite the continued sanctions, the Islamic republic in Iran has survived them and this fact makes one question the effectiveness and the impact of these sanctions to begin with. One may surmise that “sanctions” are just a game designed for public consumption and for the media and also a game in which a puppet regime in Iran is being played with. In order to prove this claim, we need to scrutinize the data of Iran’s oil sale during the past decades and the best source would be the British Petroleum statistics presented in this video which seems to be the most reliable source among the experts.
History of Iranian Oil Production, 1980’s and before
Looking to the oil production and trade during 1960’s (figure 1), the global oil production in 1966 was 31 million barrels per day (MB/D) from which US, Saudi and Iran were producing 9, 2 and 2 (MB/D) respectively. Several years later, Soviet, Venezuela and Kuwait had gradually joined to the list of main oil producers. So that in 1971, US, Soviet, Venezuela were producing 11, 7 and 3.5 MB/D respectively, Iran and Saudi each were producing 4 MB/D and the global production had increased to 48 MB/D.
Figure 1: Oil Production Trend during middle of 1960’s
The total oil production of Iran and Saudi reached 14 MB/D during the oil crisis in 1974, while production of US and Soviet were 11 and 9 MB/D respectively. The consortium of oil companies were being blamed by the Shah because the Saudis were producing 2 MB/D more than Iran at the time. Indeed, the Shah threatened the consortium several times that he will not extend the agreement after 1979. However, he was ignoring the fact that the entire world blamed him as the key person responsible for shocking increase in oil prices. So it was not unexpected that the powers to be would not allow Iran to grow in oil production and supply. As a matter of fact, producing 6 MB/D by Iran, the country had not much influence in the global market, comparing the global production which was 60 MB/D during 1975 and 1978. However at the same time the Shah was portrayed as “the eagle of OPEC”, meaning the only responsible and decision maker in the hierarchy concerning oil price. At the threshold of Islamic revolution of 1979, Iran was barely able to keep the production at 5.5 MB/D, whereas the production for Saudi, US and Soviet was 9, 11 and 10 MB/D respectively.
After 1979 revolution, the Iranian oil production drastically dropped below 2 MB/D, while the global production increased to 65 MB/D and the oil price decreased. Following the damaging activities of the Islamic regime, including US Embassy seizure in Tehran, Iran was slapped with sanctions for the first time. In addition, the consortium and foreign companies left the country and the Iranian oil employees who were used to the times of Shah, going on strike and expecting to be paid as well, were not able to produce enough oil. In other words Iran was not able to increase production numbers (due to mismanagement) and to influence the market even in absence of the sanctions. The question is, did the Iranian economy suffer by the sanctions to the point of collapse? Not at all ! Not only sanctions did not stop them, but they also started an eight-year war with Iraq, which caused almost a trillion-dollar damage to the Iranian economy and infrastructure. In addition, the regime’s authorities conducted a series of illicit arms trade with different countries including Israel, which tells the reader more about the extent the regime is willing to do to survive and the weakness of the ideology behind the image of chanting “ Death to Israel” in government sponsored rallies.
So Iran had enough money to survive and to spend for procuring weapons. How did they manage to sell oil while being under sanctions? The answer to this question, also makes it easier to for us to understand how the regime has always ignored the sanctions as well as UN criticizing resolutions and is reacting to them aggressively. The point is those who impose the sanctions, also help to open other clandestine methods to bypass them. Oil must leave the region and instead it brings to the region, war and insecurity, genocide and displacement of millions of people. Basically this is a joint venture between politics and religion, to issue sanction and then to offer clandestine methods by illicit trades!
Some businessmen say that “Business only means business and the parties involved put trading ahead of the politics”.
Here we introduce one of the most famous examples of such tycoons, whose illicit business with Iran was always ignored by western powers, is Mr. Marc Rich! His role in orchestrating an illicit oil business with Iran during 1980’s and early 1990’s has been detailed in a paper published in The Economist journal on 2013. Mr. Rich used to scan the globe to forecast the crises coming, wars brewing or shortages looming. His ability to take advantage of the global crises, such as the Korean war, the Arab oil-export embargo and so on helped him to advance his business. For Mr. Marc Rich, demanding the goods with low price and selling with higher price was “like taking candy from a baby”.
He was able to take advantage from the Iranian revolution in 1979, in fact for him it was a golden opportunity . He established a profitable trade to buy Iranian oil with his offered low price and swap that oil on the global market and even sold it to Israel down a secret pipeline.
Soon he became the world’s largest independent oil-trader, with a turnover in of $15 billion in 1980. To out things into perspective, it is necessary to mention that the peak for Iran annual oil revenue before the revolution never exceeded $20 and it further decreased after the Iranian revolution.
The trade continued for about 15 years while the sanctions were being violated, the Iranian oil was being sold and ultimately turned Marc rich into a tycoon, gaining huge profit! The Iranian revenue of this illicit trade was being transferred to Israel and then the Israelis rushed to purchase arms for Iranaian and sell it to them through middlemen for several times the price and their profit during the Iran-Iraq war.
After several scandals such as Iran Contra, Mr. Rich illicit trade was exposed , then president Bill Clinton pardoned Marc Rich in 2001 after recommendations by the Israeli prime minister, an ex-head of Mossad and Mr. Rich’s ex-wife Denise, who generously donated to the Clinton Democratic campaigns. The 15-year-long illicit oil trade with the US adversary is pardoned, while probably at the same time the US navy was patrolling the Persian Gulf to enforce the US sanctions.
According to another paper published in the Guardian, Marc Rich known as the king of oil had said, “I deliver a service. People want to sell oil to me and other people want to buy it from me. I am a businessman, not a politician” and he also revealed “even Ayatollah Khomeini knew about the arms trade with Israel.”
The same story has been published in Haaretz, the Israeli newspaper while nobody dares to say to question Israeli people to find out how the Israeli authorities were working with the Islamic regime in Iran while at the same time this regime has always intended to annihilate Israel, especially at that time where almost all terrorist activities in Israeli soil was funded the Iranians! , but those terrorist activities were killing people not the. On top of that, the Iranian or Iraqi people who were massacred during the war, not the political authorities or the issuers of Sanctions!
Later rounds of sanctions
Although the sanctions were being partly in place after 1994, the Iranian oil production continued since the Mullahs probably found more other methods to sell the oil. During this period, there have been two different types of statistics available, the one published in Media (figure 2) which claims that Iran barely exports around 2 MB/D most of which has been shipped to South East Asia and the other one is the statistics published by the BP which reveals Iran has produced nearly 5 MB/D during the same time. Is the regime in Iran really under sanctions or not and how can this discrepancy be justified? If the oil export is being continued, how does Iran sell it?
Marc Rich has passed away, but the other ones following his footsteps are smart enough not to get involved directly in the illicit oil trade. The banking system is controlled by the west and no matter how the regime in Iran bypasses the sanctions and make a sale, as soon as the money is transferred though the banking system and when the right time comes, they block the accounts and freeze the assets for terrorism and even go after confiscating the money.
Figure 2: Iranian Oil Production Trend according to some Media
It takes a simple search in the oil market and other commodities to find dealers ready to work with Iran, they even have websites and can be found be a Google search. The Iranian regime has a plan to identify the Iranian dual citizens and lure them into doing business with the Mullah’s regime.
Iranian oil is being sold as much as the market demands. For the regime it does not matter if the oil sale money can not be transferred back to the country since the Iranian people are using worthless Rial which loses its value against Dollar by two third every four years. There is a shortage of Dollar inside Iran and Iranian assets have been losing value since the revolution and the country is in an economic free-fall.
The gloomy future landscape
What is going to happen next? Why have religion and politics come together to bring such a corrosive effect to our homeland? What is the plan?
Religion will play a major role in future conflicts, the Middle East and Iran geopolitical position in the region, puts Iran and Southern Iraq with a Shiite majority population at odds with the Arab league Sunni countries mostly opposing Iran and other non Arab Muslim countries such as Pakistan and Turkey who have better relations with Iran and at times cooperate with each other in the region. On the other hand, proxy wars in Syria and Yemen are sponsored by Iran Shia and other Sunni sates in the region trying to contain Iran.
What direction is this going to take?
Why would the rulers of 200 million Shia Muslims wage proxy wars against the rulers of 800 millions Sunni rulers and burn down the Middle East in war that will take innocent lives and exterminate the history and the culture of the region?
Figure 3: Shiite and Sunni Camps in Middle East
Here lies the answer, because the arms for oil trade must go on. It used to be called oil for food program during Saddam Hossein! Nowadays, the mafia of religion and politics do not want to continue that route, because the hungry and uneducated masses are mobilized to participate in wars much easier and there will be more weapons sold. This is the case of poor Afghan and Pakistani Shiite militants called “Holy Shrine Defenders”, going to proxy wars for Iran for a few hundred Dollars a month in Syria and some have never returned.
According to US Government statistics provided by US EIA state (Figure 4) in 2017, Venezuela clearly has the largest reserves of oil with 300 billion of oil barrels, so that crisis must extend to that country too!
Saudi is not the king of oil reserves anymore; they have almost 266 billion of oil reserves mostly located at Eastern Province of the country with majority of Shiite residents.
But more importantly is the total oil reserves of Iran and Iraq which exceeds 300 billion barrels mostly located at Shiite southern Iraq and also southern provinces of Iran and its offshore areas of the Persian Gulf. that is the reason why the idea of the establishment of Shiite States is currently viable. that means if Iran, Iraq and the Saudi were broken into smaller states, the Shiite majority area on that map will be sitting on top of 500 billion barrels of oil. Obviously in order to make this happen, many wars must be fought in the region which will guarantee the sale of arms into the region and the continuation of arms for oil trade policy.
Figure 5: Proven Oil Reserves in Millions of Barrels (US EIA, 2017)
It is said that the Middle East eventually will be redrawn into the following geographical map. Certainly, no one will benefit from this except for the hideous mafia of religion and politics, which will earn the profit of such instabilities. The one who promoted Islam, developed the role of Mullahs and Imams, started wars and during all these years through clandestine means purchased the region oil and sold weapons sometimes paired with sanctions, they still have more destructive plots to come.
The region has no choice but to wake up, lending hand to each other and make a stand against politics and religion in the region and stop them.
Figure 6: Map of the New Middle East
Abbas Tabatabaei is an Iranian metal and energy expert, specializing Mining education (MSc.) and 18 years experience in mineral and energy industries inside Iran and abroad.