Iran is Ready to Crash Pipelineistan

March 30th, 2015
in Op Ed

by Pepe Escobar

Appeared previously at Doomstead Diner 23 March 2015

Way beyond an Iran nuclear deal, and way beyond the end of a nasty economic siege that's been in place for 35 years since the Islamic Revolution, the coming Western embrace means above all that Iran is now ready to crash the chessboard I call Pipelineistan.

Follow up:

By the mid-2000s, one of the top mantras of energy analysts in Iran and across Asia was what was known as the Asian Energy Security Grid. Translation: a pan-Asian integration via energy flows of the region's oil and gas. Pipelineistan connected these relevant dots in the Eurasian chessboard.

Washington was always set on stopping Pipelineistan in its tracks. Case in point: the Baku-Tblisi-Ceyhan (BTC) pipeline, a Dr. Zbig "Grand Chessboard" Brzezinski brainchild that was built for almost $6 billion as an explicit geopolitical weapon to bypass Iran's energy exports.

Another example is frantic efforts by both the Bush junior and Obama administrations to derail the former Iran-Pakistan-India (IPI) pipeline, also known as "peace pipeline", which may eventually be built and named IP - for Iran-Pakistan.

Now it's a completely different story. Even U.S. Big Oil is salivating at the prospect of doing business with Iran on energy.

Beijing, for its part, already is. Iran is invariably among China's top three energy sources. Not by accident, Chinese President Xi Jinping will soon visit Tehran; Foreign Minister Wang Yi has already promised "dramatic" announcements - and China's Foreign Ministry is not exactly prone to hyperbole. For Beijing, the energy relationship with Tehran is no less than a matter of national security.

China also remains a top client of Saudi oil. But buying oil from the Persian Gulf and having it shipped via the vulnerable Strait of Malacca is not exactly Beijing's idea of a bright future.

The vastly complex Chinese energy strategy, bent on diversification of sources, could be summarized as "escape from Malacca". And now, with ISIS/ISIL/Daesh holding large - though mostly empty - parts of "Syraq", the Middle East as a whole becomes even more of a problem.

Beijing is alarmed at the growing possibility of a demented Caliphate export contaminating large swathes of Xinjiang - the key Chinese node of the upcoming, overland New Silk Road.

The key branch of the overland New Silk Road - the other one will be via the Trans-Siberian - links China via Xinjiang to Central Asia, Iran and Turkey.

So Beijing needs to maintain excellent relations with both Iran and Turkey. At the same time, it must avoid antagonizing the House of Saud. In energy terms, the ideal solution would be massive investment in gas pipelines originating from Iran and linked to Turkmenistan, which is already linked to Western China via pipelines built by the Chinese.

Even during the Ahmadinejad years - via a "Look East" policy - Iran was already going into overdrive to make Pipelineistan a reality. This involved courting China, India and Pakistan, by keeping steady relations with Turkey.

The anticipated Asian Energy Security Grid, in many aspects, is already a go. Yet the big prize is, of course, the EU. There is talk about forming a Eurasia Security Grid.

For years, I've heard the same mantra in Brussels: If only we could buy loads of oil and gas from Iran to escape the grip of Russia's Gazprom - but the Americans won't let us.

The time is now. Euro Big Energy is dying to hit the road to do business with Tehran. The figure from eight years ago, given to me by an Iranian energy analyst, hasn't changed much. Iran needs roughly $200 billion to upgrade its energy industry and start re-exporting oil en masse.

So it's no wonder Tehran's already holding close talks with Switzerland and the EU to work out the initial details of selling more gas to Europe. Hiking oil exports - from currently 1.1 million barrels a day to roughly 2 million - may also be feasible. But to go beyond that would take years and a veritable tsunami of investment.

At the same time, the major European players are willing and able to make a geopolitical shift when it comes to oil and gas. All (energy) roads now lead to Tehran.









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