Oil prices and Lebanon

by F. William Engdahl

The recent rise in oil prices above $53 a barrel on NYMEX has far more to do with events unfolding in the Middle East, especially Lebanon, than with any winter cold temperatures or weekly refinery levels in the US. The Washington Administration has demonstrated clearly that it is fully behind a dramatic change of status for Lebanon as a prelude to same for Syria. What is dawning on many oil traders, including Japanese trading companies and Chinese, is that this Washington pressure on Syria over the assassination of Al-Hariri has more to do with advancing a US strategy over the Middle East, the so-called Greater Middle East plan, than it does with Washington concerns for justice or Lebanese sovereignty.

The assassination of Lebanese leader Al-Hariri, a Sunni billionaire close to the Saudis, is being seen in many parts of the world, especially the Middle East, in the light of two interests. The first is the interest of Israel to eliminate the Hezbollah organization from Lebanon and Syria. The second is the interest of Washington to advance their five year program of war and regime change in the Middle East to establish a firm direct control over the region’s oil.

The assassination was one of utmost sophistication according to all accounts. Of course Syrian intelligence would be capable of such. But why? Because Al-Hariri had made recent calls for Syria to withdraw troops? Aljazeera reports “Al-Hariri’s assassination dealt a severe blow to Hizbollah which lost a strong ally in the slain billionaire. ‘Al-Hariri was engaged in contacts with his European friends to prevent them from putting Hizbollah on the list of terrorist organizations,’ as requested by Israel, said Nasr Allah, the Syria backed and Iran backed Hizbollah leader.” It would seem that Hizbollah was not behind the move.

If we go back to the 1996 Douglas Feith Richard Perle think-tank report to the Israeli Likud government of Bibi Netanyahu, “A Clean Break”, we find that the Pentagon architects of the 2003 Iraq war saw Iraq as but the first in a series of regime changes in the Mideast, and that next on their target list were Syria and its ties to Lebanon. The following quotes are taken from the report:

Under the subheading, Securing the Northern Border:

1. “8. Syria challenges Israel on Lebanese soil.
2. 9. Israel should engage Hezbollah, Syria, and Iran, as the principle agents of aggression in Lebanon by:
3. 10. Striking Syrian military targets in Lebanon, and should that prove insufficient, striking at select targets in Syria proper.
4. 11. Given the nature of the regime in Damascus, it is natural and moral that Israel abandon the slogan ‘comprehensive peace’ and move to contain Syria, … rejecting ‘land for peace’ deals on the Golan Heights.

Under the subheading, Moving to a ­Traditional Balance of Power Strategy:

1. 12. Israel can shape its strategic environment, in cooperation with Turkey and Jordan by weakening, containing, and even rolling back Syria.
2. 13. This effort can focus on removing Saddam Hussein from power in Iraq – an important strategic objective in its own right – as a means of foiling Syria’s regional ambitions.
3. 14. Damascus fears that a ‘natural axis’ with Israel on one side, central Iraq and Turkey on the other, and Jordan, in the center would squeeze and detach Syria from the Saudi Peninsula. For Syria, it would be a prelude to redrawing the map of the ­Middle East … .”

These excerpts come from the 1996 paper, prepared for the Israeli government by a private think-tank, The Institute for Advanced Strategy and Political Studies’ “Study Group on a New Israeli Strategy Toward 2000” a Washington/Jerusalem based think tank providing policy analyses for the government of Israel. This document is remarkable for its very existence because it constitutes a policy manifesto for the Israeli government written by members of the current US government.

It is useful here to note the reminiscences of former Bush Treasury Secretary Paul O’Neill, fired by Cheney and Bush for not being enough of a “team player”. O’Neill recalled his first Cabinet meeting with Bush in 2001. “The new Bush policy was an aggressive agenda for any president, but especially for someone who had previously shown little interest in international affairs. We’re going to correct the imbalances the previous administration on the Mideast conflict, Bush told his freshly assembled senior national security team in the Situation Room on January 30, 2001. We’re going to tilt it back toward Israel. … Anybody here ever met Ariel Sharon? Only Colin Powell raised his hand.”

O’Neill adds, “Bush was going to reverse the Clinton policy, which was heavily weighted toward bringing the bloody conflict between Israel and the Palestinians to a peaceful conclusion. There would be no more US interference; he would let Sharon resolve the dispute however he saw fit, with little or no regard for the situation of the Palestinians. The policy change was exactly as recommended by the Perle task force’s “Clean Break” report.

“Colin Powell, Secretary of State for only a few days, was taken by surprise. The idea that such a complex problem, in which America had long been heavily involved, could be simply brushed away with the sweep of a hand made little sense. Fearing Israeli-led aggression, he quickly objected.

“He stressed that a pullback by the United States would unleash Sharon and the Israeli army, recalled Paul O‘Neill, who had been sworn in as Secretary of the Treasury by Bush only hours before and seated at the table. Powell told Bush, the consequences of that could be dire, especially for the Palestinians. But Bush just shrugged. ‘Sometimes a show of strength by one side can really clarify things’, he said. Powell seemed startled, said O’Neill.”

According to the recall of O’Neill of that meeting, Rice, now Secretary of State, was at that time fully on board with the Perle-Feith Middle East regime change and pre-emptive war agenda : “Condoleezza Rice led off the discussion. But rather than mention anything about threats to the United States or weapons of mass destruction, she noted only that Iraq might be the key to reshaping the entire region. The words were practically lifted from the “Clean Break” report, which had the rather imperial-sounding subtitles: “A New Strategy for Securing the Realm.” Thus it would seem Ms Rice is more than behind the Clean Break war agenda since 2001 at least.

Overall goals?

If it is the case that Israel is using the events around the Al-Habibi death to move to the next phase of the transformation of the Middle East, Teheran is clearly aware of the possibility. In the Teheran Times of 2 March, the official paper writes, “(Lebanon Prime Minister) Karami’s resignation, the rise of anti-government groups, and the intervention of the United States and other Western countries in the internal affairs of Syria and Lebanon are some of the developments in the past month, particularly since the assassination of former Lebanese prime minister Rafiq Hariri last February.”

“The events seem to be a prelude to the changes the U.S. and other Western countries hope to implement as part of the Greater Middle East Initiative. The Hariri assassination is still shrouded in ambiguity and the agents behind the killing have not been identified yet, but various Lebanese parties and groups are exploiting the event, which will not help Beirut solve its problems. The assassination of Hariri has given Israel and the United States a pretext to target Lebanese parties, and especially Hizbollah, in retaliation. They also aim to foster more division in the Lebanese political scene.”

“Israel, the United States, and other Western countries are intervening in Lebanon’s domestic affairs in order to isolate Syria and sever the Tehran-Damascus-Beirut link.

Since the U.S., Israel, and the European Union believe the Palestinian cause is winding down because Mahmoud Abbas (Abu Mazen) has assumed the post of Palestinian Authority president, they are heaping pressure on Syria with the aim of destroying the Palestinian resistance movement and Hizbollah, the two main anti-Zionist groups.”

This all suggests that the new Washington Administration is even more consolidated around the strategic agenda of the neo-conservative hawks in the Pentagon and Office of Vice President Cheney, now with the CIA and apparently also the State Department fully on board. The fact that France’s Chirac has opportunistically backed the Bush call for immediate regime change and Syrian withdrawal of troops in Lebanon suggests that France has been given a little “piece of cake”, perhaps a chance to regain some of its earlier influence in Lebanon. In any case, the developments around Damascus and Washington since the assassination suggest that the long-term Pentagon regime change agenda of Perle, Wolfowitz and company is moving yet a major step further toward Mideast transformation. The fact that the roadmap is so openly an Israeli Likud roadmap for change is not lost on regional players.

A February 26 report run by Reuters, cites US diplomatic documents, “In its drive to stop Iran gaining any ability to make nuclear weapons, the United States is ready to give European allies only until June to cajole Tehran before Washington seeks UN sanctions, U.S. diplomatic documents show.”

Former UNSCOM arms inspector, Republican ex-Marine Scott Ritter, stated recently in a talk in Washington State that Bush had “signed off” on a decision to bomb Iran in June. He says Seymour Hersh will give details in an article in the New Yorker. This attack would be a huge risk, further destabilizing all of Southwest Asia, and undoing any recent improvements in the trans-Atlantic relationship.

Perhaps the US calculation is as follows. Despite the love-fest in Europe last week between Bush and various Europeans, especially Chirac, the Pentagon hawks’ project is on track. Europe will protest and NATO will suffer. Bush’s team will likely risk that. They will woo France with a big role in Syria and Lebanon, the former French territory from World War I and Sykes-Picot deals. If the attack on Iran somehow leads to regime change, they’ll divide up the spoils there, as in Iraq, with loyal Britain.

This all suggests that world oil prices are set to become far more volatile along with perhaps the dollar as oil-dependent China and other countries try to use the weapon of dollar pressure to restrain Washington. OPEC just mentioned a “possible though unlikely” oil price of $80 in the coming two years or so.

The recent South Korea statement of intent to lessen dollar reserve dependency and diversify, followed only days after with a denial is indicative of the potential whack Asian central banks could deliver the US financial domain at present. It is a highly unstable environment for the dollar and for oil. Washington seems unconcerned about either.