The next report will cover the geopolitical position of a central but under-analyzed pillar of the emerging Eurasian Tripod, Iran. As an introduction to this report, I wanted to first comment on a few news links showing the intense recent cooperation of Iran with Russia and China.
The Russia-Iran and China-Iran connection is much, much less commented on than the Russia-China relation. I think this is a mistake as Iran is likely to greatly benefit from that support.
The country has been weakened by sanctions and its Eurasian allies were careful to not trigger the USA. After the war in Ukraine, and Pelosi's visit to Taiwan, we can expect Iran to receive a lot more much-needed technology and support.
Military
The first obvious field of cooperation is military and aerospace cooperation between Russia and Iran. The 2 countries have agreed to increase flights schedule between each other.
Putin is also visiting Iran, officially to discuss the Syrian peace process.
It is also rumored the visit is about buying Iran-made drones, not unlike Ukraine's purchase of Turkey-made drones. The Syria-battle-tested drones seem to prove the surprising advance Middle-East countries have made in developing cheap and reliable military drones.
The success of drone warfare in the Armenia-Azerbaidjan war and in Ukraine demonstrates the efficiency of this strategy. For that matter, Russian generals seem to think so and praised Chinese drones as well.
Quadcopter completely solved the Russian army’s “artillery reconnaissance, target designation and fire correction problems”.
Iran is also getting its satellites in orbit thanks to Russia and signed a new aerospace cooperation agreement. These satellites will be very useful for military spying and missile guidance systems, we are not talking of weather forecasts here.
Continuous cooperation between the 2 countries in Syria, but also in Iraq, and weapon deals are going to keep growing from now on. This likely includes nuclear technology, both civil and military, following a visit by Russia’s foreign minister Lavrov.
As a logical consequence, we can expect the Israel-Iran tensions to stay very high in the years ahead.
Energy
A long-lasting problem for Iran is access to modern oil & gas technology. While Russia’s technology is not as advanced as Western’s one, it is miles ahead of Iran’s. So the $40 billion deal with Gazprom to develop Iran deposits is a big deal. Contrary to the previously limited China-Iran deals, Russia has no reason to limit the cooperation to pretend to comply with sanctions against Iran.
Overall, we can expect Iran to keep growing production over the next decade. It will find plenty of buyers for its product in Asia, not only in China but also in India and South-East Asia. Pakistan which has been recently unable to find enough gas to avoid blackouts will probably also be a regular buyer of the growing Iranian supply.
International organizations
The biggest change the last month has brought about Iran is its integration is new non-Western organizations.
First, Iran is scheduled to join the BRICS, together with Argentina. This would really make the BRICS organization a juggernaut in commodities, with food (Brazil, Argentina, Russia), energy (Brazil, Russia, Iran), and metals (Russia, South Africa, Argentina).
Iran is commonly described and imagined in the West as backward, isolated from the rest of the world. Instead, it is soon entering an organization representing almost half of the world population. Its leader also hold regular direct friendly call with China’s leader.
We can expect Iran to keep building commercial relations with its fellow BRICS and SCO members. Its deeper integration into the Belt and Road network is also guaranteed.
As for China and Iran, the two countries have enjoyed profound friendship for thousands of years. Being a historical hub of trade and transport along the Silk Road, Iran has been a key partner within the Belt and Road framework.
New monetary systems
Iran is also deepening its ties with the SCO (Shanghai Cooperation Organization). It even proposes to create a new international currency able to fully bypass the eurodollar system.
The idea of such a new international reserve currency is supported by Putin. It is not just me, or Iran-Russia that expect it to happen.
The very respected lead analyst of Credit Swiss agree a “commodity-based monetary order” is being born.
In a note published earlier, Zoltan wrote this crisis is not like anything we have seen since President Nixon took the U.S. dollar off gold in 1971 – the end of the era of commodity-based money.
When this crisis is over, the U.S. dollar should be much weaker.
From the Bretton Woods era backed by gold bullion, to Bretton Woods II backed by inside money (Treasuries with un-hedgeable confiscation risks), to Bretton Woods III backed by outside money (gold bullion and other commodities), Zoltan believes the global monetary system will never be the same post the crisis.
Middle East
I already mentioned Syria, and it is a lengthy article in itself to explain what is going on there. But Russia-Iran-China cooperation is not limited to Syria.
Irak is an important focal point, with plenty of under-developed oil & gas reserves at a ridiculously low production cost. Russia can count on well-established networks, like for example Yuri Shafranik’s.
Almost unnoticed, these efforts go back a decade at this point, and Russia and China essentially control Iraq’s oil. With Iranian influence over the country’s politics, it is questionable if Iraq will manage to be anything but a puppet state of the Eurasian Tripod in the long run.
Central Asia
Until recently, central Asia was somewhat of a disputed region between Russia, its most recent controller, Iran, its historical controller, and China, which dominates the region's economy by its sheer size.
In the West, we have already forgotten the Kazak quasi-revolution of this January, and barely paid any attention to the Uzbek unrest of July. But the Eurasia power did not.
Each of the 3 countries is now getting pushed together by American pressure. They are mot likely than not to find a compromise over the control of the “-Stans” to avoid any risk of colored revolution/local insurrection. Please take note from the previous link that China's official media itself call these unrests “colored revolution”, copying Russia’s position.
Worse, the pandemic is yet to be effectively contained, making people in the five countries more vulnerable to instigation and prone to violence, a weakness that some external forces have exploited to foment trouble in the Central Asian region, even encourage a "color revolution" in some countries.
(…)
Now that Kazakhstan has controlled the riots, let's hope all the Central Asian countries will take measures in earnest to boost development and strengthen their security so as to deter foreign forces from interfering in their internal affairs.
Next
I will soon publish a complete analysis about Iran, its goals, capacities, weaknesses, and the consequences it might have on global equities and specific markets.
The report is almost fully written but will take a few days for editing.
Stay tuned.