One Year Into President Biden’s Disastrous Middle East Policies

On 17^th January, as if to mark President Biden’s first anniversary of Middle East policies, the Iran-backed Houthi rebels in Yemen launched drone and missile attacks on oil facilities near the airport and other sensitive targets in the United Arab Emirate’s capital Abu Dhabi, killing 3 and injuring 6 others. The following Sunday, the US military joined with the UAE to counter another missile attack by the Houthi rebels on an air base near Abu Dhabi where some 2,000 American service personnel are stationed. This involved the first firing by the US of Patriot missiles since the 1991 Gulf War. In a third attack in as many weeks, the Houthi militia last week launched ballistic missiles over Abu Dhabi which were intercepted by UAE  air defences during  an official visit to the country by Israeli President Isaac Herzog..

These attacks on Abu Dhabi, deep in the heart of the Gulf’s second richest and powerful Sunni petrostate, are the most serious escalation of tensions in the Arabian peninsula since the drone and missile attack carried out on critical Saudi Aramco oil facilities in September 2019 also claimed by the Houthis. The attack interrupted 5.7 million barrels a day of oil processing capacity or over 5% of global production, although much of it was brought back on-line quickly.

Diplomat-Speak

The Biden administration did itself no favours in these sequence of events, even if one holds off on the judgement that it was its very own actions that emboldened the Houthi rebels. In a frenzy to reverse all things Trump, President Biden unleashed a slew of executive orders in his first 12 days, exceeding in number the combined total of his two predecessors. This included one which rescinded the “terrorist organization” designation imposed by the Trump administration on the Houthi rebels. This was followed just days later by drone and missile attacks claimed by the Houthi forces on civilian targets in Saudi Arabia.

In diplomat-speak mode, US Secretary of State Anthony Blinken issued a “tough worded” response but not much else: “the United States strongly condemns the recent Houthi attack against Saudi Arabia…” One year later, after last week’s attack, Blinken once again “condemned” the attack while the national security advisor Jake Sullivan said “Washington would work to hold the Houthis accountable”. In the midst of the escalations in Middle East tensions wrought by Iran’s proxy militias – it is inconceivable that the Houthi attacks would not have been cleared by its paymasters – Secretary Blinken recently said that restoring the Iranian nuclear deal is “still possible” and talks in Vienna saw “modest progress” in the last couple of weeks.

The escalation of drone and missile attacks in the Arabian peninsula by the Houthi-rebels over the past year is a testament to the Biden administration’s zealous desire to resume the 2015 nuclear agreement with Iran which President Trump pulled out of in 2018. While the State Department cast the lifting of sanctions on the Houthi rebels as impelled by humanitarian concern, others see the move as one of several that the Biden administration pursued to appease the Iranian leadership in the path to reinstituting the Iran nuclear agreement.

No More “Maximum Pressure”…

President Biden has not lifted most of the sanctions imposed on Iran by his predecessor. Yet the lack of enforcement of existing sanctions, particularly on crude oil exports, has already provided some relief to Iran’s economy. It was brought to the brink of collapse under the previous administration’s “maximum pressure” enforcement of sanctions when oil exports dwindled to estimated lows of less than 0.5 million barrels/day, a small fraction of its pre-sanction volumes. The value of the Iranian rial currency fell by more than half in 2020 alone and the country faced one of its worst budget deficits since the theocracy came into power four decades ago. According to a regional economic survey, the Islamic Republic had only $4 billion of foreign exchange reserves in 2020, down from $122.5 billion in 2018. Last week, a leaked IRGC document warned of social discontent in Iran  rising to “a state of explosion” driven by a deteriorating economy beset by years of crippling U.S. sanctions and domestic corruption and mismanagement.

The Biden administration has stonewalled numerous letters sent by the Republican Study Committee, the largest conservative caucus in Congress, over the lack of sanctions enforcement on Iran. Over the past year, reports in the trade press pointed to increasing Iranian oil exports which skirted sanctions via “indirect” routes such as Oman, the UAE and Malaysia, most of which ended up in China. According to one estimate, Iran’s crude and condensate exports averaged 825,000 b/d in the first quarter of 2021, up from 420,000 b/d in third quarter 2020. While Chinese refiners have been “informally” importing Iranian crude oil over the past year, the country’s official customs data recently recorded the first imports of crude oil. It would seem that US sanctions are now openly being flouted in a test to see what the US is willing to concede in order to restore the Iranian nuclear deal.

The only leverage that the US has over Iran in the protracted Vienna talks – sanctions on oil exports – has been undercut by the Biden administration’s elevation of climate change as the “number one issue facing humanity”. Since its inception, the Biden administration prioritized “fighting climate change” across all levels of government and has done just about everything to wage war on US oil and gas. Upon attaining office, President Biden unleashed a series of executive orders to reverse his predecessor’s strategy of “energy dominance”. With these early moves and in the months since, he revoked permits for the Keystone XL pipeline to transport oil from Canada to Gulf Coast refiners;  halted oil and gas leases on federal lands; and suspended oil and gas leasing in the Alaskan Arctic refuge. More recently, his administration proposed methane emission restrictions that would make it more expensive to develop and distribute oil and natural gas in the United States and increasing the fees and royalty rate oil and gas producers must pay the federal government.

Average US regular gasoline retail prices rose to just over $3.40 a gallon on Friday — the highest since September 2014 — on the heels of international Brent crude oil prices which surged above $90 for the first time in seven years. President Biden – with a flailing presidency struggling with sagging popularity polls, soaring prices at the fuel pump and the worst inflation rates in four  decades — blamed the OPEC+ group of oil producers. US national security adviser Jake Sullivan had criticized big oil producers such as Saudi Arabia and Russia in OPEC+ for “insufficient crude (oil) production levels” back in August. The OPEC+ group promptly rejected Sullivan’s request to release more oil to world markets. Last week, in the shortest meeting so far in its history, OPEC+ kept to its unchanged plans for modest monthly increases in the group’s production schedule agreed since late last year.

…But Its Not Enough

In what seems yet another pre-emptive concession to Iran — like the lifting of the “terrorist organization” designation of the Houthis over a year ago — Secretary of State Antony Blinken restored on Friday sanctions waivers which allow foreign companies to work on Iranian civilian nuclear projects and include the unfreezing of an estimated $29 billion in bank accounts overseas. The Trump Administration had rescinded the waivers in 2020.

It is egregious enough that the Biden administration pursues new constraints on U.S. production of fossil fuels to “fight climate change” while at the same time blaming OPEC+ for high oil prices. But its continued appeasement of Iran over the past year to clinch an increasingly permissive nuclear deal – one which Israel has already claimed that it will not be bound by — has exasperated Republicans such as Wisconsin Representative Mike Gallagher. In a video clip posted when reports of the first drone attack on Abu Dhabi emerged, he reminded his Democrat colleagues that we don’t quite live in a ‘Model UN’ world where “everything is solved with sternly worded press releases and diplomatic deals in Geneva” and expressed his hope that “we don’t see the complete collapse of American deterrence.”

To the latest gift of sanction waivers and immediate access to frozen funds announced by Secretary Blinken, Iran’s foreign minister responded that the move was “good but not enough.” Here’s to betting that the minister doesn’t live by the rules of the ‘Model UN’ world and is not impressed by US deterrence.