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Saturday, October 07, 2006

Never heard of Khuzestan? Get ready to.

[UPDATED 10/9/06]

With navy deploying its assests, including aircraft carrier battle groups, minesweepers, anti-submarine forces and an amphibious strike group that includes a marine expeditionary unit, war seems quite possible with Iran - and sooner rather than later. US forces have been drilling for various Iran attack-related scenarios, with more drills on the short-term horizon, including anti-submarine drills and nuclear attack drills. Anti-submarine and minesweeping drills involving a Middle East adversary can only mean Iran.

Many interesting articles have been written lately about America's war plan, mostly focusing on the air campaign that is likely to target Iran's supposed nuclear assets. As many know, this attack may include tactical nuclear strikes since Iran's alleged nuclear facillities are buried deep in the ground. Below is a list of the three analyses I have found most informing on the broad matter of war with Iran:
  1. The March to War: Naval build-up in the Persian Gulf and the Eastern Mediterranean by Mahdi Darius Nazemroaya
  2. US vs. Iran: Is an attack inevitable? by Abbas Bakhtiar
  3. The March to War: Iran Preparing for US Air Attacks by Mahdi Darius Nazemroaya
As insane as it seems, war with Iran seems a legitimate and near-term possibility. But why? The WMD argument seems, as was the case with Iraq, to be a charade. Even US intelligence agencies estimate it may be as long as a decade before Iran gets the bomb, assuming such a program even exists. Another potential cause cited by US forces, allegations of Iranian support for insurgents in Iraq, suffered a blow today when British forces revealed they have found no evidence to support such a claim.

So what's the real reason? Iran is poised to open its own oil market, called a bourse. The opening of the Iranian bourse will represent a significant challenge to the US because Iran plans to switch from the dollar as the currency of oil transactions to the euro and it's own Rial. Some may remember that Saddam Hussein switched from the dollar to the euro as its oil currency in 2000. After the US invasion, the occupation switched it back to the dollar. Venezuela and Russia have indicated they may switch to the euro as well.

The reason this is significant is that the dollar is now the currency of oil transactions, meaning that oil sales at the various international oil markets are demarcated in dollars. That means that because there is a constant demand for oil, there is a constant demand for dollars. This artificially inflates the value of the dollar much beyond the true value it would otherwise have, given our trade deficit and national debt. Maintaining the dollar as the reserve currency of international oil gives the US a lot of international leverage, not to mention allowing it to print money without it becoming inflationary - a tremendous advantage given the massive national debt.

As Mike Whitney wrote in February 2006,
The bottom line on the bourse is this; the dollar is underwritten by a national debt that now exceeds $8 trillion dollars and trade deficits that surpass $600 billion per year. That means that the greenback is the greatest swindle in the history of mankind. It’s utterly worthless. The only thing that keeps the dollar afloat is that oil is traded exclusively in greenbacks rather than some other currency. If Iran is able to smash that monopoly by trading in petro-euros then the world’s central banks will dump the greenback overnight, sending markets crashing and the US economy into a downward spiral.
Or, as George W. Bush himself said in 2005,
"A successful Iranian bourse will solidify the petroeuro as an alternative oil transaction currency, and thereby end the petrodollar's hegemonic status as the monopoly oil currency. Therefore, a graduated approach is needed to avoid precipitous U.S. economic dislocations. This notion that the United States is getting ready to attack Iran is simply ridiculous... Having said that, all options are on the table."
Which brings us to Khuzestan.

Khuzestan, situated in the southwest of the country near Basra, is where 90% of Iran's oil production comes from. Oil workers there were instrumental in the overthrow of the Shah in the revolution and continue to trouble the regime with strikes and other disruptions. Workers there recently staged demonstrations demanding payment of back wages.
Nasser Bani Assad, spokesman for the British Ahwazi Friendship Society, said: "Mahmoud Ahmadinejad came to power proclaiming that he would tackle corruption and poverty. Under his administration, the situation facing Ahwazi workers is worsening. Instead of backing the workers, he is calling out the troops to repress them. If they refuse to work, they lose their jobs. This is not an option in a region like Ahwaz (Khuzestan), where unemployment is high, particularly among ethnic Arabs.

"After months of wage arrears many feel they have nothing to lose by going on strike and taking to the streets in protest. Workers are struggling to feed their families and pay for housing. Yet, the Ahwaz region is one of the most oil rich in the world. The oil revenue is going straight into the pockets of the mullahs while workers are forced into virtual slavery. Iran is breaking international labour codes and should be chastised by the international community for its poor treatment of workers."
And unrest has been growing over the last year or two.

Khuzestan is also largely Arab, not Persian and separatists there often refer to the region as "Arabistan". It's the birthplace of the British Petroleum. And it was the main target of Saddam Hussein's doomed invasion in 1980. British troops occupied it during WWII. When the locals got upset about foreign ownership of their oil fields, the CIA overthrew the populist Mossadegh regime and installed the Shah, who handed control of the fields back to the colonials.

The region remains unstable and Iran has accused British forces of engaging in destabilization operations in there, including bombings. Iranfocus.com reports that,
Iranian security forces have recently arrested a network of “separatists” in the Iranian capital Tehran and the oil-rich south-western city of Abadan, state television reported.

The report said that the network was being supported and strengthened by the intelligence apparatuses of certain neighbouring states and a European country which it did not identify.
These allegations came on October 2.

A US attack would likey involve a sweeping into Khuzestan - perhaps with an amphibious marine attack on the main port - resulting in occupation and the cutting off of the Iranian military from it's oil reserves, and also subverting the ability of Iran to pose a threat to the dollar with it's bourse trades, perhaps carving it out as an oil mini-state like Kuwait. Elites here at home increasingly speak openly about carving up Iraq and other parts of the Middle East.

Incidentally, it's worth noting that US force levels have increased lately to over 140,000 and the military expects it to remain there for the foreseeable future. Meanwhile, units in country continue to have had their departures delayed and others have been rushed to Iraq ahead of schedule.

For more on this, I recommend checking out KHUZESTAN: THE FIRST FRONT IN THE WAR ON IRAN? by Zoltan Grossman and Mike Whitney's Annexing Khuzestan; battle-plans for Iran. As hard to believe as it may be, even more war looms on the horizon.


Anonymous Anonymous said...

While I agree with the general analysis of the situation, I think that it's important to note a factual error in the article, namely, the Iran Oil Bourse did not in fact open in March. It has been repeatedly delayed, maybe because of the EU negotiations with Iran over sanctions vs. diplomacy. Anyway, the Bourse is expected to open VERY SOON. See this link:
If and when it does, the US economy will likely collapse. Whether or not Iran succeeds in opening its Bourse, the PetroEuro is inevitable eventually. Maybe when that happens, "Middle Class" Americans bought off by the privileges of the New Deal Keynesian war economy of the last sixty-five years will remember what international working class solidarity means.

Mon Oct 09, 12:02:00 PM 2006  
Blogger Phoenix Insurgent said...

The version above has been corrected to reflect this and other new information.

Mon Oct 09, 01:40:00 PM 2006  

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