China to Help Saudi Arabia Gain a Nuclear Weapon
The US oil embargo on Iran has had some wayward consequences.
First of all, the Obama administration and the American media are trying hard to show the embargo has gained a key participant even before it is actually imposed. How are they doing this? Well, by holding up the slowdown of China's oil purchases from Iran this month which are down from its usual volume of 466,000 million barrels a day to 285 bpd.
The halving of Beijing's oil purchases from Iran is, on the face of it, a sensational win for US pressure on China to join and US Treasury Secretary Timothy Geithner's visit to China in early January.
But, unfortunately, it has nothing to do with the oil embargo. China and Iran are in a financial debate over how to calculate the oil already shipped to China, how much Beijing paid for it and how much is still owing. Iran's "bazaaris" and Chinese traders are reputed to be the toughest hagglers on earth. Rather than pay up or compromise, China is digging its heels in and cutting down on its purchases as part of the bargaining process. Beijing has never promised Washington or any Middle East parties it will not go back to importing all the oil it needs from the Islamic Republic after the dispute is settled.
More creative numbers-crunching by the sanctions promoters takes the figures of European oil purchases from Iran, which come to 787,000 barrels a day, and add them to the reduced Chinese volume and come up with an amazing cutback of more than 1 million barrels a day, nearly half of Iran's total oil exports of 2.2 million barrels.
But even if the Europeans do eventually decide to ban crude imports from Iran, they will not execute that decision until after the winter of 2013. No one can tell what will happen in Iran or the Middle East by then.
Tehran and Riyadh trade insults
At the moment, just as President Barack Obama signed into law sanctions on Iran's national bank, the CBI and its oil industry and exports, holding in abeyance the order for execution, the European Union has pledged oil sanctions in theory but still has a long way to go before implementation.
The wishful thinking in pro-sanctions Washington circles has gone so far as to posit Iran being stuck with half its oil production with no buyers and having to park 40 million barrels in giant tankers outside the Strait of Hormuz.
In a connected episode this week, the two big oil rivals of he Persian Gulf, Iran and Saudi Arabia, engaged in a heated war of words over the Saudi pledge to promote the embargo by making up any shortfalls of Iranian supplies.
Saudi oil minister Ali Naimi pledged Monday, Jan. 16, to boost the kingdom's production by as much as 2.7 million barrels a day, not just replacing the volume of Iranian exports but topping it.
Iran's Foreign Minister Ali Akbar Salehi responded ominously the next day: "We invite Saudi officials to further reflect on and consider their pledge to make up for any cut in oil exports," he said.
Less diplomatically, Ali Khatibi, Tehran's representative to the OPEC said, "If they (Saudi Arabia and the Gulf states) give the green light for replacing Iran's oil, these countries would be the main culprits for whatever happens in the region."
Wednesday, Jan. 18, high-ranking official circles in Riyadh termed these remarks "piracy, or at least the work of bandits."
US oil embargo causes China to turn to Saudis
DEBKA-Net-Weekly's sources report there is much more at issue between Riyadh and Tehran than competition for the world's oil markets.
Tehran and Riyadh are going head to head over a quite different issue, one which the Obama administration failed to foresee as emanating from its demand that Beijing cut down its oil supplies from Iran. When China turned to the Saudis as its replacement supplier, Riyadh proposed a deal, as the result of which Saudi Arabia and China quietly signed a nuclear cooperation Monday, Jan. 15, at the King Abdullah City of Atomic and Renewable Energy near Riyadh.
The occasion was attended by King Abdullah and Chinese Prime Minister Wen Jiabao, and a large gathering of high-ranking Saudi and Chinese officials.
All the top Saudi royals were present indicating that this was no signing of an ordinary document but the conclusion of a historic accord.
Among them were Saudi Crown Prince Nayef, Interior Minister; Minister of Defense Prince Salman; Director of General Intelligence Prince Muqrin; Foreign Minister Prince Saud al-Faisal; Minister of State and President of the National Guard Prince Miteb bin Abdullah; Deputy Minister of Foreign Affairs Prince Abdulaziz bin Abdullah; and Minister of Petroleum and Mineral Resources Ali al-Naimi.
Saudis trade oil for Chinese aid in developing a nuclear weapon
This glittering royal lineup headed by the king would not have turned out for a mere technical accord on nuclear cooperation. It was in fact the key step for the oil kingdom to go forward and develop its own nuclear weapons program with China's assistance.
For the past two years, DEBKA-Net-Weekly has been reporting that King Abdullah City of Atomic and Renewable Energy is the site assigned for this program.
At this point, our sources have no information on the financial scope of the Chinese-Saudi transaction or the timetable stipulated for the Saudi program to reach its nuclear objective. But an intrinsic part of their deal is clearly a Saudi guarantee to cover all China's oil needs if Iranian supplies become unavailable.
It also gives Beijing the chance of dickering over the price of its oil purchases.
While the Sino-Saudi nuclear deal struck alarm in Washington, Iran's leaders were beside themselves, according to our Iranian sources. They asked bitterly if they had fought the West and Israel for years over their nuclear program – only to have a Saudi-Chinese nuclear bombshell dropped behind them and their most devout ally China stabbing them in the back.
Beijing no longer calls Iran its only strategic partner in the Middle East; Riyadh shares that privileged status with Tehran.
Until this week, the ayatollahs were sure Iran would play solo as the Persian Gulf region's only Muslim nuclear power. Now Sunni Saudi Arabia is about to share the stage.
We have certainly not heard the last word on the subject from Tehran.