A rare, high-level meeting of minds behind closed doors took place in Washington this week to confidentially discuss policy alignments on China, Iran and Syria between the United States and the Persian Gulf emirates. DEBKA-Net-Weekly’s sources in Washington report that for two days, Jan. 10-11, President Barack Obama, US Secretary of State Hillary Clinton, Saudi Foreign Minister Saud al-Faisal and Qatari Foreign Minister Sheikh Hamad bin Jassim al-Thani hammered away at points at issue.
While this was going on, the US House Majority Leader, US Rep. Eric Cantor (R-Virginia), was sent to the Riyadh and spent hours sitting opposite Saudi Oil Minister Ali al-Naimi in Riyadh to see how decisions made in the Washington marathon could be translated into actions in the Gulf.
The main topic was naturally the world oil market as affected by the tightening of the oil embargo on Iran.
President Obama and Clinton termed the embargo they are pushing in Europe and Asia against Iran's oil exports and its central bank-CBI a great success. The pointed to Tehran's threats to close the Strait of Hormuz against oil shipping from the Gulf – "not a drop of Gulf oil will go through " – as proof that those sanctions were working.
"Tehran was shooting itself in the foot," they said.
The fact is that Iran's bellicose statements quickly brought Vice Foreign Minister Zhai Jun running to Tehran in the first week of January to tell the Iranians to cool it.
While Iran is usually accounted China's biggest oil supplier, Saudi Arabia supplies 18 percent and Iran about 12 percent of its energy consumption. The strategic strait's closure would therefore instantly lock down a major portion of Chinese industrial and economic activity.
Saudis say they are fully able to make up oil shortages
The Obama administration congratulated itself on another score. Right after Treasury Secretary Timothy Geithner met Chinese Premier Wen Jiabao Wednesday, Jan. 11 to lobby for Beijing’s support for US sanctions on Iran's oil revenue, Wen promised to discuss the Arab Spring with leaders of Saudi Arabia, the United Arab Emirates and Qatar when he visited their countries later this month.
This was taken as willingness to cut down on China's oil purchases from Iran and make up the difference by buying more from Iran's rivals in the Gulf.
To give Beijing a push in this direction, Washington sources informed the Wall Street Journal Wednesday that China had begun to reduce its energy trade with Tehran. "This month, China’s crude imports from Iran have fallen by some 285,000 daily, more than half the total volume China regularly imports from Iran on a day-to-day basis. Chinese officials, moreover, have signaled that this reduction will continue into February and possibly beyond."
To avoid blame from Beijing for any oil shortfalls accruing from its support for sanctions, the Obama administration questioned the participants at the Washington get-together – and checked with Riyadh – about Saudi Arabia's reported difficulties in making up shortages induced by the new sanctions.
According to those reports, the oil kingdom was getting close to the limit of its production capacity. Saudi Arabia is now pumping just under record rates of 10 million barrels per day. It could manage an extra 500,000 barrels a day or so and, if pushed, could go up to 11 million.
But the Saudis denied this information as untrue, asserting they would have no difficulty in immediately stepping up daily production by 1-1.5 million barrels a day if this was called for.
For Saudis all-out US sanctions are no substitute for military action
But our sources in Washington report that the Saudi foreign minister, for his part, was far from satisfied by the Obama administration's all-out sanctions campaign; nor was he impressed by the way top US officials, such as Defense Secretary Leon Panetta the Navy and Air Force chiefs Adm. Jonathan Greenert and Gen. Norton Schwartz were making light of Iran's ability to block the Strait of Hormuz.
Prince Saud demanded clear answers from the White House about when and under what circumstances President Obama would order an attack on Iran's nuclear weapon production facilities.
A senior Saudi source familiar with the Washington round table conference told DEBKA-Net-Weekly that while attaching the utmost importance to the US-led oil embargo on Iran, Riyadh does not believe it will go far enough to meet all the administration's objectives.
Riyadh regards a nuclear Iran as the biggest peril facing the oil kingdom. So while crediting the US with willingness to prevent Iran obtaining a nuclear weapon, Saudi Arabia still insists on the US administration providing an unequivocal, detailed statement of intent.
In this context, the Saudi prince questioned Obama and Clinton closely about the sequence of events around the Strait of Hormuz last week, according to the same Saudi source.
He wondered how it happened that Friday, Jan. 6, when Tehran's threats to bar the strait to reentry by the USS Stennis aircraft carrier were most strident, that same carrier mounted an expedition to rescue 13 Iranian sailors from Somali pirates opposite the Omani capital of Muscat.
While humanitarian gestures were all well and good, Saud said, he was puzzled by the sudden US decision to rescue the Iranian seamen 45 days after they were captured.
The Saudi foreign minister's tone was cynical. He seemed to believe that the rescue was a deliberate US ploy – both to defuse rising tensions around the key waterway and as an invitation to Tehran to come over and talk.
Riyadh is still skeptical about the steadfastness of Obama's intentions, fearing he may waver at any time from a head-on challenge to Iran's nuclear weapon ambitions and swing around to appeasement.
Saudi al Faisal found the withdrawal of the USS Stennis from the Persian Gulf Wednesday and its replacement by USS Carl Vinson aircraft carrier and its strike group even harder to understand. It gave the impression that America was pulling back from tackling the Hormuz issue because no general changes horses in mid-battle.