PUTIN’S REAL TARGET

By Monica Crowley

politicalmavens.com
October 16, 2015

It’s the oil, stupid.

That’s what Russian President Vladimir Putin is really up to in Syria.

In the early 1970s, President Richard Nixon succeeded in pushing the Russians out of the Middle East. Today they’re back with a vengeance, thanks to President Obama’s policy of precipitous withdrawal from the region and overall neutering of American power.

Since Mr. Putin began his significant military deployment to Syria, observers have tried to get a handle on his motives — from propping up his ally, Syrian President Bashar Assad, to using the intervention as a distraction from his Ukrainian intervention, to weakening NATO to satisfying the goals of the Russian Orthodox Church, to re-establishing a long-term strategic foothold in the Middle East.

All of these motives may be true. But they miss his far bigger gambit: seizing control of the majority of the world’s oil.

Some, including Mr. Obama, have dismissed Mr. Putin’s moves as ill-conceived and a sign of weakness. But Mr. Putin has never been naive or aimless. He coldly pursues Russia’s national interests, and right now, its overriding interest is in reviving the Russian economy, which has been gutted by economic sanctions and cheap oil, and positioning Russia to be the globe’s oil overlord.

Cheap oil has most irritated Mr. Putin, which is why his Syrian adventure is really about directly threatening the nation doing Moscow the most harm — Saudi Arabia — by encircling it with the new Russian-led alliance of Iran, Iraq and Syria, and gaining control over the natural gas pipeline that originates in Iran and runs through all three countries.

This explains Mr. Putin’s new “intelligence-sharing” alliance with Tehran, Baghdad and Damascus, ostensibly to track the Islamic State, or ISIS, but really directed against Riyadh and the competing Saudi-Qatar-Turkey pipeline. Mr. Putin has long held the European gas market hostage to Russia’s reserves. Rather than permit the Iran-Iraq-Syria pipeline to threaten that control, he intends to grab effective control over it, thereby suffocating Saudi oil interests and seizing an even fiercer stranglehold over the European energy market.

He is going to decimate the Mother of all Oil Producers.

In the face of a glut a year ago, the Saudis raised output by 1 million barrels a day, well above their quota, to create an even bigger surfeit — partly to undermine U.S. shale producers.

The subsequent low oil prices have sent the Russian economy into a death spiral. The oil and gas sector accounts for 70 percent of total Russian exports, 52 percent of federal budget revenues and 16 percent of its gross national product. The Russian economy contracted by 2.2 percent in the first quarter of 2015, and by a devastating 4.6 percent in the second quarter. The value of the ruble has dropped by a staggering 50 percent.

As energy investor Gary Siegler puts it, “The Russians experience this as an economic war” — which to Mr. Putin is indistinct from a military one, so he has now joined both battles.

Under the pretext of defeating ISIS, Mr. Putin has sent Russian special forces into Syria and Iraq and is preparing to introduce up to 150,000 ground troops. The elite troops are not there to simply provide security but to call in airstrikes and carry out covert missions against the western-backed, anti-Assad rebels, so that eventually Mr. Putin can argue accurately that the choice in Syria is between Mr. Assad and ISIS. Pick one.

The Russian campaign against ISIS also puts the lie to Mr. Obama’s fairytale claim that he’s fighting the terrorists aggressively; Moscow is accomplishing in a few weeks what Mr. Obama hasn’t been willing to accomplish in over a year.

Further, Russia’s air defense missiles are in Syria for a purpose other than the mere protection of the Assad regime. When Washington was given less than an hour’s warning that the Kremlin was imposing, in effect, a no-fly zone in Syria and Mr. Obama had no response, Mr. Putin pressed on, ordering Russian warships in the Caspian Sea to fire long-range cruise missiles. These are warning shots to his deeper target, Riyadh.

Russia is surrounding Saudi Arabia with weapons, combat troops and alliances, including with Egypt and Israel, designed to make Riyadh an offer it can’t refuse: cut production so prices rise or else.

After all, once those 150,000 Russian combat troops are on the ground in Syria and northern Iraq, they’ll be there to stay. They’ll secure the Iraqi oil fields — which produce 4 million barrels a day — and the pipeline territory for Russia, thereby gaining even greater leverage over oil production and prices.

(Incidentally: Donald Trump was derided for arguing that the United States should have seized Iraq’s oil as repayment for its liberation. How ironic if Russia ends up controlling that oil.)

The Saudis know they can’t count on Mr. Obama. They watched as he betrayed America’s longstanding ally, Egyptian President Hosni Mubarak, and believes Mr. Obama has already betrayed them by legitimizing Iran as a threshold nuclear power.

The Saudis now see Russia on their doorstep, perhaps preparing to carve up Iraq with Iran, destabilize them and the oil supply, or even to join Tehran in prosecuting a hot war against Riyadh in order to allow the vast eastern Saudi oil fields to come under Iranian and Russian control.

Russia’s power play is working, as oil prices have ticked up recently. But Mr. Putin will not be satisfied with small victories. He’s in this for all the marbles.

Control the oil, control the global economy. And right now, Russia is poised to do both.