Thursday, October 30, 2014

Defeating ISIS - Is that the goal?

Why does everyone assume the current strategy regarding ISIS is to destroy them? I’ve heard “analysts” that are shocked that Turkey won’t get more involved in defending Kobani. Others, whether they be politicians or more “analysts”, declaring that the current U.S. air campaign will never fully defeat ISIS. “We simply must commit boots on the ground!” they say.

Geopolitics is cold and pragmatic. It’s never emotional. To quote Robert Strausz-Hupe, nation states are interested in “space and power”. As the German inventors of Geopolitik believed, a nation is either expanding or dying.  It’s a very imperialistic ethos but it’s a game that most of the world’s powers are engaged in. Yes, this includes the largest and most powerful empire the world has ever known...the United States.

So what then is the United States' ISIS strategy? If it’s not to defeat them outright what ulterior motives might be in play here?

Does history provide any kind of reference that we can gain insight from?

As I looked for a historical reference that might help us understand the current ongoing conflict with ISIS I decided to look for other ISIS like groups in the past. I didn’t want to focus on their obsession with establishing a caliphate. Instead I looked throughout history for smaller groups that employed similar tactics in the midst of larger more powerful empires. The use of extreme terror, beheadings, ideological, well funded, etc.

I came across a book of United States diplomatic correspondence from the 1700’s and 1800’s. Thomas Jefferson said this:

“That it was a law, that the first who boarded an enemy’s vessel should have one slave more than his share with the rest, which operated as an incentive to the most desperate valor and enterprise; that it was the practice of their corsairs to bear down upon a ship, for each sailor to take a dagger in each hand and another in his mouth, and leap on board, which so terrified their enemies that very few ever stood against them; that he verily believed the devil assisted his countrymen, for they were almost always successful.”

It was the bolded portion that got my attention the most - which so terrified their enemies that very few ever stood against them”.

Thomas Jefferson was talking about the Barbary Pirates. They were radical Islamists who attacked merchant vessels along the North African Barbary Coast. Today this area encompasses the modern states of Morocco, Algeria, Tunisia, and Libya. Piracy was the main source of income for these nations...and business was good. North Africa sat on the busiest trade route in the world at the time. The Mediterranean Sea trade route saw commerce from every major player in the world. The newest of which was the United States who, after losing protection from The British Navy and later the French Navy, began to see ship after ship fall to the Barbary Pirates. Not only were the U.S. ships and their cargo being seized but their crews were being enslaved as well. Keep in mind that, while this was going on, British and French ships were sailing through the Med unmolested.

Jefferson traveled to London and called an official meeting with the Tripoli Ambassador. He asked him point blank why the Barbary people waged warfare on them. Why did they hate a nation and people that had done nothing to provoke such a reaction? The Ambassador from Tripoli didn’t hesitate in his response:

“The Ambassador answered us, that it was founded on the laws of their Prophet; that it was written in their Koran, that all nations who should not have acknowledged their authority, were sinners; that it was their right and duty to make war upon them wherever they could be found, and to make slaves of all they could take as prisoners; and that every Mussulman who was slain in battle was sure to go to Paradise.”

You can find similar quotes today from ISIS leader Abu Bakr al-Baghdadi. ISIS and the Barbary Pirates have so much more in common than people realize. From a geopolitical perspective their goals are/were to dominate a geographic location using terror and ideology as their foreign policy. The Barbary Pirates were operating in between a host of larger more powerful regional players. They played it safe and chose not to attack British and French ships.

From the U.S. State Department:
“The two major European powers, Great Britain and France, found it expedient to encourage the Barbary States’ policy and pay tribute to them, as it allowed their merchant shipping an increased share of the Mediterranean trade, and Barbary leaders chose not to challenge the superior British or French navies.

Prior to independence, American colonists had enjoyed the protection of the British Navy. However, once the United States declared independence, British diplomats were quick to inform the Barbary States that U.S. ships were open to attack. In 1785, Dey Muhammad of Algiers declared war on the United States and captured several American ships. The financially troubled Confederation Government of the United States was unable to raise a navy or the tribute that would protect U.S. ships.”

It wasn’t like there was any secret on the radical ideology that the Barbary Pirates followed. It was widely and publicly known. The British Navy was the most powerful naval force in the history of mankind. Why wouldn’t it eliminate a clearly defined evil threat? Likewise, the French had their own impressive navy. Why did they stand by and watch the Barbary butchery in the most profitable trade zone in the world?

George Washington contemplated the same in a letter he penned from Mount Vernon:
“Mount Vernon, October 10, 1796.
Sir: Your letter of the 5th instant with its enclosure, came to hand by friday's post.
The extracts therein produced both pleasure and pain: the former, at hearing that our citizens are at length released from their unfortunate confinement in Algiers, the latter, to find that others of them have fallen into a similar situation at Tunis, contrary to the truce, and to the arrangement made with Mr. Donaldson.

'Tis difficult to understand precisely what the French government design relative to this Country, from the accounts given by Mr. Monroe.”

Washington’s confusion mirrors that to the confusion the media has regarding ISIS today. Why didn’t the world’s powers of the time (Great Britain and France) simply just remove the threat?
The answer is that the Barbary Pirates were useful. They kept emerging powers in check. That included the United States whose merchant vessels were in direct competition with those from Great Britain and France. The Barbary pirates were a means to an end. Even though they represented an extreme, evil and dangerous ideology. It didn’t matter in the grand scheme of things. 

The United States was backed into a corner. They either went to war to eliminate the threat or they suffered the losses and risked bankrupting their new nation. They would end up going to war, and the Marines would add a new line to their hymn.

So again, why is it assumed that the overall strategy is to destroy ISIS?

First of all from the Turkish perspective.

The Turks have been heavily criticized throughout the entire conflict. For not providing military bases to assist coalition strike aircraft, to not defending Kobani, etc.

Turkey is in a very awkward position. They have two immediate geopolitical goals that ISIS helps them achieve. The destruction of the Assad regime in Syria and the degradation of militant Kurds. The latter of which Turkey believes provide assistance to the PKK whom the Turks have labeled a terrorist organization.

The bigger picture reveals a much larger competition between Turkey and the Iranians. The ISIS threat to Assad is also a direct threat to Iranian influence. If Assad was no longer in power Syrian influence could be turned away from Tehran and toward Ankara. For this same reason, you’ll likely never see the other Arab nations fully commit to any kind of meaningful large scale assault.

Even though ISIS poses an eventual threat to Turkey and the rest of the Arab monarchies ISIS provides them all an immediate means to an end.

From the U.S. perspective.

Like Turkey and the Arab monarchies, the United States wants the eventual downfall of the Assad regime. In extension that leads to a smaller sphere of influence for the Iranians.

It’s obvious to everyone that airstrikes alone won’t stop ISIS. That’s not their goal. The airstrikes have two main goals.
  1. The first is to limit and specifically target radical groups that are looking to export terrorism. Groups such as al qaeda or groups within ISIS that want to take jihad away from the Levant region and go global. The United States is hoping to manage the growth of these cells and not allow the region to become a safe haven for terrorist groups to recruit and train in.

  1. The second is to make sure ISIS is pointed in the right direction. That means that they’re attacking Assad, Iranian assets, etc.

Also, like Turkey, the United States is in an awkward position. Taking sides is harder than it appears. Attacking ISIS leads to a stronger Assad which in turn strengthens Iran. Similarly, if the U.S. were to commit to fully supporting Iraq against ISIS the eventual outcome is familiar. A stronger Iranian influence in Iraq. All the current roads lead to a stronger Iran if ISIS were suddenly out of the picture.


Like the Barbary Pirates, ISIS today is a means to an end.The British and French couldn’t endorse the Barbary Pirates and openly support their behavior. To do so would be an endorsement for their radical and evil ideology. However, they had a problem with increased competition in the Mediterranean trade route. The United States was up and coming and their navy may one day be a potential threat. The British and French decided to let the Barbary Pirates operate as long as their geopolitical goals aligned.

ISIS is brutal, horrific and evil. They are the personification of everything we would rise up against to stop. However, we find ourselves in the same position that the British and French were in 1800. With our geopolitical goals aligning along with an extremist group. 

The world’s powers are trying to balance geopolitical motives against morality. Every time ISIS broadcasts another beheading that balance shifts. Eventually society will demand moral action from their governments. Until then, expect the players involved to milk this for all it’s worth.

Wednesday, October 22, 2014

Why is Oil Crashing? - What can history tell us?

James Fairgrieve was a British geographer and geopolititian in the early 1900’s. One of his theories was that imperialists throughout history had been primarily driven by the search for energy. Over the centuries the political center of the world usually shifts toward which source of energy is relevant at that time.

The 1970’s showed the world just how important hydrocarbons had become to the global economy. The Middle East became the political center of the world. OPEC would reduce oil output and embargo the West for supporting Israel. On top of that, the overthrow of the Shah in Iran would all but hault oil production for Tehran.

1970’s Oil Crisis

The result - oil prices went through the roof. Heavily industrialized countries that depended on oil saw stagnant economic growth. The world found themselves grouped as such:

  1. Heavily dependant on foreign oil supplies. Recession imminent. (Western Europe)
  2. Partly reliant on foreign oil mixed with a steady domestic supply. (United States)
  3. Domestic oil production is the primary source of GDP. (OPEC countries and USSR)

Oil became an extremely powerful tool the world’s geopolitical players would use to impose their foreign policy and ensure their interests.
History would later see Kissinger persuade the Israelis to leave the Sinai and the Golan Heights. The oil embargo would soon be lifted. Oil production would normalize and with that the Brent crude price per barrel would go down.

1980’s Oil Glut

Ronald Reagan would use the 1970’s energy crisis as a playbook for economic warfare. It’s rumored that President Reagan sent CIA director William Casey to Saudi Arabia in 1981 to initiate a lethal strike aimed at the Soviet Union’s pocket book.

The deal - Saudi Arabia was weak in military hardware. They were threatened on every border by Iraq, Iran, and the USSR. The Soviets had coveted the Middle East since before WW2.
Soviet Foreign Minister Molotov traveled to Berlin in 1940 for a meeting with Hitler. The reason? Hitler wanted to lure Stalin into an alliance. He knew that the best way to win a war in Western Europe was to ensure he didn’t have to fight the Soviets on his Eastern flank. Hitler and Mussolini both figured that Stalin wouldn’t intervene. Stalin wouldn’t risk spilling Russian blood for the sake of the English and French.
Hitler decided to dangle the idea of inviting Russia into the trio of Germany/Italy/Japan. A “Four-Power Pact” rather than the “Three-Power Pact”. Hitler’s meeting with Molotov was to discuss these terms and to divvy up the spheres of influence they would each inherit after the war.

What was Stalin’s primary condition for joining with Hitler? Straight from Molotov’s mouth:
“The first protocol, dealing with the spheres of influence, must recognise that the area south of Batum and Baku in the general direction of the Persian Gulf is recognised as the centre of gravity of the aspirations of the Soviet Union.”

The Russians were basically quoting James Fairgrieve. They recognized that the Middle East was now the “political center of the world”. It was the Russian “center of gravity”. The German’s, however, invented geopolitics and would never agree to this. Hitler never replied to Stalin’s conditions and the Soviets would never join the Three-Power Pact.

CIA Director Casey and President Ronald Reagan believed the Soviet’s still saw the Middle East as their “center of gravity”. The Saudis believed this as well. The deal was simple. The United States promised military backing and equipment so that Saudi Arabia could solidify their borders. In return the Saudis promised to defy OPEC and over flood the market with oil. The United States would also ramp up production. The result - The 1980’s Oil Glut. Oil prices dropped so low that the USSR lost billions per day. They would never recover and the Soviet Union inevitably would collapse.

There’s the history. What does that show us today?

Has anyone noticed their gas prices lately? Why on earth are oil and gas prices going down in a world that is ripped by instability? Here is a graph that shows oil prices over the past 6 months:

6 month brent crude.jpg

As you can see there’s been a dramatic drop in the price per barrel since mid June. What’s the catalyst making this happen?
  1. Dramatic increase in production from the U.S.
  2. Dramatic increase from Libya (despite internal turmoil).
  3. Saudi Arabia increases production despite OPEC objections (sound familiar?).

First of all, who benefits from this? Who gets hurt?


It’s hard for me not to quote Sean Connery from The Hunt for Red October, “Once more, we play our dangerous game, a game of chess against our old adversary.”

We’re pulling the same levers we’ve pulled in the past. It’s amazing that the Russians haven’t diversified their economy away from hydrocarbon sales. Reagan furiously opposed the Urengoi pipeline that began Western Europe’s dependency on Russian gas. He warned the Europeans that Russia would gain a significant strategic advantage over them, but the pipeline was built regardless.

We’re seeing the result of that today in the proxy war in Eastern Ukraine. It’s not a coincidence that as the Russians began to support the separatists in Eastern Ukraine the price of oil began to drop out of the cellar. The Ukraine crisis and this modern day “oil crash” happened one after the other. The United States has played this move before and the Russians know they have little to counter it with. Washington D.C. sent a clear message to Russia. That they’re not only willing but completely able to crash Moscow’s economy if provoked to do so.

Putin now has to try and increase demand so that the PPB (price per barrel) goes back up. Look for them to increase cooperation with China. China has the demand to effect the PPB. My guess is that we’ll see news come from that in the near future.


Tehran is in an interesting predicament here. Their heavily sanctioned economy is also primarily driven by hydrocarbon sales. At the same time they’re locked in intense negotiations regarding their nuclear program. This gives the U.S. and Saudi Arabia a lot of leverage. It may force Iran to make considerable concessions.

It’s important to note that, just like in the 80’s, we must have promised the Saudis….something. The Saudis main struggle right now is Iran. Proxy battles between the Iranians and Saudis are being fought all over the Middle East. In Yemen, Eastern Saudi Arabia, Syria, Iraq, etc. Even the Iranian/U.S. rapprochement itseIf is a major setback for the Saudis. If a deal was indeed made look for progress on one of these fronts. Would the U.S. consider backing out of the Iranian nuclear talks all together to appease the Saudis? I guess we’ll find out soon.


The situation in Libya is interesting. Quite frankly I’m shocked that Libya has been able to produce as much oil lately as they’ve been. The central government has had to relocate as militias have gained more and more power daily. Somehow, Libya was able to flood the global oil market with a billion barrels per day.

Where is the Libyan oil coming from? Primarily from the Waha oil field. The Waha oil field is operated by 3 companies: ConocoPhillips, Hess Corp, and Marathon Oil. All U.S. based companies. Draw your own conclusions there…


James Fairgrieve made an observation in the 1900’s that very well could have influenced Russian geopolitical thinkers for the entire century. What was theory in Fairgrieve’s time became very much the reality in the 1970’s and 80’s. The players back then are the same today. The conflicts are a bit different but the circumstances are remarkably the same. The biggest difference from the old Cold War to our new one today is in the timeline. Economic warfare such as this was Reagan’s knock out final blow. The United States this time has used it as their opening salvo.