The American Attack on Syrian Terrorists,Going Up the Food Chain or Chad Gadyah

Lame duck President Bush still retains some strength in his loins. While Europeans and even some Israelis are courting Syrian President Bashar Assad, the American attack by the CIA/Special Forces on a terrorist base inside Syria proves that no terrorist will find shelter in Syria from where he can attack American troops in Iraq with impunity.

A Washington Post report this morning indicated the extent of the Syrian-based terrorist "ratline": According to captured al-Qaeda in Iraq documents, "more than 500 foreign fighters ... had entered from Syria. At least 95 Syrian 'coordinators' were involved in moving the foreign fighters. Many recruits reported to their handlers in Iraq that they had passed through Damascus, Syria's capital."

The American raid killed Badran Turki Hishan al-Mazidih, nicknamed Abu Ghadiyah. The founder of the al-Qaeda in Iraq terrorist group, Abu Musab al-Zarqawi, had appointed Abu Ghadiyah commander for Syrian logistics in 2004. Al-Zarqawi was killed in 2006.

A U.S. intelligence official cited by the Associated Press claimed there was "information that Abu Ghadiyah was about to carry out an attack in Iraq and that this had led to the [American] raid."

It is apparent that Abu Ghadiyah had been running his base in Syria for several years and may have even led some of the terrorist operations himself.

The raid, like last year's bombing raid on a Syrian nuclear site, should be clear signals to Syria's leadership that they are in the cross-hairs.

"The logic of Syrian dictator Bashar Assad," The Washington Post opines today, "seems to be that his regime can sponsor murders, arms trafficking, infiltrations and suicide bombings in neighboring countries while expecting to be shielded from any retaliation in kind by the diplomatic scruples of democracies."

More than one nest of rats in Syria

Syria, of course, serves as the base for Hamas' headquarters and leadership. And Hizbullah could not exist without Syrian aid. The Lebanese-based Hizbullah, called the "A-Team of terrorists" by Deputy Secretary of State Richard Armitage, is one of the world's strongest and most dangerous terrorist organizations. Assad's regime provides rockets and missiles as well as the transport infrastructure that permits the transfer of Iranian weapons and Revolutionary Guardsmen through Syria into Lebanon.

Israeli Military Intelligence chief Maj.-Gen. Amos Yadlin told the Israeli Cabinet Sunday that Syria "has become the bargain basement for Hizbullah weaponry," reported Yediot Ahranot.

A major element in Syria's regional strategy is the destabilization of Lebanon, a policy that encourages its Hizbullah proxy to seize control of southern Lebanon, stockpile missiles and rockets, and threaten Israel again.

Pay attention to American explanations of the attack on the Syrian base that appeared in today's Washington Post analysis and ponder why the arguments should not apply to future Israeli actions in Lebanon or Syria:

U.S. military and intelligence officials and analysts have asserted for years that such strikes are justified if a country is unwilling or unable to control its own territory or the threats emanating from inside its borders. U.S. strikes can goad such countries into action, officials say.

The military's argument is that "you can only claim sovereignty if you enforce it," said Anthony Cordesman, a military analyst at the Center for Strategic and International Studies. "When you are dealing with states that do not maintain their sovereignty and become a de facto sanctuary, the only way you have to deal with them is this kind of operation," he said.

The war on terrorism is often conducted in the shadows by Special Forces and agents. Last year a train from Iran loaded with weapons bound for Syria and presumably Hizbullah derailed in Turkey. In July 2008 a massive explosion shook Tehran when a military convoy filled with weapons for Hizbullah exploded in a munitions warehouse in the suburb of Khavarshahar.

As of today, the American raid made it clear that hunting season on terrorists is still open through January. Hizbullah weapons stockpiles in Lebanon or Syria should be fair game.

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A Classic Response to an Anti-Semitic Propagandist

An American named Alfred Lilienthal died two weeks ago in his 90s. Don’t worry. I come to bury Lilienthal in dishonor; not to praise him. A strident anti-Israel propagandist in the 1950s, 60s and 70s, he hated Israel and the Jewish faith he was born into. Lilienthal warmly embraced the pistol-packing Yassir Arafat when he came to New York to speak at the UN in 1974.

Much of what I know about Lilienthal came from my mentor, Si Kenen (pictured with me years ago), the founder of AIPAC and Near East Report. Kenen began his campaign to beat back Lilienthal’s propaganda and slanders in Washington and the American press before I was even born.

Once, while I was serving as an editor and head of research at a Jewish organization in the U.S., I got a call from Leon Uris (pictured left) asking for my assistance. Lilienthal publicly challenged the author of Exodus to a debate. Uris tried ignoring him, but Lilienthal continued to hound him. “Who is this SOB?” Lee asked. The file I sent back to Uris (ne Yerushalmi) included details on Lilienthal’s embrace of Islam and his anti-Semitic utterances.

Within a few weeks Uris sent me a copy of his response to Lilienthal, and its content showed how great a wordsmith and man of (short) letters Uris was. It read: Dear Lilienthal: F*ck off. Uris.

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Watch the Price of Oil. This Is a Very Serious Issue

The world’s attention is focused today on the international financial crisis and the American elections. But another significant development is also taking place. Since the previous blog, the price of a barrel of oil has continued to drop precipitously, and as of this writing sank to under $70 per barrel, less than half of the $147 posting from July.

There are a handful of important ramifications:

• Will the extraordinary OPEC meeting next month in Vienna respond with major cuts in production to push the price back up? Some analysts suggest the market pressures could pull OPEC apart with petroleum “hawks” like Venezuela, Iran, Libya and Algeria pulling for cuts and the leading “dove,” Saudi Arabia, maintaining production levels.
  



• Iran and Venezuela require as much as $95 p/b to balance their budgets and continue their massive domestic and international subsidies. How will they respond to $50 - $60 p/b revenues?



• Will Russia, a major non-OPEC producer, join in cutting production to keep the price of oil high? Incredibly, today Russia’s central bank had to bail out Russia’s major oil and gas companies, including Gazprom, to the tune of $9 billion, suggesting major corruption in the companies. It appears that all that money that poured in over the last year was not used for industry exploration or development. Is anyone surprised?



• What will happen to the Russian-Iranian-Venezuelan axis in which Russia lent money to Venezuela to buy weapons, Russian oil giants promised to invest in Venezuela’s oil industry, and Iran agreed to invest hundreds of millions of dollars in Venezuelan projects?



Will the pending oil glut push state sponsors of terrorism to unleash their dogs of war in order to push the price back into the 3-digit range? U.S. counterterrorism officials worry about the two countries' connections, such as whether the weekly flights between Iran and Venezuela transport more than passengers.



• Will cheaper oil delay or cancel the development of alternative sources of energy?



• Will the inevitable price reduction at the gas pumps and heating fuel depots be soon enough and deep enough to lessen the recessionary pressures on the world economy?

Stay tuned for more analyses and citations on these critical issues.

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Inflating the Cost of Oil -- A New Factor in State Sponsorship of Terrorism?

Producing oil in some Arab states is almost as effortless as it was for Jed Clampett of Beverly Hills fame. In Saudi Arabia the “lifting cost,” or the cost to bring a barrel of oil to the surface, is $2.00. Yes, two dollars per barrel.

Lifting cost for other countries is not that much higher than in Saudi Arabia. In 2006, the average cost in Africa was $4 per barrel, in the U.S. $6.83, in Canada $8.30.

There are also “finding costs” for exploration and development of oil fields – about $5.26 per barrel in the Middle East to as much as $63.71 for U.S. offshore oil. Add to that taxes, transportation and refining costs. Nevertheless, the markup on the black gold is remarkable. As of this writing, the price of crude oil dropped to some $90 per barrel. In July, oil prices hit $147.

Saudi Arabia produces some 9,600,000 barrels of oil a day. Do the math: at $90 per barrel, the oil sheikhs and princes earn almost $900,000,000 (spelling it out, that’s nine hundred million dollars) a day. Iran’s Ahmadinejad and his Ayatollah masters produce 4,000,000 barrels a day, earning $360 million dollars. Hugo Chavez in Venezuela milks his black cash cow to the tune of $215 million dollars a day. Putin’s Russia – not a member of the Organization of Oil Producing States (OPEC), but cooperating with the cartel – produced about the same as Saudi Arabia -- 9,700,000 barrels per day – or close to $900,000,000 a day.

Pipelines and shipping routes may emerge as the new targets for international terrorists.

With the American deployment of troops in Iraq and Afghanistan easily costing $1 billion a day, it is no surprise to see why a wealthy and resurgent Russia feels that it can challenge the West today in Georgia, the eastern Mediterranean, the Arctic floor and in its support for Iran.

If that’s not a big enough reason for the United States to cut down on fuel imports, here’s another one. Cutting the cost of oil could directly bring down the Ahmadinejad regime.

The vast riches now flowing into the oil producers coffers are certainly lining the pockets of local leaders and oligarchs. But in some cases, the oil producers are undertaking ambitious and costly development programs and acquisition of new weaponry. Currently the income from oil usually exceeds the expenditures, but each country has a “break-even” point. If the oil income drops, the economic stability of the regime starts to rock.

A recent interview by a senior official in the International Monetary Fund (IMF) illustrates that point. Saudi Arabia requires crude prices to remain above $49 a barrel to avoid a fiscal deficit, Mohsin Khan, director of Middle East and Central Asia branch at the IMF, explained. Saudi Arabia depends on oil and gas sales for 90 percent of its export income, he said. “Saudi Arabia’s break-even price is the highest among the Gulf Co-operation Council countries because they are spending on a lot of projects right now, and oil money is used to fund these projects,” Khan said.

Other Arab countries in the Gulf have much lower break-even points, according to the IMF official: “The United Arab Emirates (UAE) will have a fiscal balance at an oil price of $23; if it goes below they would run a deficit. For Qatar, the break-even price is $24 a barrel,” Khan said. Kuwait’s break-even price is $33 a barrel.

Iran’s break-even point, however, is significantly higher. “Iran’s break-even price is $90 a barrel,” Khan said. “If prices dip below $90 a barrel, and we have seen it touch $89, then they would have to tighten their public expenditure policy, and probably cut subsidies, which would be an issue for the government there – the public would not be content,” he said.

Short and simple: if the price of oil drops below $90 per barrel, the Iranian regime is in fiscal trouble.

This week some November futures dropped to $83, the lowest in a year.

If Saudi Arabia, Iraq, Qatar, the UAE, and Kuwait feel threatened by Ahmadinejad it is in their existential interest to bring down the price of oil into the $60-80 dollar range. How? Also short and simple: increase production. These Arab oil producers are heavy investors in the U.S. economy. They are also suffering by the shocks hitting the U.S. markets, and they should be interested in restoring health to the economy.

OPEC, however, facing the downturn in western economies, is considering cutting oil production to keep the price high.

In today’s possible return of the Cold War, Iran, Russia and Venezuela are all interested in chipping away at the United States’ economic stability and have no interest in letting the price of oil drop below their “break-even” points. Just how far will these countries press on the oil supply pressure points to keep the price high?

Forty percent of the world’s petroleum travels through the 180 km-long Straits of Hormuz, effectively controlled by Iran. Every time Ahmadinejad or his commanders rattle their sabers or threaten to mine the straits, the price of oil rockets skyward. Bad news and even rumors make the price jump. A report this week – later proven false -- that a U.S. military aircraft heading to Afghanistan was forced to land in Iran after violating the country's airspace caused prices to jump above $93 a barrel.

Meanwhile, a pipeline through the UAE that would bypass the Straits of Hormuz won’t be ready for at least a year, and one wonders if it won’t be the target of terrorists to keep it from opening. A recent terrorist explosion in Turkey damaged the Baku-Tbilisi-Ceyhan (BTC) pipeline and shut it down for a month. During the Russian blitz of Georgia last month British Petroleum closed the BTC out of fear of serious damage.

Pipelines and shipping routes may emerge as the new targets for international terrorists. They are relatively easy targets, and the skittish oil markets will react in ways that further hurt Western economies. It comes down to the well-known question: Cui bono? Who gains?

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