Saturday, December 15, 2018

Saudi Arabia's Tilt to Russia





The Organization of the Petroleum Exporting Countries likes to look united.

That’s evident when OPEC leaders meet in Vienna at the end of each year to decide how much oil its members will aim to produce the next year. There is always a show of togetherness and the appearance of the quasi-cartel’s ability to move markets.

But the truth is, OPEC is in the midst of a major crisis made more evident by Qatar’s announcement that it would be leaving OPEC, partly to protest Saudi dominance over the group.
My research has taken me through the history of oil, particularly the relationship between oil revenues, economic development and the geopolitical balance of power in the 1960s and 1970s. I believe that rather than the arbiter of global energy, OPEC has often been held back by division, disagreement and divergent interests.

This weakness helps explain why OPEC has struggled to move markets in effective ways since the 2014 collapse of oil prices. The latest production cuts, which were bigger than expected but followed considerable acrimony, are further proof that OPEC’s disunity remains intact.

Early days: Divided and powerless

OPEC was formed from frustration. In the 1950s, the world was awash in oil as small nations in the Middle East and Latin America discovered enormous deposits.
To gain access to those deposits, the major oil companies, known as the “Seven Sisters,” signed concessionary agreements with local governments. This arrangement gave the companies control over the oil – they set production levels and prices – while governments simply collected a check.

In February 1959, amid an oil glut, the Seven Sisters decided that a price correction was necessary. Acting unilaterally, they cut the price of oil, from US$2.08 to $1.80 by August 1960.

That may sound odd today, but back then oil prices didn’t always follow market forces and were typically set by the companies.

The cuts meant a significant loss of revenue for the oil-producing states. In protest, the oil ministers of Iraq, Iran, Venezuela, Saudi Arabia and Kuwait met in Baghdad that September and formed OPEC to achieve a more equitable arrangement with the Seven Sisters. Algeria, Qatar, Indonesia and Libya joined later.

But the big oil exporters like Iran and Saudi Arabia could do little to coerce the companies. Oil was abundant, and the companies could successfully exclude any country from the market, as they did with Iran in 1951. OPEC did not possess enough market share or unity to pressure the companies into surrendering control over price.

A new balance of power

OPEC couldn’t agree on a consistent policy among its members. Saudi Arabia wanted to keep production levels low and prices consistent. Iran wanted prices pushed as high as possible in order to maximize revenue.

According to Ian Skeet, a scholar and an oil consultant, the shah of Iran sought a separate agreement that sabotaged an attempt to extract more favorable terms from the Seven Sisters in 1963.

During the 1960s, OPEC failed to form a united front.

Nevertheless, things were changing. Demand for oil shot up and U.S. production stagnated. The Seven Sisters’ power was undermined by international competitors drilling new fields in North Africa, where Libya’s Muammar Qaddafi threatened to shut off supply if he didn’t get higher prices.

Oil giants faced more pressure to deliver better terms to producing governments.
These conditions, while not the result of OPEC’s actions, gave it an opportunity to upset the balance of power.

Embargo, revolution and crisis

This shift accelerated in the 1970s as war broke out between Israel and its Arab neighbors in October 1973.

To punish the U.S. for supporting the Jewish state, Arab oil producers (not all OPEC members, as popularly believed) cut production and declared an embargo against the United States.

OPEC also demanded a higher oil price. After rejecting a small gesture from the Seven Sisters, OPEC announced it would double the price to $5 – then hiked it again to $11.65.

How did the balance of power seem to shift so suddenly? Among other reasons, oil companies could not agree among themselves on a new oil price and they were tempted by the big profits that would result. OPEC seized control of the market largely due to circumstances beyond its control.

Despite its victory, OPEC had come no closer to resolving its internal divisions. This became evident when the next energy crisis hit, in 1979, when Iran’s revolution broke out.
Global oil markets panicked. Iranian production fell. And other OPEC members sold their own oil at costly premiums, sending the price even higher.

Saudi Arabia tried to impose a quota system. Most members ignored their quotas or overproduced.

Meanwhile, oil-importing countries like the U.S. and the U.K. sought improve fuel efficiency and invested in domestic oil production in places like Alaska the North Sea. By 1985, OPEC’s share of the global market had fallen below 30 percent.

By 1986, Saudi Arabia had had enough. Without warning, its production shot up by more than 2 million barrels per day, flooding the market and pushing the average price down to $18 per barrel, about $39 today, according to oil company records.

This move indicated Saudi willingness to use its massive reserves to “correct” the market and push out high-cost producers, even at the cost of its OPEC allies.




Russia’s new role

As OPEC’s fortunes have oscillated with increasing volatility since the 1986 shock, cooperation has remained elusive.

In 2014, oil prices began to decline, due to increasing U.S. production. To squeeze out American drillers, Saudi Arabia pumped more oil, sending prices to historic inflation-adjusted lows in early 2016.

But the move backfired: U.S. producers held on, while OPEC members like Venezuela endured enormous economic pain.

To gain leverage, Saudi Arabia has partnered with Russia, a major oil exporter that doesn’t belong to OPEC, forming what some analysts have called OPEC+. The two countries now coordinate their production cuts to stabilize prices.

OPEC+ minus one

Not all OPEC members are happy about this arrangement, including Qatar, a small Persian Gulf state. It has been at odds with Saudi Arabia since 2017. In December 2018, Qatar announced it would be leaving OPEC to concentrate on liquefied natural gas exports.

Meanwhile, President Donald Trump was imploring OPEC to pump more oil rather than less of it, to keep gasoline prices low.

When OPEC+ met in Vienna it didn’t buckle. But the deal it reached followed considerable disagreement, which laid bare divisions within the group over how much oil output it should cut. In the end, Russia and Saudi Arabia agreed to do most of the cutting required to slash oil production by 1.2 million barrels per day. And Iran did not pledge any cuts at all.

The overall cut was bigger than expected. But Iran’s defiance, Qatar’s departure and the fight over cuts underscores what has been true from the very beginning: OPEC projects unity, but behind the scenes the group struggles with division, disunity and differing interests.

Portions of this article appeared in a related article first published on June 2, 2016.


Gregory Brew, Postdoctoral Fellow, Center for Presidential History, Southern Methodist University
This article is republished from The Conversation under a Creative Commons license. Read the original article.

Friday, November 16, 2018

Hiatus is over



As salamu alaikum. This blog is back after an unplanned hiatus. Kindly accept my apologies for the break.

We ask Allah for well-being, success, healing for our sick, knowledge for our ignorant, victory for our oppressed, and mercy for our deceased.

Allah is able to do all things.

Wa salam.

Saturday, October 6, 2018

World Political History: The Fall of the Berlin Wall


By Andrew Bonnell, Associate Professor of History, The University of Queensland (Source: The Conversation)

This article is part of our series of explainers on key moments in the past 100 years of world political history. In it, our authors examine how and why an event unfolded, its impact at the time, and its relevance to politics today.


Nearly 30 years ago, in the night of November 9-10, 1989, East German border police opened the gates at crossing points in the Berlin Wall, allowing masses of East Berliners to stream through them unhindered.
This started a night of unbridled celebrations as people crossed freely back and forth through the Cold War barrier, climbed on it, and even danced and partied on it.
The signal for the mass breach of the previously heavily guarded wall was a fumbled announcement in a press conference by the Socialist Unity Party (SED) Party chief of Berlin, Günter Schabowski.
His announcement that travel restrictions for East German citizens would be lifted led to the Wall’s transit points being mobbed by thousands of East Germans as they interpreted the announcement to mean immediate freedom of movement to the West.

What happened?

The opening of the Berlin Wall triggered a series of events that led to an unexpectedly rapid unification of the Federal Republic of Germany (FRG or West Germany) and the German Democratic Republic (GDR, or East Germany) on October 3, 1990.
But to really understand this moment, we need to look at when and why the Berlin Wall was erected in the first place. Following Germany’s defeat in the second world war, the country was split between the victors – the Western Allies’ occupation zones became the Federal Republic in 1949, while the Soviet zone was reconstituted as the German Democratic Republic shortly thereafter.
Germany’s capital, Berlin, was also split down the middle. The wall was erected by the East German leadership in August 1961 to stop the flow of citizens from East to West, completing a sealed border that elsewhere ran along the frontier between the two German states.
The Wall’s opening was the product of two processes that had gathered momentum throughout the second half of 1989: the peaceful demonstrations and protest marches of a number of newly constituted East German civil rights organisations, and the growing number of East German citizens leaving from the GDR’s side doors.
The latter mostly happened through Hungary, which opened its border with Austria in May. Large numbers of East Germans on holidays in Hungary took advantage of the opportunity to migrate to West Germany. By November 1989, the trickle of East Germans leaving had become a flood, with thousands a day going to the West by the week the wall was opened.
Furthermore, the East German SED leadership had been increasingly on the back foot since peaceful demonstrations started, following manipulated local government elections in May 1989.
By the start of October, there were regular Monday night protest marches through Leipzig and other East German cities. Initially, there were fears that the SED leadership might suppress these protests with violence.
The Tiananmen Square protests and subsequent mass killings in Beijing in June 1989 were fresh in the minds of many. But after a large-scale Monday night demonstration in Leipzig was allowed to proceed without armed opposition from the police and security services on October 9, the opposition gained courage and momentum.
A few days before the opening of the Wall, an estimated half a million protesters gathered in East Berlin’s Alexanderplatz, calling for democratic reform of East Germany.
There was, of course, a wider context for these events. By 1989, the General Secretary of the Communist Party of the Soviet Union, Mikhail Gorbachev, had become convinced of the need to carry out economic reform measures in the Soviet Union. He considered disarmament and a winding down of Cold War confrontation in Europe as necessary preconditions for such reforms.
Unlike previous Soviet leaders, Gorbachev signalled a tolerant attitude to reforms in the member states of the Warsaw Pact, including relaxation of censorship and central control of economic matters.
Indeed, Gorbachev even began to encourage the replacement of older generation communist hardliners with younger reformist leaders. When Gorbachev visited East Berlinfor the official 40th anniversary celebrations of the founding of the GDR on October 7, 1989, he was rapturously welcomed by young demonstrators. They saw his visit as promising reforms that had hitherto been resisted by the ageing SED leadership under Erich Honecker.
On October 18, Honecker was obliged to step down in favour of his younger protégé Egon Krenz. However, in the following weeks, despite the almost inadvertent opening of the Berlin Wall, Krenz failed to keep up with escalating popular pressure for change.

The impact of the fall of the Berlin Wall

The new openness to reform in what was still known as the “Soviet bloc” had already seen contested elections in Poland in May 1989, and political and economic reforms in Hungary. These were catalysts for the changes in East Germany (especially events like Hungary’s opening of its western border).
In the weeks after the opening of the Berlin Wall, there was a peaceful transition to democratic government in Czechoslovakia, and less peaceful changes of régime in Romania and Bulgaria, as it became clear the Soviet Union was no longer prepared to support hard line Communist governments in Eastern Europe.

Contemporary relevance

The lasting consequences of the fall of the Berlin Wall were momentous.
Despite the presence of hundreds of thousands of Soviet army troops in the former Cold War front line state of East Germany, Gorbachev agreed in negotiations with the United States President George H. W. Bush and West German Chancellor Helmut Kohl to permit a swift unification of the two German states. This occurred almost entirely on West German terms.
The speedy collapse of the East German economy in mid-1990 left East German leaders, now democratically elected, with little leverage. Once the West German currency, the Deutsche Mark, was introduced into the East in a currency union in July 1990, East German firms, already exposed by the disintegration of the Soviet bloc, were drastically unequipped to compete.
For two centuries, modern European history had largely revolved around the “German Question”: what external borders would a German state have, and what political order would prevail in this pivotal Central European state? The peaceful and democratic unification of 1990 seemed to provide a definitive answer.
Providing real unity between West and East Germans required massive financial transfers from West to East. The transformation of the Eastern states in practise caused significant economic and social dislocation. As East Germans made enormous adjustments in their lives, their Western cousins were also paying slightly higher taxes to cover the costs of unification.
More globally, the fall of the Berlin Wall marked the symbolic end of the Cold War. Berlin had long been a cockpit of Cold War confrontation – now it was the victors’ trophy. One US policy analyst prematurely proclaimed the “end of history”, in so far as history was a clash between major political orders, and Western democracy and capitalism had won.
But since 1989, many disappointments have followed the initial euphoria. The “peace dividend” hoped for by millions, and Gorbachev’s sunny but characteristically vague formula of peaceful coexistence in a “common European home”, have not eventuated. Instead, a triumphant NATO has pitched its tents inside the borders of the old USSR, and a surly and resentful Russia has responded with brinkmanship and confrontation.
Following the end of the Cold War, neoconservative US administrations sought to put their stamp on the world, and the “blowback” has resulted in chaos in much of the Middle East and think tank predictions of a “clash between civilizations”.
The Conversation Economically, turbocharged neoliberal capitalism has come under question, especially following the 2008 global financial crisis. But, what is significant to note is that since the collapse of state socialism, symbolised by the fall of the Wall, the contours of an alternative social order have become almost impossible to discern.

Tuesday, September 25, 2018

Environmentalism, Class, and Science


By Alice Bell (Source: Mosaic)

The 1970s was a key period in modern environmentalism. Concerns over air and water pollution grew, new social movements developed, processes to build international agreements were forged, and something called climate change started to be talked about more and more.

Central to this new environmentalism were questions surrounding the uses and abuses of science – the core issues for the scientist-activists of the British Society for Social Responsibility in Science (BSSRS). BSSRS shared a building with the first offices of Friends of the Earth. And yet, on the whole, BSSRS chose to avoid green issues. “We missed the big one, we missed the environment,” Jonathan Rosenhead, a former BSSRS activist, told a 2014 symposium at the University of Cambridge.

“This caring about the planet seemed like a bit of a diversion,” he explained. “Maybe that’s just my view. I know I had… a slightly dismissive attitude towards people doing stuff about pretty green fields, and we were trying to save the workers.”

BSSRS didn’t miss the topic entirely. In 1969 they published a special environmental edition of their newsletter, looking forward to 1970 as European Conservation Year and, further ahead, UN talks in 1972. It featured some of the first graphics published by BSSRS, including an image of a test-tube pouring oil over the Earth as another globe was engulfed in smoke from a factory. A Steven Rose article on how the military were polluting the environment was illustrated with a picture of the Earth in a gas mask. Elsewhere in the issue, Robert Smith referred to the risk of CO2 emissions from fossil fuel use causing polar ice melt, and calls for international agreements.

This being the case, why the distance from the environmentalists?

Today the problem of science and the green movement is often framed as if the latter is deficient in knowledge of the former. But for BSSRS, the point of contention was class, not scientific knowledge: specifically, the ‘establishment’ mindset that they thought the greens still held.

In 1972, the Ecologist magazine published a ‘Blueprint for Survival’, boasting the signatures of 36 leading scientists. But to the BSSRS activists, that was part of the problem. BSSRS liked people to listen to science, they were just less sure that the scientific establishment were the best advocates for it.

BSSRS activist Hugh Saddler responded to the Ecologist, lambasting the green movement’s tendency to mimic or play up to those in power rather than fight them. “There is a distinct feeling throughout that change is to be accomplished by direct from above – a sort of dictatorship of the ecologically-enlightened,” he concluded.

The green movement wasn’t, Saddler argued, necessarily dominated by right-wing ideology, nor was the environmental crisis something dreamed up by ruling classes to keep us under control. But, he worried, much of the green activism was politically naive, putting its faith in existing elites. He called for BSSRS to engage more with environmental groups and teach them more about politics.

For a short time, BSSRS did employ a member of staff to research pollution. Jonathan tells me how that came about, and the story speaks volumes about the class politics of science and environmentalism at the time.

Back in the early 1970s, he met a wealthy sponsor: David Hart, the Eton-educated son of a merchant banker. In the 1980s, Hart went on to achieve notoriety as a ‘Downing Street Irregular’ with the ear of Margaret Thatcher. Active against the miners, he famously organised anti-strike activities from a luxury suite at Claridge’s hotel in London, travelling to the East Midlands in a chauffeur-driven Mercedes. The Socialist Worker headed his obituary “the scum’s scum”. But back in the 1970s, BSSRS made him an unlikely – and unknowing – supporter of the workers’ struggle via a shared interest in pollution.

Back in the 1970s Hart was concerned about the frog population on his estate. Via Cambridge connections, Jonathan and his family were invited down for a visit. A trip from London involving a Rolls-Royce, a private plane and a butler-driven Range Rover followed. “As soon as we got there he changed into knee-length boots, went out with a shotgun, and started killing things,” Jonathan recalls. They played chess and discussed the problems of industrial pollution. By the end of the weekend, Hart had agreed to fund a BSSRS researcher.

This post went to Charlie Clutterbuck, and out of that grew BSSRS’s work on health and safety at work. The centre of this was very much the health and rights of workers, not frogs.

As Jonathan puts it, “We stole his money. And made it into something different.” Charlie similarly beams with mischief remembering this. “We were absolutely clear on pollution, the working class got the worst and the rich didn't,” says Charlie. “And they got the least resources. And the ruling [class] got the least pollution and the most resources.”

But, Charlie says, as far as the environmental movement at large saw it, “We were always seen as the lefties.”

 This article first appeared on Mosaic and is republished here under a Creative Commons licence. 

Sunday, September 23, 2018

Reflections: Alcohol, Health, and Morality


"They will question thee concerning wine, and arrow-shuffling (gambling). Say: 'In both is heinous sin; and uses for men, but the sin in them is more heinous than the usefulness.' They will question thee concerning what they should expend. Say: 'The abundance.' So God makes clear His signs to you; haply you will reflect;" Quran 2:219 (Arberry)

This week seemed filled with such clear signs concerning the wisdom of the prohibition of alcohol consumption.

It was widely reported that the World Health Organization (WHO) published a study declaring that alcohol accounts for one in twenty deaths worldwide. That latest study only confirmed another from last month which found that "there's no amount of alcohol consumption that’s safe for overall health" and that "some modest cardiovascular benefits associated with moderate drinking" are "overshadowed by the numerous ways alcohol can threaten health".

Less widely reported was this observation by Vladimir Poznyak, the Coordinator of Management of Substance Abuse Unit at the WHO:
It's definitely a global problem and only in countries with higher proportion of a Muslim population the levels of alcohol consumption are relatively low. But at the same time in all parts of the world, alcohol consumption now is widespread and is a source of significant burden to population health.
So the less the Guidance is followed the greater the health burden.

Yet we see another type of burden associated with alcohol, a moral one, evident in the spectacle of Brett Kavanaugh's supreme court confirmation hearings in the US.

How odd it is that people should regard fornication and alcohol consumption as perfectly acceptable, even among teenagers, yet recoil in supposed shock and disbelief at sexual assault (i.e. zina in the west) perpetrated by a "stumbling drunk" male on an accessible, inebriated female.

Allah says:

"Satan only desires to precipitate enmity and hatred between you in regard to wine and arrow-shuffling, and to bar you from the remembrance of God, and from prayer. Will you then desist?" Quran 5:91(Arberry)

And that is the question:

Will you then desist?

Indeed the mindless, politically expedient yet morally confused outrage of a society of drunken fornicators who will not desist is a tragic thing to behold.

May Allah save our bodies, intellects, and societies from the destruction that disobedience inevitably brings.

Wednesday, September 19, 2018

Changes at QaysArthur.net



Alhamdulillah. QaysArthur.net has had an overhaul for the new year. All essential information related to classes is now on the main page, the blog has been redone, and the previous student area learning management system (LMS) has been upgraded with a better one (in my view).

Student accounts have been migrated but students logging into the new system for the first time will be required reset their passwords (using one's existing user name and email address).

Additionally live sessions are now conducted using Zoom.

The migration process is slow due to other commitments and still in progress so if any issues are encountered please let me know.

We ask Allah for acceptance.

Tuesday, September 18, 2018

Ashura and the family



By Mufti Muhammad ibn Adam (SourceDarul Iftaa)
Many ‘Ulama encourage the giving of gifts, charity, and spending on one’s family on the day of Ashura. That is as a purely optional virtue in addition to prescribed fasting. What follows is a brief look at some of the narrations upon which those recommendations are based.
There are two types of narrations related regarding these matters. The first concerning the virtue of giving general charity on the 10th of Muharram (Ashura), and the second concerning the virtue of spending specifically on one’s family on this day.
As far as general charity is concerned, it has been reported from the Companion Sayyiduna Abdullah ibn Amr ibn al-As (may Allah be pleased with him) that he said, “Whoever fasts on the 10th of Muharram (Ashura), it is as though he has fasted the entire year. And whoever gives charity on this day, it is like the charity of an entire year.” (Recorded by Imam Ibn Rajab al-Hanbali in his Lata’if al-Ma’arif from Abu Musa al-Madini)
As for spending and being generous on one’s family, the Messenger of Allah (Allah bless him & give him peace) is reported to have said, “One who generously spends on his family on the 10th of Muharram (Ashura), Allah will be generous on him for the entire year.”(Recorded by Imam Ibn Rajab al-Hanbali in his Lata’if al-Ma’arif from Tabarani in his al-Awsat and Al-Bayhaqi in his Shu’ab al-Iman)
These and other narrations indicate that one should be generous on one’s family and dependants and spend more on them by providing more food and other items on this day as compared to other days. One may give cash, food and drink, or any other item of gift.
Although some scholars consider these narrations to be weak (dha’if), others like Imam Bayhaqi and Ibn Hibban have accepted them as reliable. Imam Ibn Rajab al-Hanbali relates from Imam Ahmad ibn Hanbal (Allah have mercy on him) that he did consider some basis for them. He also quotes Sufyan ibn Uyayna (Allah have mercy on him) as saying, “I have practiced this [spending on the family] for fifty or sixty years, and have found nothing but good in it.” (Lata’if al-Ma’arif P 64)
Moreover, scholars have generally agreed on the permissibility of acting upon weak narrations for virtuous actions, as long as they are not fabricated (mawdu’).
As such, in conclusion, it would be virtuous and rewarding to spend more on one’s family on the 10th of Muharram. One may provide more food and drink or any other item. However, this practice should not be considered as firmly established from the Sunna, and thus, one should avoid attaching extra significance to it.
And Allah knows best.