Energy: The indispensable country

The US shale revolution has averted the threat of a global oil crisis caused by growing levels of conflict and instability
By Ed Crooks and Anjli Raval (The Financial Times)
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In the sleepy farmland of south Texas, near the ghost town of Helena, the 18 gleaming towers of ConocoPhillips’ oil stabilisation plant are an incongruous sight.

Three years ago, there were only fields here but facilities have sprung up to handle the flood of oil pouring out of the Eagle Ford shale region south and east of San Antonio. These are exciting times in the US oil industry; the new plants are proof of that.

Prospects are bright here and in a few other countries including Canada. As the gush of crude from North America strengthened, analysts predicted it would send prices tumbling and open a new era of cheap fuel. It has not happened.

That is because the great advances in US shale have coincided with political upheaval in big oil-producing countries. Political instability in Libya, Iraq and Venezuela has stoked concerns about disruption and threats to future supplies. International sanctions on Iran have also reduced the global supply of oil, and Nigeria’s industry is plagued by theft.

Were it not for the new production in the US, which has cut the country’s imports sharply, there would probably be talk of another world oil crisis. As a global energy supplier, it is, in the words of Madeleine Albright, the former secretary of state, the “indispensable nation”.

The rise of Eagle Ford has been spectacular. The advances in horizontal drilling and hydraulic fracturing, or “fracking”, which were first used to extract natural gas from shale, have in the past four years been applied here to produce oil, with remarkable results. Eagle Ford produced just 15,000 barrels of crude oil per day in 2010, but 838,000 b/d in the first four months of this year, according to the Railroad Commission of Texas, the state regulator.

Along with the Bakken formation of North Dakota, Eagle Ford is one of the heartlands of the US oil revival that has been responsible for a rise of more than 60 per cent in the country’s crude production since 2008.

“In the 1970s, the US reached what’s been called Peak Oil. But that peak was only for conventional oil,” says Greg Leveille, Conoco’s technical manager for so-called unconventional resources, which include shale. “If you look at the decline that we saw then, it was precipitous. And everybody expected it to continue. But now we have changed the trajectory of oil production in the US.”

Despite the boom in oil production here, Texans are not seeing much of a decline in fuel costs. The average price of petrol in Texas was $3.56 per US gallon last week, according to the US Energy Information Administration, as high as it was in the summer of 2011. Only in 2008, when US crude reached its record high of $147 a barrel, was fuel more expensive.

Every time they fill their tanks, Americans are reminded that oil is a global, not local, market.

Exports of crude from the US are tightly restricted under laws dating back to the energy crisis of the 1970s, when a ban was imposed to support price regulations. Exports of oil products such as petrol and diesel face no such restrictions, however, meaning that refiners can sell them at world prices. Brent, the global oil price benchmark, determines what US consumers pay, and over the past month it has had a turbulent time.

In June, Brent soared above $115 a barrel as militants from the Islamic State of Iraq and the Levant, known as Isis, seized control of much of Iraq and appeared to be on the verge of taking Baghdad, the capital. Iraq is the second-largest producer in Opec, the oil cartel, with output of about 3.3m b/d. The loss of Iraqi exports from world markets would send prices soaring.

Since then, the advance of Isis has appeared to stall and Iraq’s oil production has continued largely as before. The Kurdistan Regional Government, which is keen to export more crude, seized two oilfields near the northern city of Kirkuk and said it planned to protect the infrastructure there. As a result, market alarm over potential disruption to supplies from Iraq has eased. Brent dropped to just over $104 a barrel – a three month low – on Tuesday, giving back all of the gains it put on while Isis was sweeping through northern Iraq.

The notion that consumers can now relax about Iraq is dangerously complacent, however. Conditions remain volatile and the weakness of the country’s military forces suggests that the security of its oil exports is far from guaranteed.

Even if there is no immediate disruption, the latest bout of instability poses a long-term threat to Iraq’s production. The International Energy Agency, the watchdog, predicts that Iraq will be one of the largest contributors of increased oil supply over the next five years. It is expected to provide about 60 per cent of Opec’s capacity growth between now and 2019. To play that role, though, it needs sustained foreign investment to help develop its fields.

Ed Morse, global head of commodities research at Citi, argues that even though many foreign companies are now working in Iraq, the recent violence will make it more difficult to attract additional capital. This is despite the fact that the country’s reserves are large and increasing production is technically straightforward. “When Colombia became more secure, companies piled back in and production doubled. So [security] is impactful. It is a real deterrent,” he says.

The turmoil in Iraq would be less worrying if other countries were capable of increasing supply to fill any gaps. But global oil markets are already tight.

In Libya production has slumped and is only now beginning to pick back up after exports dropped by almost 90 per cent when rebels blockaded ports a year ago. The sanctions against Iran over its nuclear programme have cut its exports, and the crime afflicting Nigerian production shows little sign of abating.

Poppy Allonby, co-head of energy at BlackRock, the fund manager, says unplanned oil production outages have increased significantly in the past three years. “In the first five months of 2014, 3.8m b/d has been offline compared to an annual average of 850,000 b/d between 2008 and 2010,” she says. “Eighty per cent of the outages so far this year have come from Libya, Iran, Syria, Iraq and Nigeria, and as such are linked to regional instability and security.”

In the past 15 years, security has become an increasingly serious problem for oil companies around the world, according to Andrew Gould, former chief executive of Schlumberger, the oil services company, and now chairman of BG Group.

Before 2001, Schlumberger undertook security measures in only two countries, Colombia and Nigeria, he told a Financial Times conference in May. Today, the company has to conduct security operations in at least 20 countries.

“I personally feel that at the moment the forecasting agencies and the analysts are seriously underestimating the potential for disruption, even within Opec, over the next year or so,” he says.

In its most recent oil market report this month, the IEA made a similar point, warning that “Opec supply risk remains high”.

Those fears were underlined in the case of Libya by the US state department, which issued a statement at the weekend saying that Washington was “deeply concerned by the ongoing violence in Libya and dangerous posturing that could lead to widespread conflict there”. Although Libya’s oil production has been coming back on stream and exports are expected to resume, the risk of further disruption remains high.

Many countries in the Middle East and Africa that have more favourable geology than the US, meaning that their oil is physically more accessible, says Amrita Sen of Energy Aspects, a consultancy in London, but security has been their Achilles heel.

“You’ve seen a whole bunch of these countries, such as Iraq, that have opened up in recent years as they needed the oil revenues. But these countries have not been able to guarantee safety,” she says.

Oil production in some mature areas, such as the North Sea off the British coast is in steep decline. Worldwide, many oil companies are suffering from diminishing returns on their capital as soaring costs have squeezed profitability.

A study by analysts at Barclays last month found that spending by oil companies worldwide on exploration was set to rise about 6 per cent this year to $712bn. However, the big international oil groups from the US and Europe, including ExxonMobil, Royal Dutch Shell and
Total, have been reporting falling rates of return on their investments. In response to pressure from their shareholders, the groups are cutting back slightly this year. The Barclays analysts argue that this “period of under-investment…will lead to a period of underproduction and could drive a structural leg-up in international oil prices”.

Shale production in the US is a relatively high-cost resource because of the effort needed to get the oil out of the ground. But companies have been managing to bring those costs down and investment is still rising.

Mr Gould argues that although shale resources are “somewhat poor and uncertain”, investing in the US still “looks highly attractive”.

Ms Allonby says that even though the increase in US production has been the result of private companies’ attempts to maximise profits rather than a strategic decision by the government, as it would be for, say, Saudi Arabia, it has had a similar effect in balancing out losses to production in other countries and stabilising prices.

“Given the amount of oil offline, the oil price would likely be a lot higher were it not for the US,” she says.

From 2005 to 2013, all of the net increase in world crude production was provided by the US.

The outlook for oil prices is always unpredictable, and an event such as a sharp economic slowdown in China could send them lower for a while. In the long term, though, demand for oil in emerging economies is only going to grow, putting pressure on supplies and forcing prices higher.

Without increasing US output, the strain would be immense. The shale revolution has had a dramatic impact already. Oil consumers everywhere will hope that it can continue.

Policy liberalisation: The struggle to export American resources:

Although US law allows minimal exports of unrefined crude oil, much of the country’s additional output is being shipped in the form of refined products such as diesel and heavy fuel oil, writes Ed Crooks. The great uncertainty facing the US industry is what will happen if crude production keeps rising to the point that its refining capacity – in particular, capacity for processing the light and sweet oil that comes from shale – is reached.

Oil producers are worried about the threat of a glut of crude onshore in the US, which would drive down domestic oil prices relative to internationally traded Brent.

One response has been for US refiners to invest in increased capacity to handle the extra oil, including specialised facilities known as splitters that process it just enough to meet the regulator’s definitions of products that are eligible for export.

Last month, two companies revealed they had been testing the boundaries of those definitions.

Pioneer Natural Resources and Enterprise Products Partners said they had been given permission by the US commerce department to export condensate, an ultralight form of oil, which had received only minimal processing, passing through a stabiliser tower to remove the most volatile components.

Politically, crude oil exports are a tough sell for any administration. Edward Markey, a Democratic senator from Massachusetts who has been arguing against liberalisation, puts the case in clear, populist terms. “We should keep our resources here at home for American families and businesses,” he says, “not send this oil abroad even as we import oil from dangerous regions of the world.”

Even so, there is growing pressure from oil producers for further relaxation of the rules and many analysts now expect the administration to ease the restrictions gradually.

Paul Sankey from Wolfe Research expects incremental moves towards full liberalisation of crude exports, “either explicit or de facto”, by 2017.

Lifting the ban would have more of an effect on the differentials between types of crude than for prices overall. The shale boom in the US has already had a big impact on world markets because of the increase in product exports and the reduction in crude imports.

The most significant impact of liberalisation is likely to be on North American oil producers, which will receive higher prices for their output, helping them invest more and keeping the boom going.

Allowing unrestricted crude exports could add about 1.2m barrels per day to US production over 2016-30, an increase of about 14 per cent from today’s levels, according to IHS, a research group.

Obama’s wars on Israel

Op-ed: Ban on flights to Israel was just another attempt by US administration to force Israel to accept difficult conditions in Gaza. By Dr. Guy Bechor

President Barack Obama

President Barack Obama

Artificial sweet talk in public and stabs in the back behind the scenes – that’s how we should describe the attitude of US President Barack Obama’s administration towards us. From now on we can also call it “Obama’s wars on Israel.”

The first war was in the 2011 Arab Spring, when this American regime tried to portray the events as a sort of marvelous democratic uprising, compared to the obsolete Israeli democracy which is lagging behind. This is the way the Arab uprising was explicitly described by some members of Obama’s staff, all Jews of course.

Then came reality and hit Obama in the face, as the Arabs – all of them – collapsed: Syria died, Iraq died, Libya died, and an Arab democracy remained solely in the American hallucinations.

The second war was Secretary of State John Kerry’s desperate attempt in 2013 to reduce Israel’s size to the point of putting it in existential danger. He forced Israel and Mahmoud Abbas into futile but dangerous negotiations, which evoked destructive Islamic urges and deteriorated the security situation both in the Palestinian Authority and in Israel.

Encouraged by Kerry, the Palestinians’ imagination began going wild: They would receive Jerusalem, the return of the refugees, the Jordan Valley, lands, prisoners – and the result was arrogance, and therefore violence, defiance and self-destruction.

Of course those American diplomats rushed to blame Israel for all the world’s troubles, at their master’s order, but that war failed too. Israel insisted on its right to exist, and not to turn Judea and Samaria into Gaza.

Where is that Kerry today, the man wanted to hand Judea Samaria over to Arab sovereignty? Why everything that is happening in Gaza would have happened here, and that would have been the end of Israel. Fortunately, the Gaza war broke out now, because it illustrates what would have happened if, God forbid, we would have transferred more lands to the Arab terror.

The third war is taking place now, and we must admit that the Obama regime is not giving up: An attempt to force Israel to accept difficult conditions in the Gaza Strip, including through the outrageous ban on flights to Israel. The ban was issued by the American FAA, a federal administration subject to the US secretary of transportation. As opposed to previous wars, in which the administration warned against an intifada or European boycott – it is now attacking Israel directly and openly, and trying to suffocate it.

This administration is closer today to Qatar and the Muslim Brotherhood or to Iran, which encourage terror, than to Israel. This is an astonishing blindness, an abandonment of the West’s leadership and a cultural decline at an inconceivable magnitude.

This isn’t the first time Kerry is caught smiling at Israel while inciting against it behind the scenes. But not just towards Israel. This is also a betrayal of the moderate axis of the Middle East – Egypt, Jordan and Saudi Arabia – as well as encouraging and rewarding jihadist terror, and a betrayal of all the real American values.

Israel will manage to free itself of this attack too, and the American curse will turn into a blessing also here – because the Palestinian sides are collapsing as it is, and going back to being portrayed as terrorists in the world.

But before the upcoming Congress elections, every American citizen should know how this American administration treats its only ally in the Middle East – and vote accordingly.

Hamas’s (and Iran’s) fail-safe strategy

Peace can only come to Israel and its neighbors when the Muslim world liberates itself from its hatred of Jews.

Article by Caroline B. Glick

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Peace can only come to Israel and its neighbours when the Muslim world liberates itself from its hatred of Jews

It isn’t going to gain any territory. Israel isn’t going to withdraw from Ashkelon or Sderot under a hail of rockets.

So if Hamas can’t win, why is it fighting? Why rain down destruction and misery on millions of Israelis with your Iranian missiles and your Syrian rockets and invite a counter-assault on your headquarters and weapons warehouses, which you have conveniently placed in the middle of the Palestinian people on whose behalf you are allegedly fighting? Hamas is in a precarious position. When the terror group took over Gaza seven years ago, things were different.

It had a relatively friendly regime in Cairo that was willing to turn a blind eye to all the missiles Iran, Syria and Hezbollah were sending over to Gaza through Sinai.

Hamas’s leaders were comfortably ensconced in Damascus and enjoyed warm relations with Saudi Arabia and Iran.

International funds flowed freely into Hamas bank accounts from Fatah’s donor-financed Palestinian Authority budget, through the Arab Bank, headquartered in Jordan, through the UN, and when necessary through suitcases of cash transferred to Gaza by couriers from Egypt.

Hamas used these conditions to build up the arsenal of a terror state, and to keep the trains running on time. Schools were open. Government employees were paid. Israel was bombed. All was good.

Today, Hamas, the Palestinian branch of the Muslim Brotherhood, faces an Egyptian regime that is locked in a life-and-death struggle with the Brotherhood. To harm Hamas, for the past year the Egyptians have been blocking Hamas’s land-based weapons shipments and destroying its smuggling-dependent economy by sealing off the cross-border tunnels.

Syria and Hamas parted ways at the outset of the Syrian civil war when Hamas, a Sunni jihadist group, was unable to openly support Bashar Assad’s massacre of Sunnis.

Fatah has lately been refusing to transfer payments to Hamas due to congressional pressure to cut off the now-illegal flow of aid to the joint Fatah-Hamas unity government.

As for Hamas’s banker, stung by terror victim lawsuits, the Arab Bank now refuses to transfer monies to Hamas from third parties. The UN is also hard-pressed to finance the terror group’s bureaucracy.

In Gaza itself, al-Qaida affiliates including ISIS (now renamed the Islamic State) have seeded themselves along with the Iranian proxy Islamic Jihad. These groups challenge Hamas’s claim to power. Lacking the ability to pay government employee salaries, Hamas is hard-pressed to keep its rivals down.

Given these circumstances, it was just a matter of time before Hamas opened a full-on assault against Israel.

Jew-hatred is endemic in the Muslim world. Going to war against Israel is a tried and true method of garnering sympathy and support from the Muslim world. At a minimum it earns you the forbearance, if not the support of the US and Europe. And you get all of these things whether you win or lose.

When Saddam Hussein shot 39 Scud missiles at Israel during the 1991 Gulf War, he didn’t attack because he thought doing so would destroy Israel. He attacked Israel because he was trying to convince the Arab members of the US-led international coalition to abandon the war against him.

Moreover, when Saddam launched the Scuds against Israel, he knew that Israel wouldn’t be able to retaliate. He knew that the US would force Israel to stand down in order to maintain the support of his Jew-hating fellow Arabs in its coalition.

So attacking Israel was a freebie that he only stood to gain from.

In 200 when Hezbollah initiated the Second Lebanon War, its leaders also didn’t think for a second that their group would conquer Israel. But by attacking the hated Jews, they were able to present themselves and their Iranian bosses as the guardians of the Muslims worldwide.

Then there was the US’s response.

As it protected Saddam from Israel in 1991, so in 2006, the US gave Hezbollah the upper hand in the war. Then-secretary of state Condoleezza Rice forced Israel to accept a cease-fire with Hezbollah that placed the illegal terror group on equal legal and moral footing with Israel.

This US legitimization of Hezbollah enabled the Iranian proxy to intimidate its Sunni and Christian compatriots in Lebanon and coerce them into accepting effective Hezbollah control over the entire state.

As for Hamas, from the outset of Hamas’s previous missile campaigns in 2009 and 2012, the Obama administration made it clear to Israel that it would not tolerate Israeli strikes that were sufficiently comprehensive to wipe out Hamas’s capacity to continue attacking Israel. In other words, President Barack Obama chose to protect Hamas – an illegal terrorist organization, waging a war of indiscriminate, criminal missile strikes against Israeli civilians – from Israel.

Today, Hamas has every reason to take heart from the responses it has received from its current offensive.

In the internal Palestinian arena, Fatah, Hamas’s partner in the Palestinian Authority unity government, is standing shoulder to shoulder with Hamas.

As The Jerusalem Post’s Khaled Abu Toameh reported, Fatah militias in Gaza are actively participating in the Hamas-led missile campaign against Israel. Fatah terrorists have boasted shooting dozens of rockets and mortar shells at Ashkelon and Sderot.

On Wednesday, Palestinian Media Watch reported that Fatah posted a placard proclaiming that the military wings of Fatah, Hamas and Islamic Jihad are “brothers in arms” united by “one God, one homeland, one enemy and one goal.”

Fatah chief Mahmoud Abbas is Hamas’s diplomatic champion. Indeed, his wild accusations against Israel have moved from the realm of exaggeration to rank incitement that raises concern he is planning to open a second front against Israel from Judea and Samaria.

Although Egypt has still not indicated any willingness to support Hamas, the longer Hamas continues attacking Israel, the more difficult it will become for Egypt to seal off the border between Gaza and Sinai. Hamas’s war strengthens the Muslim Brotherhood in Egypt.

Then there is the Obama administration.

Obama administration spokesmen have been issuing prepared statements blaming the hostilities on Hamas and mouthing support for Israel while praising its restraint. But at the same time, they have been transmitting messages which indicate that Obama is more intent than ever to give Hamas a victory even as it continues to rain down terror on Israel.

As Tel Aviv, Hadera and Jerusalem absorbed their first missile salvos from Gaza on Tuesday, Obama’s Middle East envoy Philip Gordon spoke at Haaretz’s “peace” conference.

It was a jaw dropping performance.

Gordon blamed Israel for the failure for the administration’s efforts to broker a peace deal between Israel and the PLO while effusively praising Fatah leader and Hamas partner Abbas.

And it only went down from there.

After insisting Israel is inadequately committed to peace, Gordon threatened to withdraw US support for Israel at the UN and open the door to the criminalization of Israel by the corrupt international body.

“How will we prevent other states from supporting Palestinian efforts in international bodies, if Israel is not seen as committed to peace?” he asked rhetorically.

Gordon’s remarks were not disputed by the State Department.

And State Department spokespersons themselves have continued to insist – absurdly – that Hamas is not a member of the Fatah-Hamas unity government.

From Hamas’s perspective, the Obama administration’s response to its aggression is an invitation to keep going. Gordon’s speech allayed any concerns they may have had regarding how the US would respond.

Hamas now knows that the US will coerce Israel into standing down while Hamas is still standing, and so enable the jihadists to claim victory and place Egypt in a bind.

And as with Hamas, so with Hamas’s Iranian sponsors.

On July 20, the US and its partners are supposed to conclude a nuclear deal with Iran.

Many Western experts and even some Israeli ones insist that Iran’s nuclear weapon program is not a serious threat to Israel because Iran’s primary aspirations have little to do with Israel. Iran, they say, wants nuclear weapons in order to dominate the Persian Gulf, and through it, the Muslim world as a whole. Iran’s targets, it is argued, are Mecca and Medina, not Jerusalem and Tel Aviv.

While this is probably true, it is certainly irrelevant for Israel’s strategic assessment.

The same dynamics that inform Hamas’s decision to launch its offensives against Israel inform Iran’s thinking about how it will use a nuclear arsenal. Iran would not attack Israel with nuclear weapons because it wishes to conquer Israel per se. Iran would attack Israel with nuclear weapons because doing so would give it a massive public relations boost in its campaign to dominate the Persian Gulf generally, and Saudi Arabia in particular.

In other words, far from being a hindrance to accomplishing its central goal, Iran views attacking Israel as a means of advancing it.

Unfortunately for Israel, just as the US has made clear that it opposes Israel taking any offensive steps to destroy Hamas’s capacity to rain terror on its citizens, so the Obama administration, through word and deed, has made clear that it will defend Iran and Iran’s nuclear weapons program from Israel.

The talks that are set to conclude next week can only bring about bad or worse results for Israel. In recent days and weeks, Iranian leaders have said that the only deal they will sign is one that will facilitate their nuclear weapons program by giving international license to their massive uranium enrichment activities. So if a deal is concluded, it will give the imprimatur of the US, the UN and the EU to a nuclear-armed Iran.

If no deal is concluded, the Obama administration will undoubtedly continue to protect Iran’s nuclear installations from Israel in the hopes of concluding an agreement with Iran at a later date, perhaps after the congressional elections in November.

In an op-ed in Haaretz published this week, Obama wrote, “While walls and missile defense systems can help protect against some threats, true safety will only come with a comprehensive negotiated settlement. Reaching a peace agreement with the Palestinians would also help turn the tide of international sentiment and sideline violent extremists, further bolstering Israel’s security.”

Unfortunately, Obama misses the point completely. As the dozen agreements Israel already signed with the Palestinians show, pieces of paper are meaningless if they don’t reflect the underlying sentiments of the populations concerned.

Peace can only come to Israel and its neighbors when the Muslim world liberates itself from its hatred of Jews. Until that happens, everyone from Hamas to Hezbollah to Fatah to al-Qaida to Iran and beyond will continue to view attacking Israel as the best way to make a name for themselves in the world, and the best way to get the attention – and support – of the West.

By CAROLINE B. GLICK

10/07/2014

 

 

The Fall of Iraq, the rise of the Kurds and the coming attack from Russia, Turkey and Iran

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The Islamic State of Iraq and al-Sham’s (ISIS) seizures of cities and towns in northern Iraq signals a growing influence of the radical Islamic organization and threatens wider violence and instability. But as Baghdad’s hold on the country weakens, the Kurds are able to make a stronger case for an independent Kurdistan.

The Kurdish Regional Government (KRG) has been more successful in its defense against ISIS than the central government. Kurdish forces, numbering well over 100,000, appear better equipped and trained than the militant groups attempting to confront them. Responding to ISIS’s rapid advances, the Kurdish forces, or Peshmerga, deployed large numbers on June 10 to areas that have been long been contested by the Kurds and the central government in Baghdad, particularly Kirkuk. The status of Kirkuk has put a perpetual strain on the relationship between Baghdad and the KRG. The status quo under which Kurds, Arabs, and Turkmen have governed the city—an agreement enforced by the American forces in Iraq since 2003—has remained in place for over a decade.

For the first time since the U.S. invasion the dynamics have shifted in favor of Kurdish independence. Iraqi Kurds are more powerful than ever, and Turkey is more willing to accept the existence of an independent Kurdish nation at its border. Unless Iraqis immediately reach a comprehensive national reconciliation that satisfies the long marginalized Sunnis and the Kurds themselves, which is very unlikely given the unraveling situation, the Kurds will continue pushing forward for their independence. The map of the Middle East is on the verge of changing much to the benefit of the Kurds.

A beneficiary of the Kurds burgeoning independence is Israel – who received their first shipment ever of Kurdish oil this week:

The oil delivery is from the KRG’s new independent pipeline, which bypasses the central Iraqi government by running directly to the Turkish port of Ceyhan, much to the chagrin of Baghdad’s embattled government. The delivery to Israel comes at a crucial time for the KRG, which is looking to protect itself from the deteriorating situation in Iraq by being more independent economically.

The independent export of oil to Israel comes shortly after Kurdish Peshmerga forces – the KRG’s independent army – seized the oil-rich town of Kirkuk in northern Iraq, along with swathes of territory near the Turkish border, as Iraqi troops abandoned their posts in response to the advance of Sunni Muslim rebels including the radical Islamic State of Iraq and the Levant (ISIS). KRG officials have already openly entertained the option of redirecting the flow of oil from Kirkuk through the Ceyhan pipeline, particularly after the regular Kirkuk pipeline was sabotaged after Kurdish forces took control of the city.

The United States opposes the KRG’s oil pipeline, but Israeli officials told Reuters Jerusalem is keen to build relations with the Kurds, both in order to counter the growing influence of Iran and to generally broaden its options for energy supplies.

The United States, Israel’s closest ally, does not support independent oil sales by the Kurdish region and has warned possible buyers against accepting the cargoes.

Israeli leaders have been alarmed in recent months, however, by signs of a possible rapprochement between Washington and Iran.

Officials said Israel was keen to build good ties with the Kurds, hoping to expand its limited diplomatic network in the Middle East and broaden options for energy supplies.

Russia is unhappy with Israel’s emerging power as an energy giant with the finding of trillions of cubic feet of natural gas. Adding the Kurdish oil to the equation makes them very angry.

Turkey and Iran are watching the rising power of the Kurds as Israel is their first and major client of oil, as both are not interested in seeing another sovereign state establish next to their borders. Iran is not interested from religious reasons as the Kurds are considered Sunni while Iran is the mother of Shia Islam, however Turkey opposes this move from a political reason fearing the uprise of their own Kurds to be part of the future Kurdish state.

As the Middle East is changing so quickly with complete disappear of the USA and the growing influence of Russia, we can see a change of eras. It’s a different Middle East in a different world where Israel stands all alone.

Ezekiel the prophet could see it 2600 years ago. We can see it today!