“Iran’s plan is to shift the paradigm in West Asia and restore its status as a major power” — Interview with Alastair Crooke (Part II)

In the second part of his exclusive interview with Brasil de Fato, Crooke — a former MI6 agent and former European Union adviser on West Asia, as well as founder and director of the Beirut-based Conflicts Forum — reflects on potential profound changes in the region's geopolitics. In his view, the United States' role as guarantor of the security of its Arab allies and as controller of energy trade flows from the Gulf states has proved untenable, since, on the one hand, "there is no going back to those [US military bases] […], I believe they have been completely destroyed" and, on the other hand, "if you want to export your oil products, aluminium, or whatever it may be, you have to do so through an agreement with Iran". By securing control of the Strait of Hormuz and proposing that energy exported through it be paid for in Chinese renminbi, Iran is simply undermining the foundations of dollar hegemony and the financialisation of the economy: "It is the end of the petrodollar," summarises Crooke.

This new regional configuration could even have beneficial effects for BRICS in the medium and long term, despite the obvious contradictions that the war has brought to the fore. For the former British diplomat, this "is the kind of initial impetus I always thought BRICS needed to start thinking. It needs a security strategy".

Faced with the possibility of these decisive shifts in the region's political and economic balance of power, the prospect is nothing less than a return of Iran to its position as a global power, a role it held for centuries. Its loss of power in recent decades was largely due to the alliance between the US and its allies in the region — a predominantly Sunni one — who worked to "weaken and transform Iran into a vassal state". While it did not become a vassal, the country ceased to be a "major global power", something it had been for centuries. However, the war initiated by the imperialist-Zionist axis would enable Iran to "change the entire paradigm in West Asia and restore Persian power".

Read the second part of the interview with Alastair Crooke (click here to read the first part) :

There is a lot of speculation because we don't know what the future holds, but based on what we are seeing now, what might the possible trends be in the near future? Do you think this war could change the relationship between the US and other countries in the region? Is Iran trying to drive the US out of West Asia? Will the US military bases — which are very expensive — be rebuilt? Do you see any possibility of regime change in the region's monarchies, given the economic and political tension in some of these countries, for example, Bahrain?

The new Supreme Leader, Mojtaba Khamenei, a few days ago, gave a statement — fairly short, 12 minutes. And in contradiction to the Americans' five-point ultimatum, Iran gave their own ultimatum, which was an end to the [US] presence in the region, an end to the military presence, the lifting of all sanctions, the return of the Iranian frozen assets, and reparations for the damage caused. And I have no evidence, but my supposition is that this is actually a sort of legacy of his father, from the 12-day war to the period when he was martyred. I think that the aim is clear, and this explains why there will be no compromise with the Americans, and why there are no negotiations. There won't be negotiations. Why should there be negotiations? They sit on Hormuz. The US is not going to drive them out of control of Hormuz. Whether they put in troops or not, or continue to put pressure on Iran in other ways, that is not going to happen. The system — the military control, as I would say — is automatic, and goes on according to a well-prepared, deep-seated, deeply-laid plan. So no, there's no going back to these [US military] bases. People argue about how many bases there are, but I believe they've been completely destroyed. Some of the equipment, like the radar, cost a billion dollars. But that's not the point. It takes five to eight years to replace it. You can't just go into a shop, order one, and get it within a year. It's not going to be like that, even with Lockheed Martin or whoever built them.

If China were the manufacturer, they might be able to do it in a year or two, but that's not the case. [laughs]

It would be much quicker, that's for sure. It takes a lot of time, because the US has so few suppliers now. In any case, they don't have the means to do it. The important point to understand is the secondary demands. I listed the ones that were set out very clearly by the Supreme Leader. But the additional demands were very clear too: Hormuz would be gated, but open to friendly countries to transit on payment of a fee, and on a guarantee that the contents were paid for in yuan, in Chinese currency. Vessels can then traverse the sea only through this narrow channel between Larak Island and Qeshm. There's a small channel there. So you go by Qeshm, get inspected by the IRGC, and then you're allowed to continue — not via the main channel. And this would be a source of income. I saw Rubio saying "it's illegal, we can't allow this." Well, what do they think happens at the Suez? I mean, you pass through the Suez Canal and of course you pay the Egyptians a fee for passing through. Same in Panama. So this is just the US making noise. The Iranians will do this. And what they're also saying, and underlining, is that Gulf states, if they want to export their petroleum products or other products — aluminium, fertiliser, whatever it may be — they have to do it by agreement with Iran, and only Iran is able to give them the security for this trade. At the moment, there is huge indignation in the Arab states, in the Gulf states, saying this is outrageous, that they will never accept it, and that they will join the war against Iran. The UAE is saying it is willing to join the war against Iran, because the straits must be open and they don't accept this. But since they won't be able to dislodge Iran from Hormuz, and America won't be able to dislodge it either, then surely in time they will begin to understand that if they want to continue to exist as an economic entity, they have to work with Iran. Now, the important point here — and I can't give you the full details because I'm not an economist — is that some of the other items that pass through Hormuz are crucial: helium, for example, is crucial in the manufacture of chips; sulphuric acid is crucial in supply chains; fertiliser is crucial. So a lot of these things mean that really, if Hormuz remains closed for three weeks, the impact on Western economies is going to be huge — not just a little tiny twitch in the debt markets. It will be much bigger, because we'll start to see rationing of gasoline, gas supplies will be shortened, and LNG is needed for some of the processing of chips as well, as is helium itself.

Around one third of global helium production passes through the Strait of Hormuz, and Taiwan is already counting down the days before production shortages begin.

I think they have 12 days, they say, so that starts to come in short. That's right. So, it's not as if Iran has to last for years to impose its new process. But the point about this is much bigger, and this is geopolitics, is the insistence that the oil is transacted in yuan, is the end of the petrodollar. It is the end of dollar hegemony, because oil was always Middle Eastern, the control of the choke point, the control of energy, and the pricing of it in dollars has been the underpinning to the American hegemony, financial hegemony. And equally, has been, and this is just as important, is being the underpinning to the financialization of the economy, because of having energy dominance, and the dollar hegemony.

The dollar hegemony has actually produced the synthetic demand for dollars, dollars have risen, it's hollowed out their manufacturing base, because then America became uncompetitive in the manufacturing industry, and the whole thing's going towards a financialized world. So, even though America is self-sufficient largely in energy per se, is structurally geared to a different non-manufacturing way of life. They need to change it in such a way that they can stop the binary economy, which the West has created for itself, whereby you have the upper elite, billionaires, who get more and more money, without any effort to. Then you have a sinking 90%, 80% certainly, of the population who cannot afford houses, who cannot afford health care, any of that. But increasingly, because of the way America and the West has thought about artificial intelligence, the consequences of this economic crisis, which will obviously mean that the investment plans in data centres and AI and things will not materialise. The consequences of that, is this going to be a huge, unfortunate massacre of middle-class jobs in America and Europe. I say, unfortunately, because I have two children who are about to leave school. And I say to them, I really hope you can, it's going to be tough, you've got to think about what you can offer, because it's not going to be easy to get jobs after university. And in Europe, it's going to be the worst hit. So all of this is part of the calculation in this thing.

But US answer was either you have trade war with tariffs, or you start to squeeze the energy supply lines to China. This is what Venezuela was all about, stopping and hindering the supply lines of energy for China to force them to a lower level of production? And to squeeze the opposite in Russia, to squeeze the ability of Russia to export energy. I'm saying what they're doing this through blockades, and control of these seaways, and the control of the choke points, the naval choke points. Also, and of course, the key choke points are the Hormuz, Bab al-Mandab, and Malacca Straits. And so this is why Iran's sitting on Hormuz and Bab al-Mandab is so existentially threatening to the United States.

Now, the Iranians understand this fully, and they understand the economics. And of course, they will allow vessels to pass through Hormuz, but they will be controlling the volume. And therefore, who controls the volume controls the price. So America will lose control over the price of energy. At home, yes, they have it, but the thing is that oil is fungible. I mean, you can have one price here and another price there only to a certain extent, because people will move the things around, and the price will equalise at some point. So they lose the control of pricing, and therefore the control of energy supply. And this has been the basis of the whole construct to destroy the BRICS.

How will this war affect the BRICS? The West was already at war with one BRICS member – Russia – and is now at war with another BRICS member, Iran, which is defending itself by attacking US assets in the United Arab Emirates – also a BRICS member. At the same time, as you’ve already said, China and Russia are providing crucial support to Iran. It’s quite a complex situation, isn’t it?

I gave a talk in St. Petersburg, and it was a about BRICS. I kept urging: at the moment, BRICS is nothing more than a forum. People write papers, they talk, and they have conferences, and things like that, but they do not operationalise their space. And I understand why, because you've got states like India, which has likes to try and keep one foot in one camp, and another foot in another camp, and will not commit to anything. Brazil too, to a certain extent. And you have Emirates...Well, Emirates maybe won't be participating in BRICS in the future, who knows? This is the sort of kickstart I've always thought that BRICS needed to start thinking. It needs a security strategy, just for a start. Not a Russian one, separate, and a Chinese one, separate, but some larger principles of what is the frontier between the NATO sphere of influence and the Asian sphere of influence? Where does the boundary and things lie? And to think about how to deal with sanctions. Maybe the BRICS states need to have their own sanctions, or to impose sanctions. Anyway, these are just things that are sort of up in the air in some respect.

And I know China could implement a new financial trading system across Asia, just like that. If you take something like WeChat, which you can do payments and everything across it, it has 1.4 billion Chinese users. So, scaling it up for another few hundred million, it's gone. It could go out tomorrow, the Chinese will decide it. I don't know that they will decide, because they are playing this very carefully, because they understand the “Thucydides Trap”.

I was in China at the end of the year, and I was talking to a businessman there, and he has many patents. And he said: “the West chose the military implementation of AI”, which requires huge data centres and requirements like that. And he says: “we've done it completely differently. We use diluted AI in every factory space to provide - not full AI - but sort of advanced robotics, advanced automation”. So, he said: “if you take one of my factories, which at the beginning of the year was probably 2000 people, today it's 200. And we are so competitive”. He said that in manufacturing - and he has many factories -, “we have 2% price deflation”. And I looked at him and I said: “oh my God, you have price deflation, and we in the West have price inflation and accelerating price inflation”. I mean, that means we can't compete with them. This is going to have this “Thucydides Trap” going to come into play.

But you're going to have to manage this very carefully, because otherwise it's going to go off the rails. And that was further sort of compounded by the fact that I learned at the same time that the cost of a gigawatt of energy in China is currently one-sixth of that in the United States. So, with their data centres and AI, they would have to devalue the dollar by about 145% to be competitive in terms of the power input, because AI is all about gobbling power. And it's six times more expensive in the US. So, the competitive element is almost impossible. You're going to have to manage this paradox of the Chinese are rising and the West is becoming uncompetitive.

How do you think that the relationships within the Ummah [the global Islamic community] will evolve in the next period? Because you have, for one side, some countries like Saudi Arabia and Emirates, who looks like they're doubling down on the war, talking about entering the war against Iran. But you have countries like Qatar, who seems to be more cautious now, trying to be neutral. Some some statements this week of the Qatari Minister of Foreign Affairs seem to be very cautious. The Iranian Foreign Minister, Abbas Aghachi, recognized that it should take some work to restablish the trust in the region. What is your take?

It's too early to really see how the lay of the land is going to be, because I've been describing, that we're seeing a Shia world that has been electrified by these things, particularly the killing of the Supreme Leader and the fatwas that have been issued, and across everyone, whether it's in Pakistan, whether it's in Lebanon. And then we have some of the states, whether they will stay with US or not, but they are talking the language of Sunni. Not quite defence, but Sunni reaction to this. The Sunnis have to react. They can't allow this. And they can't allow Iran to dominate. So does this mean we're heading towards sectarianism? We know how easy that is for people to start that off. We've seen this in many occasions, that firing up of Sunni forms, like Wahhabis. Are we going to see a return of that? We see it already taking place in Syria. I've seen this over my lifetime, because I started in Afghanistan. And during that period, of the Russian presence, all of Afghanistan, the south, Kandahar, which is now seen as quite extremist and hardline, it was all Sufi. And so you'll get all of the north was Sufi. And of course, in Syria, too, was diverse. There was Sufism, there were various forms of Shiism, there were various forms of Sunnis, and it was a very holistic society. All of that has been crushed and will be put into something much narrower. So it's hard to give you a complete answer about where is this going? But I would say overall, it will perhaps touch on the Thucydides Trap again.

Iran was a great civilisational power. It still is a great civilisational power, but it is no longer a great power. And what we are seeing is the process, and this is part of the plan: to change the whole paradigm in West Asia, and to restore the Persian power. I use Persia loosely, just because it's too complex to talk about the various ethnic groups and everything like that. But the Persian, I don't mean it in an exclusive sense, I mean it in the wider sense. So, for a long time, from the 70s, America juxtaposed Sunni power against Iranian power and Shiite power as a whole. It was particularly apparent in 2006, after the war in Lebanon. And John Hannah wrote about this, that there was a meeting with Cheney, and he was complaining and moaning about the fact that, this war in Lebanon, like the Iraq war, was supposed to make Iran weaker. And actually, they were stronger. And he was angry about this.

Then Prince Bandar, who was the Saudi Minister for Intelligence at that point, he intervened and said “we can do something about it”.

And Cheney asked, “what?”

Prince Bandar responded: “we can cut Syria. That is the lifeline for Iran. And the king thinks that if we cut Syria, it's the next best thing to overthrowing Tehran, if we can cut Syria from the picture.

But Cheney said “Prince Bandar, how do you do this?”

And he replied: “we'd use the [fundamentalist] Islamists” .

Then Cheney said: “oh, perhaps, this is electric rail for us. I don't think we could do this”.
Banda: “you don't have to worry. I will do it. You don't have to be involved”.

And John Hannah was there, and he wrote about it, and it was public. So it's on the record. And so this was the point, in my perspective, when the Americans tried to upend the whole Middle East order, Sunnis were going to dominate. Yes, it was then expressed in the Clean Break document and other things, but it was going to be a Sunni hegemony. And that hegemony would contain and weaken and turn Iran into a client state. That was the plan. And it had came out of, in the 70s, even, in the Hudson Institute, Scoop Jackson had moved towards this plan of weakening, containing Iran, because they feared its part, as it had been unseen in the 20th century, and then after the revolution. Initially, they were not so concerned, but the revolution, afterwards, has changed it. So what we're seeing, perhaps, is the counter-rotation of this great paradigm. It's now moving back, and that's why we might find this strong pushback in the Sunni world, because it implies, possibly, that what will emerge from it I don't know, we can't tell, but maybe the reverse paradigm of Iran becoming the power in West Asia, and maybe the disappearance of some of those states that were there beforehand. But this is still to play out, so we should not get ahead of ourselves too much in discussing, I think.