While US focuses on domestic policy, China and Russia expand regional influence

While the newly inaugurated Biden administration focuses on domestic policy, US-sanctioned China and Russia are expanding their influence and reach in this region. Beijing has made a potentially game changing advance by concluding a $400 billion 25-year agreement for Tehran to supply oil to China which be financed by investment in Iranian infrastructure and Iranian investment in China. This deal is particularly important because it circumvents US domination of international financial transactions and banking which has prevented Iran from exporting oil, its main source of foreign revenue.

In response, the Biden administration said it would investigate to see if the deal Would trigger sanctions under US law. This is a typical reaction of a potential spoiler.

The deal, signed on the 50th anniversary of the establishment of diplomatic relations between China and Iran, amounts to a challenge to the US which slapped sanctions on Iran after Donald Trump abandoned the 2015 pack providing for limiting Iran's nuclear programme in exchange for lifting sanctions.

Although Democrat presidential candidate Joe Biden pledged to reenter the nuclear deal and lift sanctions on Iran as soon as it is in full compliance, as president he has not budged from Trump's punitive policy and his minions have repeatedly said Biden is not in a hurry to do his part. By procrastinating and dithering over terms for reentry, Biden has undermined trust in his word and prolonged the suffering of Iran's 83 million people who face economic melt-down as well as high levels of COVID contagion.

The agreement will not only encompass economics, politics and strategic cooperation but also provide a major role for Iran in China's Belt and Road Initiative designed to link the Orient to Europe along the two major the routes of the ancient Silk Road.  In addition to Iran, the countries which have joined the project are Saudi Arabia, the Emirates, Bahrain, Turkey, Iraq, Kuwait, Lebanon, Syria, Qatar and Yemen.

China has boosted its imports of Iranian oil to nearly 1 million barrels a day while trade between the two countries amounts to about $20 billion a year, making China Iran's main trading partner. As the deal was being signed, Chinese Foreign Minister Wang YI was touring Saudi Arabia, Iran, the Emirates, Bahrain and Turkey and contacting the foreign ministers of Jordan and Iraq.

While China's main interest in this region has been to secure its sources of oil and gas, Beijing has been shifting to renewables, financial cooperation, and COVID vaccines. The Emirates carried out third stage trials of China's Sinopharm and Russia's Sputnik V vaccines well ahead of adopting Western vaccines and Sinopharm is in the process of establishing a plant to manufacture its vaccine in the country.

Wang followed in the footsteps of his Russian counterpart Sergei Lavrov who visited the Emirates, Saudi Arabia and Qatar to coordinate oil policy, increase business and discuss electricity, agriculture, industry, and infrastructure projects as well as the exploration of outer space. Russia is also donating and selling Sputnik V doses to countries in the region.

Some 18 months ago, Russia released an updated version of its collective security proposal for the Gulf region which envisages a joint Arab and Iranian response to challenges and threats to these countries. Moscow urges all sides to avoid confrontational rhetoric and address disagreements through negotiations.

Lavrov also visited crises-ridden Lebanon to urge politicians to form a new government to initiate reforms in order to secure international financial assistance to rescue the country from economic, social and political collapse.  He received a Hizbollah delegation in Moscow to press the influential movement to expedite the establishment of such a government.

Unlike China, Russia has long history of direct involvement in regional affairs going back to the days of the Soviet Union when Moscow provided arms and military aid to Syria, Egypt, Iraq, Algeria and Libya.  Russia also won popularity in the Arab world by backing Palestinian and Algerian independence struggles.

Since unrest erupted in Syria, Russia has established an airbase in Latakia and expanded its naval service base at Tartous and, with pro-Iranian militiamen, has fought alongside government forces against opposition and takfiri forces.  Therefore, Moscow has a far deeper regional commitment  than China and is prepared to defend Russia's presence as well as the Syrian government.

Moscow has longstanding interests in Libya.  Before the ouster of Muammar Qadhafi's regime in 2011 Russia had signed or negotiated $6.5 billion worth of contracts covering arms and agricultural products sales and infrastructure projects. Russia would like to recoup its losses with fresh business and would like to exert influence over the flow of Libyan oil to Europe. Moscow is determined to counter Ankara which is seeking to overthrow Russia's close ally, President Bashar Assad, in Syria and replace his secular government with a Muslim Brotherhood regime which would be anathema to the UAE and Egypt.

Alongside Egypt and the UAE, Russia has backed General Khalifa Haftar and the eastern administration in Libya against the UN-recognised, Turkish-supported, fundamentalist-leaning government in Tripoli. While Russia has dispatched supplies, munitions and military contractors to aid the general, Lavrov has called for the warring sides to negotiate an end to the conflict. By partnering the UAE in the North African conflict zone, Russia has gained an influential friend in the Gulf.

Meanwhile Biden bides his time.