The curious tale of the Arctic Sea  

Posted by Big Gav in

One of the weirder tales percolating through the media in recent weeks has been the hijacking of a Russian ship in the Baltic sea (supposedly carrying a load of lumber) and its subsequent liberation out in the Atlantic ocean. The Age has an interesting look at the official story - Hijacking the Arctic Sea.

IT BEGAN as a curio item on an obscure maritime website and grew into the mystery of the season. What exactly happened to the Arctic Sea, the cargo ship allegedly seized by pirates, not off the wild coast of Somalia but in the genteel waters of the Baltic?

Two months after the ship was ''hijacked'', the answer is now clear - at least according to Russian investigators. Last week, they announced they had finished their probe into one of the biggest maritime puzzles since the Mary Celeste was found drifting and crewless in the Atlantic in 1872.

According to Moscow, the story is reassuringly simple. Eight armed ''pirates'' seized the Arctic Sea in the late evening of July 24, off the coast of Sweden. The pirates told the captain to sail for Africa. The Arctic Sea then slipped through the English Channel and ''disappeared'' on or around July 30, prompting a frantic international search.

Three weeks later, on August 17, a Russian naval frigate found and intercepted the boat about 300 miles off the Cape Verde Islands. Russian officers arrested the ''pirates'', who turned out to be a bunch of ethnic Russians from Estonia and Latvia. They also freed the Arctic Sea's 15 Russian crew members. This bold mission, the Kremlin claims, involving ships, military aircraft and other resources, was a national triumph.

There's only one problem with Moscow's version of events: it just doesn't stack up. ...

One of the explanations given for the hijacking was that the ship actually contained a consignment of missiles bound for Iran, with (depending on which version you read) the Israelis or a rival Russian military / intelligence faction deciding to intercept the load before it arrived. Dan at The Daily Reckoning reckons this is just one item - along with Netanyahu's recent impromptu trip to Russia - pointing to a possible Israeli strike on Iran (how many times have we heard that in the last 8 years), with implications for the oil price - A distinct possibility.
In the meantime, keep an eye on oil. Sometimes the oil price is driven by speculators. Sometimes it's driven by expectations for the economy. And sometimes it's driven by flat out geopolitical fear. We think now could be one of those times were geopolitics drives crude. Why?

We got a note from a commodities trader in Chicago over the weekend. Up at three a.m. as we're getting over our jet leg we read, "In the big geopolitical dance that has dominated recent headlines there remains one player that all the action seems to swirl around. That player is Iran.

"President Obama's announcement of the discovery of a second 'secret' uranium processing facility with shouting distance of the Shiite holy city of Qum has raised the stakes in what is quickly becoming a very dangerous game. If you read between the lines, nearly all of the geopolitical maneuvering over the past few months has been about the same thing.

"Obama dumps Bush's land-based missile system for a sea-based one that poses far less threat to Russia. Russia - without admitting it, of course - then becomes more accommodating to sanctions against Iran. Israeli Prime Minister Netanyahu goes to Russia without telling anybody and gets caught doing it. Why?

"Certainly not to talk about the weather. We believe Netanyahu was there for a specific purpose: to warn Russia what would happen if Iran did not stop producing bomb-grade uranium. We also believe Obama's controversial move was designed to give Russia political cover to pressure Iran to do just that. Now that a second uranium-producing facility has been found, the stakes have risen again.

"If some sort of political solution to the Iran crisis is not found within the next few months, Israel will strike - with or without the 'permission' of the United States and the price of oil will react accordingly. The global slowdown is currently focusing all the attention on demand, but the biggest bullish factor out there is ultimately, supply. Remove Iranian oil from the market and the old highs of $147 per barrel could be tested quickly.

Stratfor also has some pontifications on the topic - Breaking the Iran stalemate.
Israel also understands the Russia factor. Russia is in an ongoing struggle with the United States right now in trying to get Washington to recognise Moscow’s influence in the former soviet periphery. So far, the United States hasn’t given Russia what it wants. As a result, Russia continues to flout the leverage it has with the United States over its ties to Iran. Not only can Russia completely bust apart a US- led sanctions regime, but it can also provide Iran with critical weapons systems that could seriously complicate an attack against Iran down the road. The Israelis simply are not seeing the value in delaying much longer.

Israel is therefore leaning heavily on the United States to reach some sort of compromise with Moscow to bring the Russians in line on the Iran issue. Russian President Dmitri Medvedev made a statement today that may indicate that such a compromise has a chance – however slight – of happening. “I told the President of the United States that we think it necessary to help Iran make the right decision,” Medvedev said with just the right amount of ambiguity. “As for various types of sanctions, Russia’s position is very simple, and I spoke about it recently. Sanctions rarely lead to productive results, but in some cases, the use of sanctions is inevitable. Ultimately, this is a matter of choice, and we are prepared to continue cooperating with the US administration on issues relating to Iran’s peaceful nuclear program, as well as other matters.”

This is a notable shift in tone coming out of Moscow, but does not yet signify that a deal has been made between the Americans and the Russians that would alleviate the crisis over Iran. Our Russian sources are hinting to us that something bigger may be underway, but have also made clear that this is just the beginning of negotiations. One source in particular has indicated that thus far Washington is at least considering a Russian demand to postpone the US deployment of a Patriot air defence battery in Poland. In return, Moscow would stick to its pledge to delay delivery of the S-300 strategic air defence system to Iran. In essence, this would be a mutual commitment to postpone commitment to their strategic allies.

The question is, will that enough to satisfy Israel?

The Independent has an opinion piece pointing out that all the fuss about the Iranian nuclear program tends to ignore the other nuclear power in the midle east - Don't Israel's nuclear weapons count ?.
Leaders of the rich nations have turned their fire on Iran, quite rightly. On Friday came news that the Islamic Republic had been building a secret uranium enrichment plant near Qom. Then the junta fired test missiles, to prove that the bearded ones have really big willies. Unlike Iraq under Saddam, there are, in Iran, nuclear developments that could lead to weapons of mass destruction. It is not an immediate but a future danger, say credible intelligence experts and indeed Barack Obama himself.

Suddenly the president has got uncharacteristically belligerent, instructing Iran to open up all its nuclear facilities for inspection if it wants to avoid "a path that is going to lead us to confrontation". In May, Obama stood in Washington with the hawkish Benjamin Netanyahu, who we were told was there to seek assurances that there would be no shift from the conventional US position of total and unconditional support for Israel's policies right or wrong, known and clandestine.

On Thursday the US, China, Britain, France, Russia and Germany meet in Geneva and, by that time, Iran will be expected to submit to international scrutiny. As a supporter of the now crushed and broken reformers in Iran, I back the ultimatum to the fanatic and bellicose Iranian President, Mahmoud Ahmadinejad. But what about that camel in the room? The one we all see but can't point out? What about the only power in the Middle East, also fanatic and aggressive, which has a vast stockpile of weapons enough to obliterate the region? Listen people, we need to talk about Israel. And soon. Like now.


Did you see this one, supposedly clarifying the situation on the nuclear facility that was recently "found"?

No - thanks - Paul Craig Roberts has an entertaining turn of phrase - I haven't read him for a while...

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