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More Detailed Testing planned for Mishrif

By , October 11, 2014 2:34 am

More Detailed Testing planned for Mishrif

By John Lee.

In its Drilling and Production Update issued today (Friday), Dragon Oil has said that it plans more detailed testing at its Mishrif site:

On 10 September 2014, the consortium comprised of Kuwait Energy (70% and operator) and Dragon Oil (30%) reported its first oil discovery at Block 9, Iraq.

“The successful discovery was at the consortium’s first target, the Mishrif formation at 2,700 metres, in its Block 9 exploration well, Faihaa-1.

“Preliminary tests of the Faihaa-1 Mishrif formation resulted in a flow rate of circa 2,000 bopd of 20 API oil on 32/64″ choke.

“The consortium will conduct more detailed testing on Mishrif towards the end of the year.

“The consortium’s strategy is to continue drilling activities, exploring deeper horizons and collecting further data, to evaluate the discovery and to define an appraisal plan.”

(Source: Dragon Oil)

Iraq Business News

Oil: More About Supply than the Dollar

By , October 10, 2014 9:30 am

Oil: More About Supply than the Dollar
By: Zerohedge on: 10.10.2014 [11:11 ] (102 reads)

Oil: More About Supply than the Dollar

Submitted by Marc To Market on 10/10/2014 06:20 -0400

The US dollar’s upside momentum has faded, but oil prices remain depressed. Many observers try, too hard perhaps, to link the decline in commodity prices in general, and oil in particular, to the appreciation of the dollar. Yet the situation is considerably more complicated.

There is a case that can be made that the decline in commodity prices reflects slower world growth prospects in general. Demand in China, the key consumer of commodities, has softened, and its crackdown on using commodities to disguise capital flows, or use as collateral for loans, may also be weighing on demand. This weakness in the global economy stands in contrasts to the US economy, which grew 4.6% in Q2, and appears to have been around 3% in Q3. This contrast, or divergence, has helped bolster the dollar.

However, this conventional narrative does not do justice to the supply side. From a high level, more often than not, dramatic moves in commodities seem to be a reflection of supply shocks more than demand shocks. For example, record harvests in the US explain the decline in grain prices more than the dollar or a slowing of the world economy can.

Oil prices have fallen by 17-20% since mid/late June. There may be some role for the global slowdown and the appreciation of the dollar, but these are not the main drivers. We see two main forces. The first is Saudi Arabia. It usually acts as the swing producer, cutting output when prices are low and increasing output when prices are high. It is not cutting output presently. To the contrary it looks to have stepped up its output. The key question is why?

As in many important developments, this too could be over-determined (meaning more than one cause or consideration). First would be Saudi Arabia’s domestic considerations. It depends on oil revenues to finance the government’s activities, including a generous welfare program. By boosting output, it can maintain overall revenues in a soft oil price environment.

Second, some suggest may also be a favor to the US in that a fall in oil prices adds to the pressure on Russia. I am sympathetic to arguments that it was the collapse in oil prices more than the Reagan-inspired arms race that ultimately led to the fall of the Soviet Union. While it is possible that Saudi Arabia changed tactics are part of some kind of pact with the US, it does not seem compelling and is contradicted by a third consideration. A decline in oil prices, especially if a move below $ 80-$ 85 a barrel can be sustained, it could change the dynamics of the US shale projects.

Fourth, the Saudi oil stance may be a warning shot to OPEC, which meets early next month. By boosting output, it may enhance its effort to reinstate discipline within OPEC. Its internal battle within OPEC means that if it does not pick-up market share, its rival Iran would. Some observers think there is a proxy war of sorts being fought between Saudi Arabia and Iran. Libya and Venezuela domestic considerations do not favor cuts in output. Separately, Russia may also be inclined to step up production to limit the decline in revenues.

The sharp drop in oil prices is also being linked by most to weaker demand. While there may be some role here, we encourage investors to give supply factors their due. As the low cost producer, it will make up in volume the revenue lost by the decline in price. Last week Saudi Arabia reduced the price of Arab Light crude to Asia to six year lows.

Many pundits thought the US was the main loser in the mega-energy deal between China and Russia earlier this year. They are reducing the role for the dollar, was a common assessment. That is a side show and of little consequence as the dollar’s appreciation in recent months has demonstrated. Instead, the deal may have opened a new front of competition for OPEC.

Saudi Arabia’s decision that leads to increasing its market share intensifies the competition within OPEC. Today, Iran announced it will cut the price of its oil exported to Asia, apparently matching the Saudi’s move. This is what a price war would look like and it is squeezing some producers, like Nigeria, already. Next week, Kuwait and Iraq will announce their prices. Not to cut prices, would see them lose market share, but to cut prices feeds the price spiral.

The drop in oil prices can only exacerbate the deflationary risk in the euro area. If sustained, it may also hamper the BOJ’s effort to drive core inflation (core means excluding fresh food, not energy) to 2%. In the US, the drop in oil prices, if translated into gasoline and heating oil prices, will help boost disposable income, which may be noteworthy given the lack of real wage increases, and therefore consumption. The Fed targets core inflation (for which core excludes food and energy). Rather than focus on the impact on prices, policy makers would likely focus more on the positive impact on demand.

US output is another supply side shock. In the week through October 3, US crude output was 8.88 mln barrels a day, and for the 48 continental states, it was highest weekly figure since 2010. Since 2008, the EIA estimates that US oil output is up more than 70%. Its 2014 forecast of average daily output in the US this year of 8.53 mln barrels can be surpassed. During that same week, US oil imports were 7.71 mln barrels a day. This is about 1.5 mln barrels a day than the average in the 2011-2013 period. The EIA expects imports to fall to 6 mln barrels a day next year.

Through the week of October 3, US crude inventories rose by five mln barrels. The consensus had forecast a build of a little more than one million barrels. Crude inventories are about 2% above the five year average, and refinery utilization has fallen to the lowest since June.

Talk of peak oil and the demise of the dollar spurred fantastic talk of a return to $ 150 a barrel and higher. It was supposed to support the shift in the world economic order, leaving aside the fact that China is a larger importer of oil, or that the world economy does better (at least in the short and medium term) with cheaper energy. While scenarios are high oil prices have been gamed out, we suspect not sufficient attention has been given to the opposite, and just as plausible a scenario of a further material drop in oil prices.

The 10-year average (120-month) of WTI is about $ 82.00 a barrel. In 2011 and 2012, it hit $ 75-$ 77. These do not seem like unreasonable medium-term targets. Technically, a break of $ 73 a barrel could send WTI toward $ 64, which corresponds with the 2010 low. A break of that would indeed be significant. (en) RSS feed for articles and news

First U.S. Stealth Jet Attack on Syria Cost More Than Indian Mission to Mars

By , September 27, 2014 8:33 am

First U.S. Stealth Jet Attack on Syria Cost More Than Indian Mission to Mars
By: on: 26.09.2014 [13:28 ] (102 reads)

First U.S. Stealth Jet Attack on Syria Cost More Than Indian Mission to Mars

F-22 Raptor stealth fighters were needed in case the Syrians used their sophisticated air defenses. But Raptors don’t come cheap.

Fears of a potent Syrian air defense system drove the U.S. Air Force to send its silver bullet force of F-22 Raptor stealth fighters into battle for the first time ever. The Pentagon confirmed on Sept. 23 that the $ 150 million jets had struck an ISIS command and control facility in Raqqah, Syria with a satellite-guided bomb. That was right after an initial wave of U.S. Navy Tomahawk cruise missiles hit their targets around Aleppo and Raqqah.

But the Raptors’ first mission wasn’t cheap. Together, the missiles and airstrikes cost at least $ 79 million to pull off, according to a Daily Beast tally.

That’s more expensive than India’s mission to Mars, which was successfully completed Wednesday at a cost of just $ 74 million.

The U.S. government told the Bashar al-Assad regime about the incoming attacks shortly before they happened. But the Pentagon did not trust the Syrian military to leave American warplanes alone as they struck ISIS and another Al Qaida-affiliated terrorist group called Khorasan. That’s why the Air Force needed assets like the blisteringly fast, high-flying Raptor which could operate inside heavily defended airspace with relative impunity.

“It’s important to remember that these strikes against ISIS and others in Syria are occurring without any previous degradation of the IADS integrated air defense system there,” said one Air Force official familiar with stealth combat aircraft operations.

One of the Pentagon’s goals is to minimize the risk to American forces during this air campaign. “You stack that against the clear message to the public in his speech, the President wanted to mitigate risk as much as possible,” the official said. “The use of the F-22 over Syria presently is easily feasible and extremely logical.”

The U.S. government told the Bashar al-Assad regime about the incoming attacks shortly before they happened. But the Pentagon did not trust the Syrian military to leave American warplanes alone as they struck.

Prior to the Syrian civil war, the country had a substantial air defense network—mostly consisting of older Soviet-built systems. However, Syria is known to have acquired some modern Russian surface-to-air missiles systems such as the now-infamous Buk system—also known as the SA-11 Gadfly—and the Tunguska short-range missile defense system also called the SA-19 Grison. But how much of Syria’s air defense network is functional is an open question.

Moreover, unlike in 2011 during the Operation Odyssey Dawn air campaign against Muammar Gaddafi’s Libyan dictatorship, the Raptors were already in the area. While the Pentagon will not officially confirm that the F-22s were operating out of the Al Dhafra air base in the United Arab Emirates, it is known that the Raptors often deploy to that installation for what Air Force calls “theatre security packages”—or TSPs.

The last known F-22 unit to rotate into Al Dhafra was the 27th Fighter Squadron, which is assigned to the 1st Fighter Wing at Joint Base Langley-Eustis in Virginia. “The F-22s are already in theater for a TSP, so the draw on resources is not as large to provide strike support refueling to them because they’re already there,” said the Air Force official.

Experts and many Air Force officers expect that the Raptor will fly additional combat sorties in the coming days. “More F-22 missions are a real possibility. Even in this open-ended campaign, getting the mission done with precision and least possible risk is paramount,” said IRIS Independent Research president Rebecca Grant, which has close ties to the Air Force. “F-22s really do have unique abilities to evade defenses, strike with precision and sniff up information about Syrian defenses. So why wouldn’t it be used?”

Grant said she does not expect any political blow-ups over the Raptor, which was terminated in 2009 by then Defense Secretary Robert Gates—who believed the jet to be a costly and useless relic of the Cold War. Instead of the 750-strong fleet originally envisioned, the Air Force received only 187 Raptors in a move that was viewed by many in Washington as purely political. “This is about doing the job right and the F-22 was simply part of that,” Grant said.

But the F-22 is extremely expensive to operate and difficult to maintain. In 2013 the Raptor cost the Air Force about $ 68,000 per hour to operate once maintenance and other factors are added in, according to documents provided by the Center for Defense Information.

The Raptors were only one of the line items for Monday night’s raids. The Daily Beast has tallied up a rough estimate of the cost of the initial air trikes in Syria. According to the Pentagon, the Navy fired 47 Tomahawk missiles, each of which cost about $ 1.6 million, for a total of $ 75.2 million. Assuming a mission duration of about six hours, and a strike package consisting of four F-22s, four F-15Es, four F-16s, two B-1 bombers and four MQ-9 Reapers—which would be consistent with Air Force doctrine—the total cost of Air Force portion of the bill would be about $ 3.9 million. Combined with the cost of the cruise missiles, the Syria raid cost the American taxpayer roughly $ 79 million, based on the Center for Defense Information data.

Because of the F-22’s astronomical price tag, critics often assail the jet for not participating in many recent wars. But one of the big reasons the Raptors have not been used in combat until now is that they were not needed. There was no high tech foe in Iraq or Afghanistan, and over Libya, the Raptor was not the right jet for the task. “The initial OOD Operation Odyssey Dawn strikes required surprise, and repositioning F-22s to Italy would have obviously spoiled surprise,” an Air Force official explained. “After the first night of OOD in 2011, stealth wasn’t required, the IADS integrated air defense system was completely destroyed and the Libya Air Force completely destroyed within a matter of few short hours.”

Once the Air Force completed those chores, there was no reason to use the tiny and expensive fleet of Raptors. “After the early hours of OOD the airpower needs switched to armed Strike Coordination and Reconnaissance (SCAR) missions, which even the newest increment F-22s are not well suited for despite their good ground attack capability,” the official said.

Conventional strike and ground attack planes like the F-15E Strike Eagle, F-16 Fighting Falcon, the A-10 Warthog or even massive, lumbering AC-130 Specter gunships are better suited for that mission. “Deploying F-22s would mean dedicating literally—not figuratively—extremely scarce resources to moving a platform into the area that lacked the equivalent firepower and tactical experience in SCAR that F-15Es and F-16s have already in theater,” the official said.

It wasn’t the number of fighters that was the problem; rather the Air Force did not have enough cargo planes and aerial tankers to keep the fighters gassed up. “Air refueling and airlift assets were the literal pinch I am describing here,” the official said.

During the 2011 campaign, the service was overstretched with three major simultaneous operations over Japan, Libya and Afghanistan. “Each of these alone created a tremendous draw on resources. But in addition to these committed forces there was even further demand for additional airlift and refueling forces to be held in reserve for a Presidential movement mission, and the possibility of a bomber option against Osama bin Laden that was still being considered by then Defense Secretary Leon Panetta,” the official said. “In such an environment would you dedicate refueling and maintenance airlift that was not available simply to get F-22s into the fight where there was no operational necessity? Of course not.” (en) RSS feed for articles and news

Euro Economic Data Could Prompt More ECB Action

By , September 23, 2014 3:59 am

Stack of one-euro coins on a chartEven though the euro is holding some of its recent gains today, there are expectations that could change if the ECB has to take more action to try to stimulate the eurozone economy. The latest economic data isn’t all that encouraging, and the ECB might be under pressure to do more.

The latest economic data out of the ECB is somewhat disappointing. Business activity in the eurozone expanded at a slower rate than expected, dropping to 52.3 from 52.5. While that’s still in expansion territory, the disappointment comes from the fact that the expansion is slowing.

Earlier this month, the ECB cut its rate again, as well as announced it will be participating in quantitative easing by purchasing assets. The idea is to try to stimulate the economy. Previous efforts don’t seem to be working, but the ECB might wait to see if the latest round of actions help make a difference.

For now, though, the news hasn’t dented the euro’s current performance too much. The 18-nation currency is still holding its own, logging gains against some of its major counterparts today.

At 10:34 GMT EUR/USD is up to 1.2884 from the open at 1.2850. EUR/GBP is up to 1.6383 from the open at 1.6361. EUR/JPY is down to 139.6850 from the open at 139.8500.

If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

Forex News

More Than Just Gas: Is This Natural Resource The Reason For The Ukraine Civil War?

By , September 18, 2014 8:28 pm

More Than Just Gas: Is This Natural Resource The Reason For The Ukraine Civil War?
By: Zerohedge on: 18.09.2014 [15:56 ] (149 reads)

More Than Just Gas: Is This Natural Resource The Reason For The Ukraine Civil War?
Tyler Durden’s picture
Submitted by Tyler Durden on 09/18/2014 11:25 -0400

Earlier today, we got a definitive confirmation that when Obama was talking about “costs” when jawboning on the ongoing Ukraine civil war, he envisioned not only Germany, and thus Europe, both of which are teetering on the edge of a triple-dip recession due to Russian sanctions, but Ukraine itself. The reason: the Ukraine economy appears to have ground to a halt following an overnight report that the war-torn country’s industrial output plummeted 21.4% Y/Y in August, above the 18% estimate, and some 12.7% on a monthly basis. As the chart below shows, this was the biggest drop in industrial production since the global crisis of 2009 and followed a 12% fall year-on-year in July.

As the FT further added, according to an EBRD forecast earlier today, the Ukrainian economy will contract 9% this year, a far greater contraction than assumed in the IMF’s bailout (odd how that always happens). Accordingly, this “makes sustainability of Kiev’s government debts much more doubtful, and has sparked concerns that the country will eventually be forced to default and restructure.”

As skepticism grows that Ukraine will be the next Greece, only without the backstop safety net of the EUR currency, bondholders are starting to get skeptical, and overnight the yield on Ukraine bonds due April 2023 slid to 10.61%, the highest in 4 months on rising fears of a default.

And while the collapse, in either the economy or the bonds, were not surprising and were predicted here and many other places, what did seem out of place was the following observation by Reuters:

The statistics office said the main industries of Ukraine’s Donetsk region, one of the areas where the war is most intense, had suffered, with coal extraction down almost 60 percent and steel production down by 30 percent.

In other words, while the most important commodity for Europe is gas, whose supply Russia largely controls on the margin, for Ukraine the one commodity, located deep within the perimeter of the raging civil war, and which it desperately needs to regain access to to stop its economic collapse, is the following (courtesy of Stratfor):

Which begs the question: are the massive stores of coal in the Donetsk region the main reason why Russia continues to support a civil war in just that region, a war which with every passing day means the Ukraine bankruptcy, and inevitable regime change, is also one day closer? (en) RSS feed for articles and news

More Assistance for Displaced Persons

By , September 15, 2014 4:37 pm

More Assistance for Displaced Persons

The International Red Cross and Red Crescent Movement has pledged to intensify its humanitarian activities in Iraq, and to increase assistance for more than 1.5 million Iraqis displaced as a result of continuous fighting in various parts of the country.

The pledge was made during a visit to Iraq by Movement leaders that included the secretary-general of the International Federation of Red Cross and Red Crescent Societies (IFRC), Elhadj As Sy, and the director-general of the International Committee of the Red Cross (ICRC), Yves Daccord (pictured).

The delegation was seeking to strengthen cooperation and coordination among the various Movement components that are working in Iraq to alleviate the suffering caused by the armed conflict.

The Iraqi Red Crescent Society has been providing assistance to hundreds of thousands of displaced people in 17 provinces,” said DrYassin al-Ma’amouri, the president of the Iraqi Red Crescent, who accompanied the delegation on its visit to settlements of displaced persons in Baghdad and in Dohuk in Iraqi Kurdistan. “The armed conflict has given rise to humanitarian needs on so great a scale that no single humanitarian organization can adequately respond to them. This visit reflects the Movement’s support for Iraqi Red Crescent efforts to provide relief and assistance to displaced people.”

More than 1.5 million people have been displaced since last January, by fighting that began in Anbar and spread to Mosul and other locations. The Iraqi Red Crescent, the ICRC, the International Federation and a number of National Societies from around the world mounted a large-scale response that included the provision of food, water, medical care and other necessities.

The IFRC will mobilize its collective force, namely its 189 Red Cross and Red Crescent members, to provide further support for the Iraqi Red Crescent’s efforts to increase assistance to displaced people,” said Mr As Sy. “We applaud Iraqi Red Crescent volunteers for the extraordinary work they are doing under extremely difficult circumstances. A robust response, with a particular focus on the most vulnerable communities, is the need of the hour. With this in mind, we are appealing for additional emergency contributions to the Movement.

The ICRC delegation in Iraq had announced earlier that it had provided food, clean drinking water, medicines and medical supplies, and other relief assistance to large numbers of displaced persons in various locations in Iraq.

The ICRC stands ready to provide more assistance to the victims of the armed conflict in Iraq,” said Mr Daccord. “We also appeal to all parties to the conflict to facilitate the work of Movement personnel and to allow them access to all locations, so that they can help to preserve the lives and dignity of people affected by these difficult circumstances.

The Movement delegation visited the headquarters of the Iraqi Red Crescent and met with Dr Yassin to coordinate efforts to step up the Movement’s response to the needs of people affected by the conflict, and to express solidarity with the Iraqi Red Crescent and the people of Iraq. The delegation also visited distribution sites for displaced persons in Baghdad, where large numbers of people have taken shelter.

We are concerned by reports of serious violations of international humanitarian law, and by the seizure and detention of increasing numbers of people by parties to the conflict,” said Mr Daccord. “The Movement reminds all parties involved in the hostilities of their obligation under humanitarian law to treat persons deprived of their liberty humanely, to spare civilians and civilian objects, and to facilitate the delivery of humanitarian aid.

The wounded and the sick must be provided with appropriate medical care and granted prompt and safe access to health services. Medical facilities must be protected and respected, and every effort made to ensure that medical personnel can carry out their activities unhindered.

(Source: ICRC)

Iraq Business News

Fight Against Islamic State More Notable for What It Isn’t Than for What It Is

By , September 11, 2014 3:55 pm
The heavy-handed approach we used to fight Al Qaeda turned out to be a recruiting drive for the Islamic State. (Photo: Flickr)

The heavy-handed approach we used to fight Al Qaeda turned out to be a recruiting drive for the Islamic State. (Photo: Flickr)

In the New York Times, Eric Schmitt, Michael Gordon and Helene Cooper report:

The Obama administration is preparing to carry out a campaign against the Islamic State in Iraq and Syria that may take three years to complete, requiring a sustained effort that could last until after President Obama has left office, according to senior administration officials.

The first phase, an air campaign with nearly 145 airstrikes in the past month, is already underway to protect ethnic and religious minorities and American diplomatic, intelligence and military personnel, and their facilities, as well as to begin rolling back ISIS gains in northern and western Iraq.

The next phase, which would begin sometime after Iraq forms a more inclusive government, scheduled this week, is expected to involve an intensified effort to train, advise or equip the Iraqi military, Kurdish fighters and possibly members of Sunni tribes.

But what’s interesting about it is that:

The military campaign Mr. Obama is preparing has no obvious precedent. Unlike American counterterrorism operations in Yemen and Pakistan, it is not expected to be limited to drone strikes against militant leaders. Unlike the war in Afghanistan, it will not include the use of ground troops, which Mr. Obama has ruled out.

Unlike the Kosovo war that President Bill Clinton and NATO nations waged in 1999, it will not be compressed into an intensive 78-day tactical and strategic air campaign. And unlike during the air campaign that toppled the Libyan leader, Col. Muammar el-Qaddafi, in 2011, the Obama administration is no longer “leading from behind,” but plans to play the central role in building a coalition to counter ISIS.

Equally notable, what it isn’t is a police action, which, if we’d used that approach against Al Qaeda, might not killed and alienated civilians, driving many of them in to the arms of the Islamic State. With the Islamic State, we’ve finally got the war that wasn’t justified against terrorism.

Foreign Policy In Focus

More Companies Join IBBC

By , September 10, 2014 4:54 pm

More Companies Join IBBC

By John Lee.

The Iraq Britain Business Council (IBBC) has welcomed two new members:

  • Zaha Hadid Architects (ZHA), the internationally renowned design firm – with British-Iraqi Pritzker Architecture Prize winner Zaha Hadid at its helm – is set to bring its bold and visionary design to Iraq, as it is contracted to design the new parliament and central bank in Baghdad;
  • AECOM, a leading provider of professional technical and management support services globally, has also joined the influential trade body.

(Source: IBBC)

Iraq Business News

Repairing Baiji Refinery to take more than a Year

By , September 6, 2014 10:18 am

Repairing Baiji Refinery to take more than a Year

By John Lee.

The KRG’s Minister of Natural Resources, Ashti Hawrami, has said repairs to the Baiji refinery will take more than a year, following attacks by militants of the Islamic State in June.

According to the report from NINA, he also confirmed that shipment of oil through the pipeline linking Kirkuk and the Turkish port of Ceyhan would not be available after being “vandalized”.

(Source: NINA)

Iraq Business News

No More Cold War: Calling for a Peaceful Settlement in Ukraine

By , September 3, 2014 7:47 pm

NATO troops drill amid an increase in East-West tensions in Europe. With the United States and Russia in possession of over 15,000 of the world’s 16,400 nuclear weapons, humanity can ill afford a rekindling of old conflicts. (Photo: Medien Bundeswehr / Flickr)

It is ironic that at this moment in history, when so many people and nations around the world are acknowledging the 100th anniversary of our planet’s hapless stumble into World War I, great powers and their allies are once again provoking new dangers where governments appear to be sleepwalking towards a restoration of old Cold War battles.

A barrage of conflicting information is broadcast in the various national and nationalistic media with alternative versions of reality that provoke and stoke new enmities and rivalries across national borders.

Moreover, NATO’s new disturbing saber-rattling—with its chief, Anders Rasmussen, announcing that NATO will deploy its troops for the first time in Eastern Europe since the Cold War ended, build a “readiness action plan,” and boost Ukraine’s military capacity so that “In the future you will see a more visible NATO presence in the east,” all while disinviting Russia from the upcoming NATO meeting in Wales—opens new possibilities for endless war and hostilities.

Rekindling Old Conflicts

With the United States and Russia in possession of over 15,000 of the world’s 16,400 nuclear weapons, humanity can ill afford to stand by and permit these conflicting views of history and opposing assessments of the facts on the ground to lead to a 21st-century military confrontation between the great powers and their allies.

While sadly acknowledging the trauma suffered by the countries of Eastern Europe from years of Soviet occupation, and understanding their desire for the protection of the NATO military alliance, we must remember that Russia lost 20 million people during World War II to the Nazi onslaught and is understandably wary of NATO expansion to its borders in a hostile environment.

This despite a U.S. promise to Gorbachev, when the wall came down peacefully and the Soviet Union ended its post-WWII occupation of Eastern Europe, that NATO would not be expanded eastward, beyond the incorporation of East Germany into that rusty Cold War alliance.

Russia has also lost the protection of the 1972 Anti-Ballistic Missile Treaty, which the United States abandoned in 2001, and warily observes missile bases metastasizing ever closer to its borders, in new NATO member states, while the U.S. government rejects repeated Russian efforts for negotiations on a treaty to ban weapons in space, or Russia’s prior application for membership in NATO.

Why do we still have NATO anyway? This Cold War relic is being used to fire up new hostilities and divisions between Russia and the rest of Europe.

Facts on the Ground

Meanwhile, one of the most dramatic episodes from the uptick in tensions in Eastern Ukraine remains shrouded in mystery.

An independent international inquiry should be commissioned to review events in Ukraine leading up to the crash of Malaysian Airlines flight MH17 and of the procedures being used to review the catastrophic aftermath, including this latest outbreak of hostile actions from NATO.

Indeed, Russia has already called for an investigation of the facts surrounding the Malaysian airplane crash. The international investigation should factually determine the cause of the accident and hold responsible parties accountable to the families of the victims and the citizens of the world who fervently desire peace and peaceful settlements of any existing conflicts.

Another investigation might include a fair and balanced presentation of what led to the deterioration of U.S.-Russian relations since the fall of the Berlin Wall, and the new hostile and polarized posture that the U.S. and Russia, with their allies, find themselves in today—with NATO now threatening greater militarization and provocations against Russia in Eastern Europe.

The United Nations Security Council, with U.S. and Russian agreement, has already passed Resolution 2166 addressing the Malaysian jet crash, demanding accountability, full access to the site, and a halt to military activity, which has been painfully disregarded at various times since the incident.

One of the provisions of Resolution 2166 notes that the Council “supports efforts to establish a full, thorough, and independent international investigation into the incident in accordance with international civil aviation guidelines.”

Further, the 1909 revised Convention on the Pacific Settlement of International Disputes adopted at the 1899 Hague International Peace Conference has been used successfully to resolve issues between states so that war was avoided in the past.

Regardless of the forum where the evidence is gathered and fairly evaluated, all the facts and circumstances should be made known to the world as to how we got to this unfortunate state of affairs on our planet today and what might be the solutions.

Feeding the Military-Industrial Complex

All the members of NATO, together with Russia and Ukraine, should end the endless arms race, which only feeds the military-industrial complex that U.S. President Ike Eisenhower warned against.

They must engage in diplomacy and negotiations, not war and hostile alienating actions.

The world can little afford the trillions of dollars in military spending and trillions and trillions of brain cells wasted on war when our very Earth is under stress and needs the critical attention of our best minds and thinking. Our abundance of resources mindlessly diverted to war should be made available to create a livable future for life on earth.

Alice Slater is a founder of Abolition 2000, which works for a treaty to ban nuclear weapons. 

Foreign Policy In Focus