Is Trump Looking to Acquire Real Estate in the Middle East?
Ah, yes. Donald Trump, ever the savvy real estate man, may be looking to add some Middle Eastern real estate to the American Empire.
Can I call the homeland plus all the bits and pieces around the world an empire? Yeah sure. Why not.
You can tell that acquiring property is part of his mindset, and developing it is part of who he is.
First, it was Canada becoming the 51st state. Then he wanted the Panama Canal returned to American control. Then it was Greenland. Later, he mentioned getting title to a chunk of Palestine as part of a peace settlement. For a while, he was talking about building luxury hotels there.
Right now, the only possibility for the U.S. to gain any new territory, short of a war, rests with the Canadian Province of Alberta. They have a Canadian separation plebiscite scheduled for this fall. If it passes and they ask for statehood, Alberta could become the 51st state. But that is a long shot.
Yet, despite what many see as bullying or negotiating tactics, Trump has had some significant success. The United States now, directly or indirectly, controls petroleum exports from Venezuela.
This matters in the world of geopolitics. By virtue of controlling Venezuelan oil exports, Trump also controls oil imports to Cuba. You might have heard that the island nation depends on oil to run its old, decrepit Soviet-era power stations. Without oil, the island is slowly returning to the Stone Age. Let us declare the glories of socialism, no electricity, little food, and maybe a pot to pee in. Every American teenager should be forced to study this in school.
Is regime change coming to Cuba? Who knows? Old socialists are remarkably stubborn and repressive. The socialist elite somehow always manage to eat well while the common folk starve.
There is another side to this that is quickly coming to light. Due to previous and ongoing American sanctions on oil from Venezuela, Iran, and Russia, a shadow oil-trading and transportation market developed. This market used a fleet of old oil tankers to transport crude oil worldwide at discounted prices. Sellers were the aforementioned Venezuela, Iran, and Russia.
Buyers were mainly India, China, and, to a lesser extent, Turkey. Turkey and India agreed to back off from buying sanctioned oil after Trump threatened them with tariffs. China, not so much.
China bought oil through the shadow market because it could and because it was a great deal. China had the cash, and the three sanctioned countries were desperate to sell their oil. The Russians were so desperate to get cash that they were selling oil at close to cost, which was almost half of the world market price.
The Chinese profited greatly from discounted oil. They used cheap oil to manufacture cheap goods at even lower prices than everyone else, and got wealthy in the process. They used that wealth to lend to and bribe developing countries to slowly gain control over other natural resources, such as rare earth elements. This was part of China’s strategy for years.
Now, that strategy may be coming to an end. The world oil market price is approaching $100 per barrel. This is around $40 more per barrel than it was just a couple of months ago. The Iran war is helping Russia temporarily, but it is having the opposite effect on China. The cost of Russian oil is rising, and China can no longer get discounted oil from Venezuela. This brings us to Iran.
The U.S. and Israel had plenty of reasons to drop the hammer on Iran. Nuclear weapons development was just the final straw. You cannot trust religious fanatics with weapons of mass destruction and ballistic missiles. We have a similar issue with North Korea. The only difference is that Kim Jong-un knows war will cost him his communist paradise. The mullahs in Iran think war will make them martyrs in heaven.
One way of getting the upper hand on Iran is to either get control of Kharg Island in the Persian Gulf or threaten to destroy the oil export terminal there. The export terminal accounts for 90% of Iranian oil shipments by sea. Destroy the terminal or get control of the island, and the Iranian regime runs out of money fast.
The mere fact that the U.S. can destroy the terminal should be enough. The U.S. military took out most of Kharg Island’s defenses just the other day, but left the oil terminal alone. There is a method to this madness. Those of you who have read Frank Herbert’s original Dune novel or watched the movies will remember that in relation to the spice, Paul Atreides, aka Muad’ Dib, says, “The power to destroy a thing is the absolute control over it.”
So, now that the U.S. can destroy the terminal, will they do it? No. Trump wants oil prices to drop as quickly as possible before the midterm elections. Destroying the terminal would very likely keep prices high for months. For the price to come down, the oil must flow.
Of course, we are dealing with a government of Muslim Shia clerics. Those who have not already fled to Afghanistan, the United Kingdom, or Canada might decide to blow it up to spite Trump. This means the next most logical step is for the U.S. military to get control of it.
I did not intend to equate Donald Trump to Muad’ Dib. Trump is more like the Emperor in the story of Dune. But, just for fun, let me carry this analogy a step further. Trump recently sent for America’s version of Muad’ Dib’s Fedaykin death commandos, otherwise known as the Marines. I can almost guarantee you they are going to the island to guard the terminal.
This creates a unique and interesting situation. Kharg Island is a valuable piece of real estate. Donald Trump is a transactional type of president, who does not like to see the U.S. military used without getting something in return. Recall that Ukraine was forced to sign a minerals deal as payment for American military assistance. Once the U.S. takes Kharg Island, why not keep it?
There is some logic to it. The U.S. could ensure the oil is sold at market price, say, with a 5%-10% handling fee for guarding the Strait of Hormuz. If that happens, China can get discounted oil only from one place: Russia. Once the war with Ukraine is over, it’s likely those oil sanctions will be lifted, then China will likely be forced to pay full price or at least a higher one than they are now. If the U.S. controls Kharg Island and China misbehaves, then we can effectively cut off a large portion of their oil at the source.
Will Kharg Island become American territory? If Trump starts to talk about building a golf course there, we could have an answer.
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