The new Levant: A US-sponsored alliance to corral Iran

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At the end of October 2020, the Egyptian Prime Minister, Mostafa Madbouly, arrived in Iraq on an official visit that included a large number of ministers and officials. During his visit, Madbouly met with the Iraqi Prime Minister Mustafa al-Kadhimi, the Iraqi President Barham Salih, and the Speaker of the Council of Representatives Mohamed al-Halbousi. The visit was neither protocol nor a regular one, but one of a series of joint summits of what is called the New Levant Alliance.

In August, the Iraqi prime minister announced the project during an interview with the Washington Post. He said, “The European version of the New Levant project will be presented to the leaders of Egypt and Jordan,” explaining that the project will allow the flow of capital and technology more freely among the three countries.

Several years before that interview, specifically in June 2014, the name emerged for the first time in a study prepared by the World Bank. The name was given to a huge regional alliance that includes Iraq, Syria, Lebanon, Egypt, Turkey, and Jordan, and there were speculations at the time that Israel and the Palestinian authorities will join the alliance, but the political disputes nipped the idea in the bud until the former Iraqi Prime Minister, Haider al-Abadi, revived it. However, the events that took place then did not allow for the idea to grow and he was not destined to see it through. Nevertheless, the idea’s beginnings were during his era.

The alliance’s signs

In 2016, Egypt signed an agreement with Saudi Arabia according to which the latter shall supply Cairo with a monthly amount of about 700,000 tonnes of oil products for five years under $23 billion agreement. The agreement was reached on the sidelines of signing the maritime boundary delimitation agreement under which Abdel Fattah al-Sisi gave up the Tiran and Sanafir islands. The oil flow stopped, however, in January 2017, following a disagreement between the two countries regarding Syria and Egypt’s closeness to Russia.

Afterwards, the Egyptian Minister of Petroleum & Mineral Resources, Tarek el-Molla, flew immediately to Bagdad and signed an unprecedented agreement under which Bagdad is to supply Cairo with a million barrels of oil monthly on favourable terms and facilities for payment to replace the 700,000 tonnes that Riyadh used to send. The Egyptian-Iraqi relationship showed strong convergence after that agreement before Jordan joined the agreement as a third partner. In less than a year, the leaders of Egypt, Iraq, and Jordan held three meetings, the first of which was in Cairo during the reign of the Iraqi President, Adil Abdul-Mahdi, followed in September of last year by another meeting on the sidelines of the UN meetings in New York. The last meeting took place in Amman during the coronavirus pandemic.

The new alliance, as announced, is centred on a partnership between oil rich Iraq, which will supply Jordan and Egypt with their needs via an oil pipeline extending from Basrah to Aqaba, then to Egypt where oil will be refined then re-exported from Egypt to Europe. In return, Egypt will supply Iraq with electricity by expanding the existing linkage projects between Cairo and Amman, besides offering trade and economic facilitations that will open prospects for oil and non-oil investments to absorb the huge supply of Egyptian labour and constitute a seed for a common market among the three countries. However, there may be undergoing preparations for more than just that.

The new alliance was formed in Washington, with full American blessings, among three leaders who are key allies to the USA and loyal to the American vision. The alliance has several strategic dimensions far broader than economic partnership and mutual benefits to the three countries. Al-Kadhimi, who has been working since his first day as president to get rid of the Iranian dominance over the country, wants this partnership to bring in strong forces and Arab influence to push that Iranian dominance, hence the security and military agreements according to which Cairo is to train the Iraqi military forces that Bagdad is trying to reinforce to face the pro-Tehran militias along with attempts to eliminate these militias and appropriate their weapons.

At the same time, the last agreement, signed by Mostafa Madbouly during his visit to Bagdad and that was entitled “Oil for Rebuilding,” includes contributions from the Egyptian companies headed by the military section (Armed Forces Engineering Authority, the Ministry of Military Production, and National Service Products Organisation), besides other public and private companies in the fields of transportation, water resources, health, environment, justice, investment, housing, reconstruction, industry, commerce, and finance.

In return, Bagdad is to supply Cairo with huge amounts of oil via a pipeline that extends from al-Rumailah in southern Iraq, then passes through Aqaba Port until it reaches the Egyptian ports. Egypt, which possesses great refining capabilities, will then refine oil and re-export it, which is what al-Kadhimi referred to during his meeting with Madbouly when he said, “there is a preliminary agreement between the two countries to rapidly activate the mechanism of Oil for Reconstruction, especially since the Egyptian companies are willing to carry out development projects in Iraq in exchange for the amounts of oil that Egypt will import.”

That way, Egypt will replace China, which entered into a similar agreement with Iraq at the beginning of the present year.

The former Iraqi Prime Minister, Haider al-Abadi, signed an agreement with the Beijing government last January that includes exchanging oil revenues with implementing projects in Iraq. Bagdad opened a trust account in one of the Chinese banks to deposit the revenues of the oil that amounts to 100,000 barrels daily (three times what Cairo gets) so that this account is used to fund the companies that will implement the projects and the infrastructure in Iraq; like schools, hospitals, electricity, and sewage.

With this plan, Washington will kill several birds with one stone in Iraq, the foremost of which are its greatest opponents and competitors, Iran and China.