Thursday, January 26, 2012

Eye on Iran: Iran Set to Turn Off Oil Supply to Europe

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Der Spiegel: "It's a move which has tit-for-tat written all over it, but one which could nonetheless have a serious impact: The Iranian government wants to present a bill to parliament this weekend calling for an immediate halt to oil deliveries to Europe. The move, with most reports citing the Iranian news agency Mehr, has come about in response to the EU agreement to impose sanctions against Iran, which were announced earlier this week. The sanctions banned any new contracts for buying oil from Iran, but allowed existing deals to continue until July in order to give countries time to find other sources. But that process is now at risk after the latest move from Tehran, a step the Iranian government had already threatened. 'If this bill is passed, the government will be forced to stop selling oil to Europe before the actual implementation of their sanctions,' said Emad Hosseini, spokesman for the Iranian parliament's energy commission, reportedly said. The bill is set to become law on Sunday. The EU sanctions allow for oil deliveries from Iran until July 1. Any pre-empting of this timescale by Tehran could prove problematic for countries like Italy, Greece and Spain, who would need to urgently find new suppliers." http://t.uani.com/A10CYs

WSJ: "After being slapped with an oil ban by the European Union this week, Iran has suggested its petroleum could be simply displaced, not lost, in the fungible pool of global oil markets. But experts disagree, saying the sanctions are likely to be a boon to the world's two largest crude producers, Russia and Saudi Arabia, and push up the average price of oil charged globally. 'Some of the lost supply [to Europe] may be met by Saudi Arabia,' Vienna-based consultancy JBC Energy said in a note Tuesday. But, 'Russian Urals will no doubt [also] be the clear choice for regional refiners.' ... According to Washington-based consultancy Eurasia, a total Iran-oil ban in the EU and import reductions in countries like Japan and Korea could leave about 1.3 million barrels a day of Iranian oil-half of the country's oil exports-looking for a new home. Iran's largest oil buyers, India and China, which have so far resisted U.S. pressure, have been seen as natural replacements for the loss of European markets. That's because 'by the end of the year, Iran's remaining buyers will be looking for at least a 10% to 15% price discount,' said Trevor Houser, a partner at New York-based economic-research firm Rhodium Group." http://t.uani.com/zroqqU

Guardian: "Iran is unlikely to move towards building a nuclear weapon in 2012 because it cannot yet produce enough weapon-grade uranium and is being deterred by sanctions and the prospect of an Israeli attack, according to a draft report by the Institute for Science and International Security (Isis). The report by the institute founded by nuclear expert David Albright offers a more temperate view of Iran's nuclear program than some of the heated rhetoric that has surfaced since the United States and its allies stepped up sanctions on Tehran. The Isis analysis is revealed after a prediction that Israel will attack Iran in 2012 to try and stop any nuclear bomb programme. 'Iran is unlikely to decide to dash toward making nuclear weapons as long as its uranium enrichment capability remains as limited as it is today,' the report said." http://t.uani.com/wuQDUn

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Nuclear Program & Sanctions

WashPost: "Iran is ready to revive talks with the world powers, President Mahmoud Ahmadinejad said Thursday, as toughening sanctions aim at forcing Tehran to sharply scale back its nuclear program. Even so, he insisted that the pressures will not force Iran to give up its demands, including to continue enriching uranium, that led to the collapse of dialogue last year... Iran had previously indicated that it is ready for a new round of talks. Ahmadinejad is the highest-ranking official to make the offer. He accused the West of trying to scuttle negotiations as a way to further squeeze Iran." http://t.uani.com/zJ4b8M

Reuters: "Italian oil and gas group Eni is owed $1.4-1.5 billion in oil by Iran and has been assured its buyback contracts will not be part of the embargo on crude imports from the Islamic Republic, an Eni executive said on Wednesday. The European Union agreed on Jan. 23 to ban Iranian oil imports, but the embargo will not be fully implemented until July 1, to avoid harming economies to whom Iran has been a major supplier... About 9,000 barrels per day of oil are withdrawn each day, Eni said in an emailed statement quoting comments made by its head of communication Gianni Di Giovanni on Wednesday." http://t.uani.com/AramLQ

Reuters: "Turkish lender Halkbank will continue to handle customers' oil payments to Iran as long as they comply with international regulations, the bank's general manager said in the wake of fresh, unilateral U.S. and EU sanctions. Halkbank's dealings with Iran drew attention last year when Indian refiners disclosed they were channeling oil payments through the Turkish bank as their own central bank had shut its payment facility, fearing U.S. retribution. Majority state-owned Halkbank is Turkey's sixth largest bank, based on unconsolidated assets, and has a representative office in Tehran." http://t.uani.com/zxY2v7

Human Rights


NYT: "The judicial authorities in Iran have arrested at least half a dozen journalists and bloggers over the past few weeks, according to their acquaintances, opposition Web sites and rights groups. The moves appear to be part of a pre-emptive campaign of intimidation to thwart protests surrounding the parliamentary elections that are scheduled to be held in early March. The arrests of the journalists and bloggers, including two prominent women whose blog posts are widely read in Iran, have not been reported by the official news media. Rights groups and people who know the detained journalists said the government apparently wanted word of the arrests to spread informally, to heighten the atmosphere of fear and paranoia. It also was unclear what specific charges, if any, had been lodged against those who were arrested. None seem to have been politically active or to have published anything that might be considered seditious since the last major Iranian government crackdown on free expression in February 2011." http://t.uani.com/yPGchU

Domestic Politics

NYT: "Facing a wave of panic selling by Iranians worried that international sanctions and inflation are destroying the value of the country's currency, the rial, Iran's president reversed himself on Wednesday and allowed bank interest rates to rise sharply in an effort to stop a slide that has depressed the rial to a relentless string of record lows... The unofficial foreign exchange rate in Tehran has fallen to about 23,000 rials to the dollar, compared with about 11,000 to 12,000 to the dollar in December - a 50 percent drop over a month. The weakened rial means Iranians must pay far more for goods, especially imports... The rates will rise to 21 percent, up from 12.5 percent, to encourage people to put their rials in the bank instead of selling them. Still, it was unclear if the move would ease anxiety." http://t.uani.com/A2HntC

Foreign Affairs


Reuters: "Authorities in Azerbaijan, a former Soviet republic bordering Iran, have arrested two men suspected of plotting to attack prominent foreigners including Israel's ambassador and a local rabbi, officials and media reported on Wednesday. The National Security Ministry said the men were connected to an Iranian citizen who had links with Iran's intelligence. Azerbaijan, a secular Muslim country, is home to more than 9,000 Jews and has friendly ties with Israel and the United States. A major energy producer, it exports oil to Israel and imports weapons and military hardware." http://t.uani.com/yLzfdy

Opinion & Analysis


Colin Kahl in FP: "One year ago today, Egyptians took to the streets to demand the removal of Hosni Mubarak's three-decade-old dictatorship. As they waved flags and chanted for the fall of the regime, another ruler 1,200 miles to the east was calculating how to use their act of courage for his own profit. On Feb. 4, at the height of the protests in Tahrir Square, Iran's Supreme Leader Ayatollah Ali Khamenei took the stage in Tehran to deliver his assessment of the revolutionary moment unfolding in Cairo. Speaking partly in Arabic, Khamenei described events in Egypt as an 'Islamic awakening' inspired by Iran's own 1979 revolution. The speech was blasted out to thousands of Egyptians via text message, and Khamenei even claimed on his webpage to have personally inspired the pro-democracy demonstrations, comparing them to 'the yell that the Iranian nation let out against America and against global arrogance and tyranny.' Khamenei was not alone in predicting that the Arab Spring would provide Iran an opportunity to expand its influence across the Middle East. Early on, some Washington commentators fretted that he may be right. Writing in Foreign Affairs, for example, Michael Scott Doran, a former official in President George W. Bush's administration, cautioned that the 'resistance bloc' led by Tehran was 'poised to pounce, jackal-like, on the wounded states of the region.' And, in Israel, Prime Minister Benjamin Netanyahu told the Knesset as recently as October that he doubted the 'high hopes that blossomed in the Arab Spring' would be realized, arguing that Iran would manipulate events to expand its influence. But even at the time, Khamenei's assertions fell on deaf ears among the hundreds of thousands risking their lives in Tahrir Square. When asked about Khamenei's boastful claims, one Tahrir protester mocked: 'Egyptians were not inspired by Iran. Rather, the Egyptian people are inspiring the world.' This proved a much more astute observation than the supreme leader's. As Foreign Policy's own Marc Lynch documents in his compelling new book, The Arab Uprising, the 2011 revolts in Egypt and elsewhere were inspired by decades-old grievances against corrupt regimes and the mutually reinforcing demonstration effects of simultaneous movements rising up across the Arab world. Iran had nothing to do with it. The reaction in Tahrir Square represented a sign of things to come. Iran has tried to exploit events, but the winds of political change have not blown in Tehran's favor." http://t.uani.com/zdMDV2

Fariba Nawa in Fox News: "Afghanistan has suffered from foreign meddling since its inception. But while Pakistan's role has been widely discussed -- most Afghans will point to concrete examples -- Iran's involvement is more subtle. Iranian influence is all encompassing--the Islamic government funds Afghan Shiite sects and politicians, has invested in building roads and providing fuel and transport, and is fighting hard against the Afghan opium trade that supplies millions of addicts. But Iran's lasting power on Afghanistan is cultural as well as political, broadcasting state radio and television programs inside Afghanistan. Yet the country's biggest cultural influence is not imposed by the Iranian government. The more than one million repatriating Afghan refugees from Iran - tens of thousands have been deported -bring the dialect, food, music, and clothes particular to Iran. Some of the Afghans repatriates are migrant workers, similar to Mexicans in the U.S., some are construction workers who became addicted to drugs in Iran, others were able to get an education and acquire job skills, and most have lived there for over three decades. Yet Iran will not grant them legal status; they do not have a right to a higher education, to own property, or to work. Most voluntarily return to Afghanistan because there are more opportunities in their home country. These Afghans are changing Afghanistan's identity to be more Iranian - for better or worse... However, Afghan bitterness toward the Iranian government is justifiable. The Islamic Republic backs religious divisions inside Afghanistan, using Afghan Shiites as pawns. Shiite Afghans, who come from other ethnic groups as well, are encouraged to watch Iranian clerics give fiery speeches against Sunni Afghans. Iran built the road from Herat City to its border, one of the finest rebuilt highways, but the signs alongside the road bear Koranic verses picked by Iran's government... I can take pop music and the Iranian Farsi drawl, but Iran's sponsorship of sectarian violence must be stopped -- by the U.S. and other foreign powers invested in Afghanistan -- but mostly, by Afghans themselves who must unite to stand up to their neighbors." http://t.uani.com/xZaILe

Gabe Collins & Andrew Erickson in WSJ: "Europe's decision to embargo Iranian oil exports is strategically sound, since a nuclear-armed Iran is in no one's interest. Yet, policymakers are overlooking how an embargo may strategically reshape the global oil trade in China's favor. Major Chinese oil traders are building businesses that are world class in terms of volumes traded. The latest oil embargo will help them further their ambitions. The first Iranian oil embargo beginning in 1979 effectively handed Marc Rich, whose company ultimately became Glencore (one of the world's largest physical oil and commodities traders), the keys to a multibillion dollar oil-trading kingdom. Now China's increasingly global oil trading companies are in the catbird seat. Chinese firms can be confident that Beijing values stable and secure oil supplies much more than cooperation with the U.S. on the Iranian nuclear issue. The EU sanctions, which will affect about 450,000 barrels per day of oil imports to Europe, will likely engender the transfer of billions of dollars in oil earnings from the Iranian government to China's main oil trading firms: Zhuhai Zhenrong, Unipec, Chinaoil, and Sinochem. These firms have become major players in the global physical crude oil market. In 2010, 3 of the 10 largest global crude oil and products traders hailed from China... Policymakers and investors alike must consider how EU sanctions targeting Iran's nuclear program may well help reshape the physical oil trading world in ways that favor China's rising state-backed oil traders. In today's globalized, economically dynamic, and resource-hungry world, unintended consequences can matter tremendously." http://t.uani.com/zqVKRb

Eye on Iran is a periodic news summary from United Against Nuclear Iran (UANI) a program of the American Coalition Against Nuclear Iran, Inc., a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code. Eye on Iran is not intended as a comprehensive media clips summary but rather a selection of media elements with discreet analysis in a PDA friendly format. For more information please email Press@UnitedAgainstNuclearIran.com

United Against Nuclear Iran (UANI) is a non-partisan, broad-based coalition that is united in a commitment to prevent Iran from fulfilling its ambition to become a regional super-power possessing nuclear weapons. UANI is an issue-based coalition in which each coalition member will have its own interests as well as the collective goal of advancing an Iran free of nuclear weapons.

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