EU Approves Oil Embargo on Iran, Iran promises total closure of Strait of Hormuz

RobitTV

The EU has formally agreed to an Iranian oil embargo - but a senior Iranian official has responded with defiance, saying the country "will definitely" close the Strait of Hormuz.

To protect Europe's economy, struggling with a two-year-old debt crisis, foreign ministers agreed to delay full implementation of the oil embargo until July 1, an EU diplomat said.

That will give countries such as Greece, which rely heavily on Iranian oil, to find alternative sources.

However, Tehran was defiant in the face of the embargo.

"If any disruption happens regarding the sale of Iranian oil, the Strait of Hormuz will definitely be closed," Mohammad Kossari, deputy head of parliament's foreign affairs and national security committee, told Fars news agency.

http://news.sky.com/home/world-news/article/16154438

Let the fun and games begin......:cool:

meglome

I can't see the Iranians actually doing it. Sure they might do some damage to the Americans but I imagine it would be a very one sided event. Leaving the Iranians with lots of egg on their faces. Plus the Americans and Israelis would use it as an excuse to bomb the Iranian nuclear facilities.

wes

Iran oil goes through there as well, so they would only do so as a last resort imho.

Personally, I think this is a foolish decision on the part of the EU. Our economies are in bad shape and this will just raise oil prices, at a time we can ill afford it.

NinjaK

God dam meddling west, so we will have to pay more at the pumps again now because of this Nuclear weapons BS.

0ph0rce0

Do they want oil prices to go up, so the petrol goes up and the more VAT they collect?? Or is it really about weapons

Weylin

ORDER/FILL YOUR KEROSENE / DIESEL HEATING TANKS NOW,COS IF ANYTHING STARTS UP OUT THERE,YOU ARE GOING TO PAY VERY BIG MONEY FOR YOUR TANK FILL :mad:

Godge

wes wrote: »

Iran oil goes through there as well, so they would only do so as a last resort imho.

Personally, I think this is a foolish decision on the part of the EU. Our economies are in bad shape and this will just raise oil prices, at a time we can ill afford it.

The Iranians can let their own shipments to friendly nations through and block all others.

Agree that it is a foolish decision. The prospect of an external shock such as an oil price hike is one that really worries me. We are just about on a sustainable long-term path to recovery but something like this could knock us off.

Cardinal Richelieu

China buys most of Irans oil anyway, this just means China can bargain the price down more, good news for their economy. Well done Europe.

WakeUp

meglome wrote: »

I can't see the Iranians actually doing it. Sure they might do some damage to the Americans but I imagine it would be a very one sided event. Leaving the Iranians with lots of egg on their faces. Plus the Americans and Israelis would use it as an excuse to bomb the Iranian nuclear facilities.

I think an attack will have already taken place by the start of July and I dont think Iran will take the bait by making the first move. Some months ago Ehud Barak stated he believed Iran was 9 months away from having an operational "military" nuclear capacity which brings us to July 2012 in his timeline. The US and Israel have a large scale military exercise planned for May of this year. The US like to start blowing sh1t up and spreading "freedom" - by blowing people up - in the Gulf/ Persian Gulf at the onset of Spring time. Iraq 91 (end of February that year ) and in 03' bombs began to fall in March.
Unless the US and more so Israel succeed in their plan to provoke the Iranians into doing something seen to be aggressive my money is on sometime in June but before July. The Iranian spring arrives later than in Iraq depending on snow melt on its massive mountains sometime around May. Going on previous wars of "freedom" and whats been said by Barak and the planned joint military exercise by both nations I reckon it will start around June unless Iran is provoked. Either way its coming.

RichieC

Iran wanted to sell their juice in Euros, why are we shooting ourselves in the foot?

Pacifist Pigeon

Let's face it. It's the US and her allies who want a war, it's only a matter of time before it happens. The tension will continue to rise and at the end of the day, a mere pin drop in the Strait of Hormuz will spark the inevitable conflict.

irishh_bob

perhaps the eu knows it will need america to bail it out some time soon and is getting on side with the upcoming iran showdown in return , cant see whats in it for europe otherwise

Mr.Micro

RichieC wrote: »

Iran wanted to sell their juice in Euros, why are we shooting ourselves in the foot?

We must all jump to what the US wants. The EU, cringe, just tow the line. Its all theatre and pre text to what is to come IMO, and further of goading Iran to react, so that the always right and mighty can destroy another country.

Jaafa

To my understanding, all shipping entering the Persian gulf goes through Iranian waters. All shipping leaving goes through Omanian waters.

The Iranians I believe have some sort of memorandum of understanding to allow all countries ships (military or civilian), to pass through their waters, so they would be well within their rights to block their half of the strait. I think this is what the the Iranian threat encompasses, I don't think they'd block Omans waters, they wouldn't need too, enough disruption would be created by just blocking their own.

I'm open to correction of course.

_AVALANCHE_

What does China make of all this?

Are they still buying Iran Oil?

If they are, then what purpose does Europe not buying it serve? Other than pushing up our own prices, making a few indiviuals/companys/countries even more filthy rich and of course bowing to American whim.

How capable is Iranian Military if all this is going to kick off this year?



I can't understand how we can be still such a backward race.:(

charlemont

RichieC wrote: »

Iran wanted to sell their juice in Euros, why are we shooting ourselves in the foot?

Because the US pulls the shots in Europe, Well that's now how it seems. The US is really just a bully but silly us (EU) for not standing on our own feet.

irishh_bob

_AVALANCHE_ wrote: »

What does China make of all this?

Are they still buying Iran Oil?

If they are, then what purpose does Europe not buying it serve? Other than pushing up our own prices, making a few indiviuals/companys/countries even more filthy rich and of course bowing to American whim.

How capable is Iranian Military if all this is going to kick off this year?



I can't understand how we can be still such a backward race.:(

iran has a very large army but this wont be a ground war , it will simply involve aerial bombardment of thier nuclear facilitys , israel alone could beat iran in this respect let alone the usa coming along , actually israel might sit this one out , if israel got involved , the whole of the middle east could explode including saudi arabia , this would not suit america , the usa might act as a proxy and carry out the bombing on thier own , any agression by america will be completley at the behest of the israelis though

Overheal

RobitTV wrote: »

To protect Europe's economy, struggling with a two-year-old debt crisis, foreign ministers agreed to delay full implementation of the oil embargo until July 1, an EU diplomat said.

Oh how nice of them to time a huge price hike in consumer fuel just in time for the summer, the time when everyone likes to drive places. #cantmakethisstuffup

Lantus

The next chapter of the "Energy wars"

First we have America, land of the free. Invade a soverign nation that had nothing to do with the 9/11 attacks;namely Iraq. The media had linked Iraq to the attacks (after the gov told them that was the case on day 1 of the attacks.) Propaganda that you generally only read about when children are told about how ruthless our enemies are.

Iraq has loads of oil and the US is now sitting on it all. Iran is the 4th largest for reserves so it makes a good next target. Whats hard to swallow for me is that the rest of the world is buying it all. Why has no one linked this all up, just goes to show who the mainstream media answers to these days.

The straits conflict is good fodder for the US but what they really need is the nuclear piece of the puzzle. This would allow them to enter the country to counter this threat. Once in they could dismantle infrastructure and 'discover' new threats and generally do a lot of damage. Once done american contractors could then save the day and help rebuild once the right contracts are signed for their oil.

Iraw and Iran sit at 4th and 5th on the CIA factbook for known reserves. canada is 3rd and thats already being mined friendly style. North Korea isn't on the list which is why we wont be seeing an american ship sail anywhere near there threatening to stop their nuclear program any time soon.

Jonny7

Lantus wrote: »

Iraq has loads of oil and the US is now sitting on it all.

Production in Iraq has actually fallen, the US has largely left and Chinese companies mainly won the contracts, no US companies.

North Korea isn't on the list which is why we wont be seeing an american ship sail anywhere near there threatening to stop their nuclear program any time soon.

North Korea actually has nuclear weapons.

FreudianSlippers

Slightly old (circa 2003) but it goes a good idea of why there is so much tension:

Lantus

Jonny7 wrote: »

Production in Iraq has actually fallen, the US has largely left and Chinese companies mainly won the contracts, no US companies.

America has build the largest embassy compound around the size of the vatican in iraq which will be staffed by 16,000 people.they are not leaving.....

Jonny7 wrote: »

North Korea actually has nuclear weapons.

suspected but but not confirmed.

Jaafa

Lantus wrote: »

America has build the largest embassy compound around the size of the vatican in iraq which will be staffed by 16,000 people.they are not leaving.....





suspected but but not confirmed.

It very much has been confirmed.

Border-Rat

North Korea bought those weapons. They didn't build them. The very hour Iran is bombed, Khomeni will give the order to buy a nuclear weapon and/or build a crude 'gun-bomb'. Neither is that hard to do. Then the fantasists will get their wish. If Iran is bombed, they will 100% guaranteed have a nuclear weapon within 5 years. Actually, you know what? Khomeni will probably order the production of chemical weaponry, cheaper, easier. All I gotta say is, whichever Country bombs Iran - you deserve it.

RichieC

Overheal wrote: »

Oh how nice of them to time a huge price hike in consumer fuel just in time for the summer, the time when everyone likes to drive places. #cantmakethisstuffup

Well if I was Iran I'd cut the sales now to stop us having time to adjust..

Chuck Stone

Tension in the region is great for the ol' US weapons sales too.

30 Billion to S. Arabia.

11 Billion to Iraq.

JustinDee

Chuck Stone wrote: »

Tension in the region is great for the ol' US weapons sales too.

30 Billion to S. Arabia.

11 Billion to Iraq.

Not exactly something that gets done over a few weeks.

Chuck Stone

JustinDee wrote: »

Not exactly something that gets done over a few weeks.

What?

Einhard

WakeUp wrote: »

Some months ago Ehud Barak stated he believed Iran was 9 months away from having an operational "military" nuclear capacity which brings us to July 2012 in his timeline. The US and Israel have a large scale military exercise planned for May of this year. .

Wasn't that exercise cancelled recently, on foot of Israel refusing to grant the US more than 9 hours notice of a strike on Iran, for fear that Washington would seek to prevent it?

RichieC wrote: »

Iran wanted to sell their juice in Euros, why are we shooting ourselves in the foot?

The principle of the thing perhaps? Somet things more important than oney perhaps? Just hazarding a guess at what the EU might answer.

It's funny though- many of the posters attacking the EU on economic grounds would be the very ones who would otherwise condemn policies based on realpolitik rather than more principled grounds. Amazing how quickly an attitude can change!

It's pretty likely that Iran are after a nuclear weapon. I think most reasonable people would accept this given the evidence, and those who don't are likely refusing to do so on partisan grounds. Now, I don't particularly blame the Iranians for wanting the bomb, and I'm not particularly concerned that they would ever use it, or even threaten to do so. However, I think most people would be of the opinion that the fewer nuclear bombs the better. The EU certainly thinks so, and wants to sanction Iran for pursuing such weaponisation. And the EU is entirely within her rights to so. I would be against a military attack on Iran and her nuclear facilities, but any country is entitled to withdraw economic co-operation and trade from any other, for any circumstances. And in this instance, I fully support the EU's stance.

AlekSmart

RichieC wrote: »

Iran wanted to sell their juice in Euros, why are we shooting ourselves in the foot?

Gorsh....Was'nt this non US$ pricing strategy also a significant element of both,Saddam Hussein and ol'Muammar Gadaffi's stratgies in relation to moving their respective countries economies...but of course,it's most likely that issue had absolutely nothing whatever to do with the screenplay which panned out.

Has Syria aything of value being traded in $'s....;)

Jaafa

Einhard wrote: »

Wasn't that exercise cancelled recently, on foot of Israel refusing to grant the US more than 9 hours notice of a strike on Iran, for fear that Washington would seek to prevent it?



The principle of the thing perhaps? Somet things more important than oney perhaps? Just hazarding a guess at what the EU might answer.

It's funny though- many of the posters attacking the EU on economic grounds would be the very ones who would otherwise condemn policies based on realpolitik rather than more principled grounds. Amazing how quickly an attitude can change!

It's pretty likely that Iran are after a nuclear weapon. I think most reasonable people would accept this given the evidence, and those who don't are likely refusing to do so on partisan grounds. Now, I don't particularly blame the Iranians for wanting the bomb, and I'm not particularly concerned that they would ever use it, or even threaten to do so. However, I think most people would be of the opinion that the fewer nuclear bombs the better. The EU certainly thinks so, and wants to sanction Iran for pursuing such weaponisation. And the EU is entirely within her rights to so. I would be against a military attack on Iran and her nuclear facilities, but any country is entitled to withdraw economic co-operation and trade from any other, for any circumstances. And in this instance, I fully support the EU's stance.

Whatever the reasons for the EU's decision it's certainly not to pressure Iran on it's nuclear program.

Do you understand what the effect of these sanctions have been and will be?

Basically the drop in oil output causes the price in oil to increase temporarily, thus increasing the prices for everyone else Iran sells to, and thereby offsetting a lot of the losses in the short term. i.e not much less money for the Iranian government.

Also in the short term Iran's currency plummets 71% against the dollar, dramatically increasing the cost of living for ordinary Iranians and probably sending many further in poverty and increasing their hate of the west (as all Iranian's, regardless of their liking for the government, support their nuclear program)

In the long term, oil prices will stabilize, but China and India with their ever increasing need for oil will pick up the spare oil the EU left behind and negotiate a nice price for it too, seeing as they know Iran can't sell it elsewhere.The US won't get anything from this either, India has just announced it will now pay Iran in gold instead of dollars, China will probably follow suit.

And so Iran will get by, almost 30 years of sanctions now and its been doing fine all things considered.

Meanwhile the EU with it's crippled economies, some teetering at the edge, have to go begging to Saudi Arabia for extra oil in the summer, and pay a nice premium for the privilege too.

Support the EU's stance at your own risk, it's a costly game of showmanship.

Jonny7

Jaafa wrote: »

Whatever the reasons for the EU's decision it's certainly not to pressure Iran on it's nuclear program.

Whats the real reason?

India has just announced it will now pay Iran in gold instead of dollars, China will probably follow suit.

I'd wait for an official announcement, so far its a Fars/PressTV/RT story.

Jaafa

Whats the real reason?

I couldn't tell you. Possible it's an attempt to stir up social unrest in Iran and kick off the green revolution again, sure beats invading the place. But that's just speculation on my part. The given reason is clearly false though.

I'd wait for an official announcement, so far its a Fars/PressTV/RT story.

Meh, I don't see what they'd gain from lying, they've probably just jumped the gun a bit. Also it's possible India won't make any big annoucnment about it, so as to not make it seem like they're blantantly trying to piss off the US.

Jonny7

Jaafa wrote: »

The given reason is clearly false though.

How is the given reason clearly false?

Meh, I don't see what they'd gain from lying, they've probably just jumped the gun a bit. Also it's possible India won't make any big annoucnment about it, so as to not make it seem like they're blantantly trying to piss off the US.

Maybe its true, maybe its not. I wouldn't be basing any grand theories on it just yet

Jaafa

Jonny7 wrote: »

Jaafa wrote: »

The given reason is clearly false though.

How is the given reason clearly false?



Maybe its true, maybe its not. I wouldn't be basing any grand theories on it just yet

I've already explained above why it wont work, it took me maybe 20-30 minutes to research this, I'm assuming EU leaders know the same. Then again maybe they plan on following it up with something more substantial.

Jonny7

Jaafa wrote: »

I've already explained above why it wont work, it took me maybe 20-30 minutes to research this, I'm assuming EU leaders know the same. Then again maybe they plan on following it up with something more substantial.

China (20% of Iranian oil exports) and according to various sources has cut down on oil from Iran (on the surface still a lot of rhetoric against US sanctions) apparently relying more on other OPEC producers.

South Korea and Japan (combined about 25% of Iran oil exports) are being persuaded, with varying results, to scale back

Europe (20%) is going to completely disappear in 6 months.

The key factor here are Gulf producers - who can scale up production, esp. Saudi who've basically guaranteed it.

Iran is going to have to undercut the Gulf producers to keep clients like India, and that's not taking into the account the pressure that the US and the EU can put on India to buy elsewhere.

I have no idea how Iran is going to play this, but its definitely putting the squeeze on them. I still haven't made my mind up on these EU sanctions, but they are far from simplistic - they could be the game-changer for this whole situation.

Could bring Iran to the table (IAEA inspectors due end of this month) or it could make Iran do something dramatic.

Cardinal Richelieu

Jonny7 wrote: »

China (20% of Iranian oil exports) and according to various sources has cut down on oil from Iran (on the surface still a lot of rhetoric against US sanctions) apparently relying more on other OPEC producers.

South Korea and Japan (combined about 25% of Iran oil exports) are being persuaded, with varying results, to scale back

Europe (20%) is going to completely disappear in 6 months.

The key factor here are Gulf producers - who can scale up production, esp. Saudi who've basically guaranteed it.

Iran is going to have to undercut the Gulf producers to keep clients like India, and that's not taking into the account the pressure that the US and the EU can put on India to buy elsewhere.

I have no idea how Iran is going to play this, but its definitely putting the squeeze on them. I still haven't made my mind up on these EU sanctions, but they are far from simplistic - they could be the game-changer for this whole situation.

Could bring Iran to the table (IAEA inspectors due end of this month) or it could make Iran do something dramatic.

Of that 20%, Greece, Italy and Spain are the largest importers of Iranian oil and enjoy a very good commercial rate from Iran at present. So in 6 months the EU will be depriving 3 of the Euro Zone weakest economies of a cheap source of Oil and forcing them into a higher price market:(, not to forget the extra cost of refitting the refineries to handle oil from other countries.

Chuck Stone

For a non Atlantacist perspective i.e. most of the rest of the world (that isn't up to it's neck in debt) I would recommend this read.

http://www.tomdispatch.com/post/175490/tomgram%3A_pepe_escobar%2C_sinking_the_petrodollar_in_the_persian_gulf/

The Myth of ''Isolated'' Iran

Following the Money in the Iran Crisis
By Pepe Escobar

Let's start with red lines. Here it is, Washington’s ultimate red line, straight from the lion’s mouth. Only last week Secretary of Defense Leon Panetta said of the Iranians, “Are they trying to develop a nuclear weapon? No. But we know that they're trying to develop a nuclear capability. And that's what concerns us. And our red line to Iran is do not develop a nuclear weapon. That's a red line for us.”

How strange, the way those red lines continue to retreat. Once upon a time, the red line for Washington was “enrichment” of uranium. Now, it’s evidently an actual nuclear weapon that can be brandished. Keep in mind that, since 2005, Iranian Supreme Leader Ayatollah Khamenei has stressed that his country is not seeking to build a nuclear weapon. The most recent National Intelligence Estimate on Iran from the U.S. Intelligence Community has similarly stressed that Iran is not, in fact, developing a nuclear weapon (as opposed to the breakout capacity to build one someday).

What if, however, there is no “red line,” but something completely different? Call it the petrodollar line.

Banking on Sanctions?

Let’s start here: In December 2011, impervious to dire consequences for the global economy, the U.S. Congress -- under all the usual pressures from the Israel lobby (not that it needs them) -- foisted a mandatory sanctions package on the Obama administration (100 to 0 in the Senate and with only 12 “no” votes in the House). Starting in June, the U.S. will have to sanction any third-country banks and companies dealing with Iran’s Central Bank, which is meant to cripple that country’s oil sales. (Congress did allow for some “exemptions.”)

The ultimate target? Regime change -- what else? -- in Tehran. The proverbial anonymous U.S. official admitted as much in the Washington Post, and that paper printed the comment. (“The goal of the U.S. and other sanctions against Iran is regime collapse, a senior U.S. intelligence official said, offering the clearest indication yet that the Obama administration is at least as intent on unseating Iran’s government as it is on engaging with it.”) But oops! The newspaper then had to revise the passage to eliminate that embarrassingly on-target quote. Undoubtedly, this “red line” came too close to the truth for comfort.

Former chairman of the Joint Chiefs of Staff Admiral Mike Mullen believed that only a monster shock-and-awe-style event, totally humiliating the leadership in Tehran, would lead to genuine regime change -- and he was hardly alone. Advocates of actions ranging from air strikes to invasion (whether by the U.S., Israel, or some combination of the two) have been legion in neocon Washington. (See, for instance, the Brookings Institution’s 2009 report Which Path to Persia.)

Yet anyone remotely familiar with Iran knows that such an attack would rally the population behind Khamenei and the Revolutionary Guards. In those circumstances, the deep aversion of many Iranians to the military dictatorship of the mullahtariat would matter little.

Besides, even the Iranian opposition supports a peaceful nuclear program. It’s a matter of national pride.

Iranian intellectuals, far more familiar with Persian smoke and mirrors than ideologues in Washington, totally debunk any war scenarios. They stress that the Tehran regime, adept in the arts of Persian shadow play, has no intention of provoking an attack that could lead to its obliteration. On their part, whether correctly or not, Tehran strategists assume that Washington will prove unable to launch yet one more war in the Greater Middle East, especially one that could lead to staggering collateral damage for the world economy.

In the meantime, Washington’s expectations that a harsh sanctions regime might make the Iranians give ground, if not go down, may prove to be a chimera. Washington spin has been focused on the supposedly disastrous mega-devaluation of the Iranian currency, the rial, in the face of the new sanctions. Unfortunately for the fans of Iranian economic collapse, Professor Djavad Salehi-Isfahani has laid out in elaborate detail the long-term nature of this process, which Iranian economists have more than welcomed. After all, it will boost Iran’s non-oil exports and help local industry in competition with cheap Chinese imports. In sum: a devalued rial stands a reasonable chance of actually reducing unemployment in Iran.


More Connected Than Google

Though few in the U.S. have noticed, Iran is not exactly “isolated,” though Washington might wish it. Pakistani Prime Minister Yusuf Gilani has become a frequent flyer to Tehran. And he’s a Johnny-come-lately compared to Russia’s national security chief Nikolai Patrushev, who only recently warned the Israelis not to push the U.S. to attack Iran. Add in as well U.S. ally and Afghan President Hamid Karzai. At a Loya Jirga (grand council) in late 2011, in front of 2,000 tribal leaders, he stressed that Kabul was planning to get even closer to Tehran.

On that crucial Eurasian chessboard, Pipelineistan, the Iran-Pakistan (IP) natural gas pipeline -- much to Washington’s distress -- is now a go. Pakistan badly needs energy and its leadership has clearly decided that it’s unwilling to wait forever and a day for Washington’s eternal pet project -- the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline -- to traverse Talibanistan.

Even Turkish Foreign Minister Ahmet Davutoglu recently visited Tehran, though his country’s relationship with Iran has grown ever edgier. After all, energy overrules threats in the region. NATO member Turkey is already involved in covert ops in Syria, allied with hardcore fundamentalist Sunnis in Iraq, and -- in a remarkable volte-face in the wake of the Arab Spring(s) -- has traded in an Ankara-Tehran-Damascus axis for an Ankara-Riyadh-Doha one. It is even planning on hosting components of Washington’s long-planned missile defense system, targeted at Iran.

All this from a country with a Davutoglu-coined foreign policy of “zero problems with our neighbors.” Still, the needs of Pipelineistan do set the heart racing. Turkey is desperate for access to Iran’s energy resources, and if Iranian natural gas ever reaches Western Europe -- something the Europeans are desperately eager for -- Turkey will be the privileged transit country. Turkey’s leaders have already signaled their rejection of further U.S. sanctions against Iranian oil.

And speaking of connections, last week there was that spectacular diplomatic coup de théâtre, Iranian President Mahmoud Ahmadinejad’s Latin American tour. U.S. right-wingers may harp on a Tehran-Caracas axis of evil -- supposedly promoting “terror” across Latin America as a springboard for future attacks on the northern superpower -- but back in real life, another kind of truth lurks. All these years later, Washington is still unable to digest the idea that it has lost control over, or even influence in, those two regional powers over which it once exercised unmitigated imperial hegemony.

Add to this the wall of mistrust that has only solidified since the 1979 Islamic revolution in Iran. Mix in a new, mostly sovereign Latin America pushing for integration not only via leftwing governments in Venezuela, Bolivia, and Ecuador but through regional powers Brazil and Argentina. Stir and you get photo ops like Ahmadinejad and Venezuelan President Hugo Chavez saluting Nicaraguan President Daniel Ortega.

Washington continues to push a vision of a world from which Iran has been radically disconnected. State Department spokesperson Victoria Nuland is typical in saying recently, “Iran can remain in international isolation.” As it happens, though, she needs to get her facts straight.

“Isolated” Iran has $4 billion in joint projects with Venezuela including, crucially, a bank (as with Ecuador, it has dozens of planned projects from building power plants to, once again, banking). That has led the Israel-first crowd in Washington to vociferously demand that sanctions be slapped on Venezuela. Only problem: how would the U.S. pay for its crucial Venezuelan oil imports then?

Much was made in the U.S. press of the fact that Ahmadinejad did not visit Brazil on this jaunt through Latin America, but diplomatically Tehran and Brasilia remain in sync. When it comes to the nuclear dossier in particular, Brazil’s history leaves its leaders sympathetic. After all, that country developed -- and then dropped -- a nuclear weapons program. In May 2010, Brazil and Turkey brokered a uranium-swap agreement for Iran that might have cleared the decks on the U.S.-Iranian nuclear imbroglio. It was, however, immediately sabotaged by Washington. A key member of the BRICS, the club of top emerging economies, Brasilia is completely opposed to the U.S. sanctions/embargo strategy.

So Iran may be “isolated” from the United States and Western Europe, but from the BRICS to NAM (the 120 member countries of the Non-Aligned Movement), it has the majority of the global South on its side. And then, of course, there are those staunch Washington allies, Japan and South Korea, now pleading for exemptions from the coming boycott/embargo of Iran’s Central Bank.

No wonder, because these unilateral U.S. sanctions are also aimed at Asia. After all, China, India, Japan, and South Korea, together, buy no less than 62% of Iran’s oil exports.

With trademark Asian politesse, Japan’s Finance Minister Jun Azumi let Treasury Secretary Timothy Geithner know just what a problem Washington is creating for Tokyo, which relies on Iran for 10% of its oil needs. It is pledging to at least modestly “reduce” that share “as soon as possible” in order to get a Washington exemption from those sanctions, but don’t hold your breath. South Korea has already announced that it will buy 10% of its oil needs from Iran in 2012.


Silk Road Redux

Most important of all, “isolated” Iran happens to be a supreme matter of national security for China, which has already rejected the latest Washington sanctions without a blink. Westerners seem to forget that the Middle Kingdom and Persia have been doing business for almost two millennia. (Does “Silk Road” ring a bell?)

The Chinese have already clinched a juicy deal for the development of Iran’s largest oil field, Yadavaran. There’s also the matter of the delivery of Caspian Sea oil from Iran through a pipeline stretching from Kazakhstan to Western China. In fact, Iran already supplies no less than 15% of China’s oil and natural gas. It is now more crucial to China, energy-wise, than the House of Saud is to the U.S., which imports 11% of its oil from Saudi Arabia.

In fact, China may be the true winner from Washington’s new sanctions, because it is likely to get its oil and gas at a lower price as the Iranians grow ever more dependent on the China market. At this moment, in fact, the two countries are in the middle of a complex negotiation on the pricing of Iranian oil, and the Chinese have actually been ratcheting up the pressure by slightly cutting back on energy purchases. But all this should be concluded by March, at least two months before the latest round of U.S. sanctions go into effect, according to experts in Beijing. In the end, the Chinese will certainly buy much more Iranian gas than oil, but Iran will still remain its third biggest oil supplier, right after Saudi Arabia and Angola.

As for other effects of the new sanctions on China, don’t count on them. Chinese businesses in Iran are building cars, fiber optics networks, and expanding the Tehran subway. Two-way trade is at $30 billion now and expected to hit $50 billion in 2015. Chinese businesses will find a way around the banking problems the new sanctions impose.

Russia is, of course, another key supporter of “isolated” Iran. It has opposed stronger sanctions either via the U.N. or through the Washington-approved package that targets Iran’s Central Bank. In fact, it favors a rollback of the existing U.N. sanctions and has also been at work on an alternative plan that could, at least theoretically, lead to a face-saving nuclear deal for everyone.

On the nuclear front, Tehran has expressed a willingness to compromise with Washington along the lines of the plan Brazil and Turkey suggested and Washington deep-sixed in 2010. Since it is now so much clearer that, for Washington -- certainly for Congress -- the nuclear issue is secondary to regime change, any new negotiations are bound to prove excruciatingly painful.

This is especially true now that the leaders of the European Union have managed to remove themselves from a future negotiating table by shooting themselves in their Ferragamo-clad feet. In typical fashion, they have meekly followed Washington’s lead in implementing an Iranian oil embargo. As a senior EU official told National Iranian American Council President Trita Parsi, and as EU diplomats have assured me in no uncertain terms, they fear this might prove to be the last step short of outright war.

Meanwhile, a team of International Atomic Energy Agency inspectors has just visited Iran. The IAEA is supervising all things nuclear in Iran, including its new uranium-enrichment plant at Fordow, near the holy city of Qom, with full production starting in June. The IAEA is positive: no bomb-making is involved. Nonetheless, Washington (and the Israelis) continue to act as though it’s only a matter of time -- and not much of it at that.


Follow the Money

That Iranian isolation theme only gets weaker when one learns that the country is dumping the dollar in its trade with Russia for rials and rubles -- a similar move to ones already made in its trade with China and Japan. As for India, an economic powerhouse in the neighborhood, its leaders also refuse to stop buying Iranian oil, a trade that, in the long run, is similarly unlikely to be conducted in dollars. India is already using the yuan with China, as Russia and China have been trading in rubles and yuan for more than a year, as Japan and China are promoting direct trading in yen and yuan. As for Iran and China, all new trade and joint investments will be settled in yuan and rial.

Translation, if any was needed: in the near future, with the Europeans out of the mix, virtually none of Iran’s oil will be traded in dollars.

Moreover, three BRICS members (Russia, India, and China) allied with Iran are major holders (and producers) of gold. Their complex trade ties won’t be affected by the whims of a U.S. Congress. In fact, when the developing world looks at the profound crisis in the Atlanticist West, what they see is massive U.S. debt, the Fed printing money as if there’s no tomorrow, lots of “quantitative easing,” and of course the Eurozone shaking to its very foundations.

Follow the money. Leave aside, for the moment, the new sanctions on Iran’s Central Bank that will go into effect months from now, ignore Iranian threats to close the Strait of Hormuz (especially unlikely given that it’s the main way Iran gets its own oil to market), and perhaps one key reason the crisis in the Persian Gulf is mounting involves this move to torpedo the petrodollar as the all-purpose currency of exchange.

It’s been spearheaded by Iran and it’s bound to translate into an anxious Washington, facing down not only a regional power, but its major strategic competitors China and Russia. No wonder all those carriers are heading for the Persian Gulf right now, though it’s the strangest of showdowns -- a case of military power being deployed against economic power.

In this context, it’s worth remembering that in September 2000 Saddam Hussein abandoned the petrodollar as the currency of payment for Iraq’s oil, and moved to the euro. In March 2003, Iraq was invaded and the inevitable regime change occurred. Libya’s Muammar Gaddafi proposed a gold dinar both as Africa’s common currency and as the currency of payment for his country’s energy resources. Another intervention and another regime change followed.

Washington/NATO/Tel Aviv, however, offers a different narrative. Iran’s “threats” are at the heart of the present crisis, even if these are, in fact, that country’s reaction to non-stop US/Israeli covert war and now, of course, economic war as well. It’s those “threats,” so the story goes, that are leading to rising oil prices and so fueling the current recession, rather than Wall Street’s casino capitalism or massive U.S. and European debts. The cream of the 1% has nothing against high oil prices, not as long as Iran’s around to be the fall guy for popular anger.

As energy expert Michael Klare pointed out recently, we are now in a new geo-energy era certain to be extremely turbulent in the Persian Gulf and elsewhere. But consider 2012 the start-up year as well for a possibly massive defection from the dollar as the global currency of choice. As perception is indeed reality, imagine the real world -- mostly the global South -- doing the necessary math and, little by little, beginning to do business in their own currencies and investing ever less of any surplus in U.S. Treasury bonds.

Of course, the U.S. can always count on the Gulf Cooperation Council (GCC) -- Saudi Arabia, Qatar, Oman, Bahrain, Kuwait and the United Arab Emirates -- which I prefer to call the Gulf Counterrevolution Club (just look at their performances during the Arab Spring). For all practical geopolitical purposes, the Gulf monarchies are a U.S. satrapy. Their decades-old promise to use only the petrodollar translates into them being an appendage of Pentagon power projection across the Middle East. Centcom, after all, is based in Qatar; the U.S. Fifth Fleet is stationed in Bahrain. In fact, in the immensely energy-wealthy lands that we could label Greater Pipelineistan -- and that the Pentagon used to call "the arc of instability" -- extending through Iran all the way to Central Asia, the GCC remains key to a dwindling sense of U.S. hegemony.

If this were an economic rewrite of Edgar Allan Poe’s story, “The Pit and the Pendulum,” Iran would be but one cog in an infernal machine slowly shredding the dollar as the world’s reserve currency. Still, it’s the cog that Washington is now focused on. They have regime change on the brain. All that’s needed is a spark to start the fire (in -- one hastens to add -- all sorts of directions that are bound to catch Washington off guard).

Remember Operation Northwoods, that 1962 plan drafted by the Joint Chiefs of Staff to stage terror operations in the U.S. and blame them on Fidel Castro’s Cuba. (President Kennedy shot the idea down.) Or recall the Gulf of Tonkin incident in 1964, used by President Lyndon Johnson as a justification for widening the Vietnam War. The U.S. accused North Vietnamese torpedo boats of unprovoked attacks on U.S. ships. Later, it became clear that one of the attacks had never even happened and the president had lied about it.

It’s not at all far-fetched to imagine hardcore Full-Spectrum-Dominance practitioners inside the Pentagon riding a false-flag incident in the Persian Gulf to an attack on Iran (or simply using it to pressure Tehran into a fatal miscalculation). Consider as well the new U.S. military strategy just unveiled by President Obama in which the focus of Washington’s attention is to move from two failed ground wars in the Greater Middle East to the Pacific (and so to China). Iran happens to be right in the middle, in Southwest Asia, with all that oil heading toward an energy-hungry modern Middle Kingdom over waters guarded by the U.S. Navy.

So yes, this larger-than-life psychodrama we call “Iran” may turn out to be as much about China and the U.S. dollar as it is about the politics of the Persian Gulf or Iran’s nonexistent bomb. The question is: What rough beast, its hour come round at last, slouches towards Beijing to be born?

JustinDee

Ffs, a simple link will do. I'm using a phone to browse and it takes ages to scroll through all that.

Jonny7

Cardinal Richelieu wrote: »

Of that 20%, Greece, Italy and Spain are the largest importers of Iranian oil and enjoy a very good commercial rate from Iran at present. So in 6 months the EU will be depriving 3 of the Euro Zone weakest economies of a cheap source of Oil and forcing them into a higher price market:(, not to forget the extra cost of refitting the refineries to handle oil from other countries.

All this will have been foreseen, otherwise would not have gone ahead.

I'd expect the gulf producers to ratchet up supply, new contracts signed, etc.

Jonny7

Chuck Stone wrote: »

For a non Atlantacist perspective i.e. most of the rest of the world (that isn't up to it's neck in debt) I would recommend this read.

The Myth of ''Isolated'' Iran

Following the Money in the Iran Crisis
By Pepe Escobar

Pepe is a doom-monger, not an objective one either. A constant feature on Russian propaganda stations (for obvious reasons) and is generally full of garbage (to put it mildly)

Take his words with a pinch of salt, or a mountain.

Chuck Stone

Jonny7 wrote: »

Pepe is a doom-monger, not an objective one either. A constant feature on Russian propaganda stations (for obvious reasons) and is generally full of garbage (to put it mildly)

Doom monger? I thought it was a fairly positive piece. Escobar comes from Brazil and writes mostly for the Asia Times, appears on the Real News Network. He has written extensively on oil politics and references his work thoroughly.

Regardless, you seem to be quick to dismiss articles that don't subscribe to the Washington Consensus so I'm not sure how serious your critiques of non-aligned journos should be taken.

If you have a problem with what he has written critique it. Your ad-hominem against Escobar is intellectually lazy to be frank.

Jaafa

Jonny7 wrote: »

China (20% of Iranian oil exports) and according to various sources has cut down on oil from Iran (on the surface still a lot of rhetoric against US sanctions) apparently relying more on other OPEC producers.

South Korea and Japan (combined about 25% of Iran oil exports) are being persuaded, with varying results, to scale back

Europe (20%) is going to completely disappear in 6 months.

The key factor here are Gulf producers - who can scale up production, esp. Saudi who've basically guaranteed it.

Iran is going to have to undercut the Gulf producers to keep clients like India, and that's not taking into the account the pressure that the US and the EU can put on India to buy elsewhere.

I have no idea how Iran is going to play this, but its definitely putting the squeeze on them. I still haven't made my mind up on these EU sanctions, but they are far from simplistic - they could be the game-changer for this whole situation.

Could bring Iran to the table (IAEA inspectors due end of this month) or it could make Iran do something dramatic.

I dont know where your getting your info from Jonny but I suggest you find a new source. China has point blank refused to cut down on Iranian oil, and as I said will be actually buying more now thanks to the cheaper rate they will receive because of the sanctions. http://www.businessweek.com/news/2012-01-23/china-gets-cheaper-iran-oil-as-u-s-pays-tab-for-hormuz-patrols.html

South Korea and Japan seem to want the cut down their dependency on Iranian oil, but they were planning on doing that anyway long before this started

Thirdly Iran has been intensively trying to increase it's capacity the produce more barrels per day, this suggests to me they have no shortage of buyers, and of course fits the global trend of countries (mainly the rapidly developing ones) buying more oil in years to come.

Sure in the short term this will cause Iran a few logistics problems, as it will take time to sort out new deals, but within a year I except their profits from oil to return to the same levels pre-sanction, if not increase.

The only loser here is the average Iranian on the street and the average European who will pay extra for their new deals with saudi.

simit

That's just what we need, another price hike at the pumps.

Chuck Stone

JustinDee wrote: »

Ffs, a simple link will do. I'm using a phone to browse and it takes ages to scroll through all that.

How I posted is how we're advised to by mods if memory serves.

Maybe a Mod can clarify this because I couldn't see it in the politics charter.

Jonny7

Chuck Stone wrote: »

Doom monger? I thought it was a fairly positive piece. Escobar comes from Brazil and writes mostly for the Asia Times, appears on the Real News Network. He has written extensively on oil politics and references his work thoroughly.

Regardless, you seem to be quick to dismiss articles that who don't subscribe to the Washington consensus so I'm not sure how serious your critiques of non-aligned journos should be taken.

If you have a problem with what he has written critique it. Your ad-hominem against Escobar is intellectually lazy to be frank.

I am well aware of the guy, he's a doom-monger.

http://www.youtube.com/results?search_query=pepe+escobar
http://www.youtube.com/user/TheAlexJonesChannel
http://www.voltairenet.org/_Pepe-Escobar_?lang=en

He's not taken seriously for a reason. If you start posting "articles" by Bill O'Reilly or Glen Beck I'll be pointing out the same thing.

Chuck Stone

Jonny7 wrote: »

I am well aware of the guy, he's a doom-monger.
He's not taken seriously for a reason.

Maybe you missed this part of my post...

Chuck Stone wrote: »

You seem to be quick to dismiss articles that don't subscribe to the Washington Consensus so I'm not sure how serious your critiques of non-aligned journos should be taken.

If you have a problem with what he has written critique it. Your ad-hominem against Escobar is intellectually lazy to be frank.

WakeUp

Einhard wrote: »

Wasn't that exercise cancelled recently, on foot of Israel refusing to grant the US more than 9 hours notice of a strike on Iran, for fear that Washington would seek to prevent it?

It has been postponed until the second half of 2012 but has not be cancelled outright. US build up of troops in Kuwait remain, two infantry brigades and a helicopter unit along with the carrier groups and their strike forces in the region. All the tools are in place. Was this exercise a double play? To quietly build up and station forces there on the pretext of an exercise? Or perhaps the US behind the scenes have finally realised they are being played and manipulated by the Israelis and have decided to say no, for the time being. Im not sure but the hardware is in place. For the past ten years Kuwait has served as a base and station post for supplies and troops heading to Iraq.
The official line is that they have postponed it for "diplomatic and regional issues" but I've also read reports about what you have said above in so much as the US have put it off for a while to send a message to the Israelis I would be more inclined to believe that myself although it is quite astounding that they postponed it after moving the majority of the pieces into place.

Jonny7

Chuck Stone wrote: »

Maybe you missed this part of my post...

All I am doing is pointing out, to those who don't know, that this guy is as biased as they come, I've struggled in the past to find one single article he's ever done that doesn't in some way involve trying to warn the world of how the US is.

I'm not going to pore over several thousand word article with multiple Iranian sources that can't be substantiated just because someone has been "intellectually lazy" enough to dump it in the middle of a debate, but cheers for the offer

Chuck Stone

Jonny7 wrote: »

I'm not going to pore over several thousand word article with multiple Iranian sources that can't be substantiated just because someone has been "intellectually lazy" enough to dump it in the middle of a debate, but cheers for the offer

It would be fairly easy for you to pick your perceived errors and 'doom-mongering' out of the article - but not quite as easy as trying to discredit the author - the lazy option.

You've attempted, poorly, to discredit the author so I think your opinion on his work should be taken fwiw i.e. a trashy ad-Hominem of little value.

Jonny7

Chuck Stone wrote: »

You've attempted, poorly, to discredit the author so I think your opinion on his work should be taken fwiw i.e. a trashy ad-Hominem of little value.

Relax, that's your opinion. I've read plenty Pepe's articles and watched his interviews because they are a common feature on various CT forums. My links are there, people can make up their minds whether he is objective or not.