Eye on Iran: Falling Oil Prices Put Iran over U.S. Sanctions Barrel

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Reuters: „For most of this year, the threat of tough U.S. sanctions on Iran, the world’s third-largest oil exporter, helped push crude oil prices higher and higher, adding a menacing headwind for struggling global economies. But in the past few weeks, a combination of higher output from Iran’s rival Saudi Arabia and economic troubles in China and Europe have pushed oil prices down 25 percent, putting the threat of sanctions back squarely on Iran. As June 28 approaches – the day the law allows U.S. President Barack Obama to enforce sanctions on countries that do oil deals with Iran’s central bank – Washington is revving up efforts to tighten the squeeze on Tehran. Lawmakers in Congress hope to finalize in July a new package of sanctions aimed at further crippling Iran’s oil revenues after international talks in Moscow last week failed to convince Tehran to scale back its nuclear program.“ http://t.uani.com/N1YkMa 

WSJ: „Iranians protesting soaring food prices launched a spontaneous three-day boycott of milk and bread purchases, in a sign that growing economic hardship could lead to more civil disobedience. The grass-roots campaign, which ran from Saturday through Monday, wasn’t affiliated with any opposition group. Dozens of Iranians said in interviews and on social-networking sites and blogs that they had participated in the boycott, and a number of bakeries and grocery stores across Tehran, the capital, reported declines in milk and bread sales of as much as 90%. Iran’s economy has been deteriorating amid domestic mismanagement, corruption and international sanctions that have made it difficult for manufacturers to import raw material and to conduct banking transactions. A European Union embargo on Iranian oil is set to start July 1. Prices of basic goods rise almost daily. Independent economists estimate annual inflation is hovering between 50% and 60%. In the past two weeks, the price of bread has increased 33%, chicken 28.5% and milk prices are climbing daily, according to Iranian newspapers and semiofficial news websites.“ http://t.uani.com/N211xd

NYT: „Iran’s vice president delivered a baldly anti-Semitic speech on Tuesday at an international antidrug conference here, saying that the Talmud, a central text of Judaism, was responsible for the spread of illegal drugs around the world. European diplomats in attendance expressed shock. Even Iranian participants in the conference, co-sponsored by Iran and the United Nations, privately wondered at their government’s motive for allowing such a speech, even given its longstanding antagonism toward Israel… Mr. Rahimi, second in line to President Mahmoud Ahmadinejad, said the Talmud teaches to ‚destroy everyone who opposes the Jews.‘ The ‚Zionists‘ are in firm control of the illegal drug trade, Mr. Rahimi said, asking foreign dignitaries to research his claims. ‚Zionists‘ is Iran’s ideological term for Jews who support the state of Israel. ‚The Islamic Republic of Iran will pay for anybody who can research and find one single Zionist who is an addict,‘ Mr. Rahmini said. ‚They do not exist. This is the proof of their involvement in drugs trade.'“ http://t.uani.com/MvLfOg

MTN Action Alert

Nuclear Program  & Sanctions

 

Reuters: „Iran acknowledged for the first time on Wednesday that its oil exports have fallen sharply, down 20-30 percent from normal volumes of 2.2 million barrels daily. A National Iranian Oil Company official in Moscow denied exports had been hit by sanctions against Iran’s nuclear program, saying that oilfields were under maintenance and crude production was being diverted for refining. But the admission that exports have fallen substantially is a change of tack from Tehran which until now has denied that the U.S. and European measures have had much or any impact. ‚It was 20 to 30 percent we reduce regarding to our export,‘ NIOC official Mohammad Ali Emadi said in English. ‚Some part of the reduction is shifting for the refinery internally.‘ … Emadi said Iran’s normal crude exports were 2.2 million bpd, in line with external estimates. A 20-30 percent fall would put Iranian exports at 1.54-1.76 million bpd, off 440-660,000 bpd.“http://t.uani.com/Qjbl8s

Reuters: „Lawmakers from the U.S. House of Representatives and Senate are working to finalize a new package of sanctions aimed at further reducing oil and other revenues used by Iran to further its nuclear program. The new measures build on penalties for foreign banks that handle transactions for Iranian oil, sanctions that were signed into law by President Barack Obama in December. Tehran has insisted its nuclear activities are for civilian purposes, but U.S. lawmakers want to prevent Iran from building a nuclear bomb. The new package is designed to further tighten sanctions. The House passed its version last December, and the Senate added a number of measures in its bill, passed last month. The House version of the bill combined existing Iran sanctions laws into one, made more sanctions mandatory, and made it harder for the administration to grant waivers for sanctions. The Senate version gives the administration more discretion in how to apply sanctions, but also added a number of measures. Here is a summary of key provisions and some of the remaining issues that may be considered.“http://t.uani.com/Lsneob

CNN: „Iran threatened Wednesday to halt all imports of goods from South Korea in response to Seoul’s announcement a day earlier that it would stop accepting Iranian oil. South Korea said Tuesday that it would suspend all Iranian oil imports from the start of July in response to a European Union insurance ban on tankers carrying crude from Iran. The Iranian ambassador to South Korea, Ahmad Masumifar, responded by saying in an interview with the South Korean news agency Yonhap on Wednesday that Tehran ‚may decide to fully stop importing Korean goods.'“ http://t.uani.com/NMLmGU

Reuters: „Iran, which faces tightening sanctions on its oil industry aimed at halting development of its nuclear programme, is looking to export more gas to India and Pakistan to make up for a fall in crude exports, a National Iranian Oil Company official said. ‚We are trying to compensate (for) the less (oil) export,‘ NIOC’s managing director for research and technology, Mohammad Ali Emadi told reporters at a Moscow conference on Wednesday. ‚We are in negotiation with Pakistan and India to increase export of natural gas.'“ http://t.uani.com/MB0pAi

NJJN: „The state Assembly scheduled a vote on an Iran sanctions bill for June 28, postponing action on a bill that passed in the Senate on June 25. Leaders of the state’s Jewish community and allies gathered in the Statehouse in Trenton Monday hoping to celebrate the legislation, which would prevent companies doing business in New Jersey from contracting with Iran’s finance or energy sectors. The state Senate unanimously passed the measure that morning. However, the Assembly put off its evening vote on the measure until later in the week, citing scheduling issues… It would make New Jersey the sixth state after New York, Florida, California, Indiana, and Maryland to enact such legislation. However, New Jersey would become the first state to bring its sanction threshold in line with lower federal limits expected to be in effect by the end of the summer. Legislation requiring President Barack Obama to sanction companies that make an ‚investment‘ in Iran of more than $5 million (reduced from $20 million) has already passed the House and Senate and is now in conference before being sent to Obama.“ http://t.uani.com/KMzO6x

Opinion & Analysis

Shahrzad Elghanayan in LAT: „Imagine where the U.S. economy would be today if John Jacob Astor, Cornelius Vanderbilt, Andrew Carnegie or any of the magnates who helped turn America into an industrialized society had been gunned down by a revolutionary firing squad. In 1979, that is what happened in Iran to my grandfather, Habib Elghanian, Iran’s most prominent Jewish industrialist and philanthropist. My grandfather’s execution was not only a personal loss but a turning point for Iran. His execution and the subsequent fleeing of businessmen from Iran contributed to derailing the country’s chances of building a modern, diversified, export-based economy, and foreshadowed Iran’s neglect of its most valuable resource: its people. Since the revolution in 1979, a new generation of Iranians has been left to foot the hefty losses caused by the Islamic Republic’s hostility to independent businessmen, its fixation on oil, uranium and nuclear power and its cantankerous rhetoric against Israel. In the months after Ayatollah Ruhollah Khomeini’s return to Iran on Feb. 1, 1979, about 200 former high-ranking members of the shah’s security forces, military and government were killed, many charged with ‚association with the shah’s regime.‘ That May, my grandfather was the first businessman to be executed. During a show trial that lasted no longer than 20 minutes, he was falsely charged with being a ‚Zionist spy‘ and a ‚corrupter on Earth.‘ Newspaper stories and editorials around the world, including in the Los Angeles Times, carried the news of the execution of ‚Iran’s plastics king.‘ My grandfather’s crime, according to the prosecutor, was making financial contributions to Israel and meeting with Israeli politicians when they came to Iran or when he traveled to Israel – as was customary for leaders of the Jewish diaspora. He was the leader of Iran’s 80,000 to 100,000 Jews in the 1960s and 1970s when Iran and Israel enjoyed peaceful, if not always cordial, relations under the shah. Not mentioned was how hard he had worked to form partnerships with Muslim and Armenian businessmen, how he had rehabilitated hospitals – including one in which injured revolutionaries were treated – and had funded charities to help poor schoolchildren and the elderly. It didn’t matter that even as members of the elite were fleeing the country with their money, my grandfather had returned to Iran from a brief visit to the U.S. and Israel in November 1978. ‚I have done nothing wrong; I’m going home,‘ he said. The prosecutor instead focused on his contributions to Israel and concluded that made him ‚a friend of God’s foes and a foe of God’s friends.'“ http://t.uani.com/MWzRrV

Garrett Nada in the Iran Primer: „After struggling for decades to combat narcotics, Iran is today both fighting and facilitating narcotics, according to reports by the United Nations, the United States and Iran. Tehran has escalated its campaign against narcotics use and trafficking with help from the United Nations. At the same time, however, an elite Revolutionary Guards force has reportedly allowed traffickers to smuggle drugs through Iran in exchange for helping Tehran arm Taliban forces fighting NATO troops in Afghanistan. In 2012, the United States sanctioned a senior Revolutionary Guard commander for facilitating drug smuggling that also aided an extremist group. The Islamic Republic now openly admits having a drug problem that it denied for years. ‚For a long time nobody wanted to admit it, but drug abuse was ravaging our society…Now the scourge is so bad that we are finally reaching the point where the government is getting really involved,‘ Abbas Deylamizade, managing director of Rebirth, told The Toronto Globe and Mail in May 2012. Rebirth is Iran’s largest non-governmental organization working on drug treatment. Since the 1979 revolution, Iran claims to have lost some 3,720 security forces fighting drug traffickers, many of whom were heavily armed. Tehran estimates that it spends around $1 billion annually on its war on drugs. In 2009, Iran accounted for 89 percent of worldwide opium seizures and 41 percent of heroin seizures, according to the 2011 U.N. World Drug Report. But in 2012, the United States revealed inconsistencies in Iran’s public narrative. The U.S. Department of the Treasury imposed sanctions in March on General Gholamreza Baghbani, a commander in the Revolutionary Guards‘ Qods Force (IRGC-QF). The Qods Force is the elite military wing charged with overseeing foreign operations. Baghbani allegedly allowed narcotics traffickers to smuggle opiates from Afghanistan through Iran in exchange for their assistance in delivering weapons across the border to the Taliban in Afghanistan. NATO officials claim the Iranian weapons have been used repeatedly against NATO forces.“http://t.uani.com/LoUX1E

Barbara Slavin in Al-Monitor: „Iraq’s once-battered oil sector is further eclipsing production in Iran, relieving pressure on world oil markets and facilitating the imposition of draconian new sanctions on Iran. A day after the European Union confirmed that its oil embargo on Iran would go into effect as scheduled on July 1, a spokesman for Iraqi Deputy Prime Minister for Energy Affairs Hussain al-Shahristani told Bloomberg news Tuesday (June 26) that Iraq’s output in June was more than 3.07 million barrels a day, just shy of Iran’s 3.1 million barrels. Iraq predicts production of 3.4 million barrels a day by the end of the year. Despite bureaucratic hurdles in Iraq and the continued absence of a national oil law, the challenges there to production and exports pale in comparison to Iran’s situation. Unlike in Iran, international oil companies are actively renovating Iraqi fields neglected during long years of war and sanctions against Iraq. In Iran, however, outside investment is drying up and customers are fleeing. On Tuesday, South Korea announced that it was also ending imports of Iranian crude effective July 1. Battered by sanctions directed against the country’s nuclear program, Iranian oil exports have plummeted this year from 2.5 million barrels a day to between 1.2 million and 1.8 million barrels. However, the price of oil has also been dropping lately to under $80 a barrel primarily due to the weakness of European economies and a slowdown in China’s frenetic growth. Guy Caruso, an energy expert at the Center for Strategic and International Studies, said Tuesday that the combination of increasing Iraqi and Saudi production is sufficient to satisfy Iran’s former European and other customers for now. Speaking at the Johns Hopkins University School of Advanced International Studies, Caruso noted that the Barack Obama administration has provided waivers from US sanctions to seven countries to continue to buy some Iranian oil because they have complied with new US legislation requiring significant reductions in petroleum imports from Iran. China, however, has yet to receive a waiver.“ http://t.uani.com/QjlfHe

Korea Times Editorial Board: „Economic ripples are expected to be felt keenly as Iran threatened to halt all imports from South Korea in protest against Seoul’s decision to ban Iranian oil under sanctions imposed by the European Union. Iranian Ambassador to Seoul Ahmad Masumifar said in an interview with Yonhap News Agency Wednesday that his country ‚may decide to fully stop importing Korean goods‘ if Seoul slaps the import ban on Iranian oil. The warning comes as South Korea will be forced to halt oil imports from Iran due to the EU’s ban on insurance of oil tankers transporting Iranian oil from July 1 as part of sanctions on Iran after it has resisted international pressure to give up its nuclear development program. Earlier, we urged the government to make an all-out effort to tackle the anticipated fallout from the suspension of Iran oil imports but little has been done so far. It may be belated but the government should do what it can to minimize the impact. It’s a comfort to hear that there would be little problem in securing crude thanks to efforts to date to diversify oil import sources. It’s also fortunate that crude prices remain stable in the aftermath of the eurozone debt crisis. Most worrisome are small- and medium-sized companies that would take a direct hit. According to the Ministry of Knowledge Economy, about 2,900 Korean companies engage in trade with Iran and 2,700 of them are SMEs. They usually receive payments for merchandise exports from the money Tehran earns from selling oil to Korean refiners under a unique settlement system. Now the money barely amounts to 1.8 trillion won and SMES can’t get paid if oil imports from Iran are halted. Korea’s shipments to Iran amounted to $6 billion last year. The situation becomes all the more serious should the Iranian envoy’s threat translate into action. The government says it will help SMES diversify to export to other countries but it won’t be easy to look for new markets in such a short span of time. Instead, they urge the government to expand soft loans.“ http://t.uani.com/LOB0Cp

Veröffentlicht am 27. Juni 2012 in Gesetze, Medien, Meinungen, Politik und mit , , , , , , , , , , getaggt. Setze ein Lesezeichen auf den Permalink. Ein Kommentar.

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