EU oil sanctions imposed against Iran
In a small item of good news, the European Union has decided to impose an embargo on Iranian oil imports in its effort to deter Iran from pursuing its nuclear ambitions.
The European Union formally adopted an oil embargo Monday against Iran and a freeze of the assets of the country’s central bank, part of sanctions meant to pressure the country to resume talks on its nuclear program.
Prime Minister Benjamin Netanyahu said in response, “It’s a step in the right direction. The sanctions must be tested according to the results. As of yet Iran continues to manufacture nuclear weapons uninterrupted.”
Diplomats said the measures, which were adopted in Brussels by the EU’s 27 foreign ministers, include an immediate embargo on new contracts for crude oil and petroleum products, while existing contracts will be allowed to run until July.
EU diplomats are calling the measure part of a twin track approach toward Iran: increase sanctions to discourage what they suspect is Iran’s pursuit of nuclear weapons but emphasize at the same time the international community’s willingness to talk. Iran says its nuclear program is exclusively for peaceful purposes.
British Foreign Secretary William Hague called the embargo part of “an unprecedented set of sanctions.”
Obviously, the sanctions won’t bite as hard because they will be staggered in order to accommodate countries with faltering economies such as Greece, who have oil contracts already in place with Iran.
Also expected are bans on the sale of gold, diamonds and other precious metals to Iran and any delivery of newly minted coins and notes….
The EU imported some 600,000 barrels of Iranian oil per day in the first 10 months last year, making it a key market alongside India and China, which has refused to bow to pressure from Washington to dry up Iran’s oil revenues.
Greece’s dependency on Iranian oil, however, has been holding up a deal on the timing and conditions of the oil embargo.
The financially-strapped nation, which relies on Iranian oil for more than a third of its oil imports, had concluded “good financial arrangements” with Iran including 60-day payment and no financial guarantees, EU sources said.
The bloc therefore has been seeking new suppliers able to match the easy conditions offered by Tehran to Greece. Contacts are underway with Saudi Arabia and hopes are high that Libya can soon increase its production.
“Greece has agreed on a political level to stop its imports from Iran, the question is, who can compensate,” said a diplomat speaking on condition of anonymity. “It will be more difficult to find alternative suppliers because of the present financial situation of Greece.”
However, it appears that Iran’s economy is in a shambles because of the sanctions already in place:
US-led sanctions have devastated the Iranian economy, AFP quoted US President Barack Obama as saying Friday. “[Sanctions] have been so effective that even the Iranians have had to acknowledge that their economy is in shambles.”
…
Speaking at a Jewish community fundraising event in New York, Obama said: “when I came into office, Iran was united and the world was divided. And now what we have is a united international community that is saying to Iran, you’ve got to change your ways.” He added that the US has “been able to organize folks like China and Russia that previously would have never gone along with something like this,” AFP reported.
He said that the US had organized “unprecedented” sanctions, the goal of which were to announce “unequivocally that we’re not going to tolerate a nuclear weapon in the hands of this Iranian regime.”
President Obama’s words were disputed (of course) by Iran although they were confirmed by US negotiator William Burns:
“The sanctions had no effect on the economy,” Mottaki told a news conference in Bahrain on the sidelines of a major conference on Middle East security that was launched by US Secretary of State Hillary Clinton.
…
William Burns, the top US negotiator for the so-called P5+1 talks with Iran, said the sanctions were “sharply” isolating Iran from the global financial system.
“Iran may be losing as much as 50 to 60 billion dollars in potential energy investments, along with the critical technology and know-how that comes with them,” he added on Wednesday.
With this in mind, we can perhaps begin to hope that this next step will push Iran to abandon its nuclear plans. (I’m not holding my breath though).
Greece ( and Italy ) dependence on Iranian oil would make their economies more faltering in case of full embargo and considering EU economies interdipendency it easy to imagine the consequences on stronger economies. Libya production is slowly increasing but not at sufficient level to meet South Europe demand. This ( among other considerations ) prevent EU from taking strong measures against Iran, as reported in the article. It is curious that governments of these two faltering countries ( Greece and Italy ) has become more Israeli oriented over the years in spite of their dependency from oil.
It is indeed interesting that Italy and especially Greece have become more pro-Israel. I think they have taken into account that they can buy oil from Saudi Arabia and other countries, so their dependency on Iran may not be as severe as we imagine. And they probably reckon that it’s better to be on the side of a stable Western democracy rather than on the side of the Mad Mullahs for reasons of international diplomacy (relations with the very powerful America) and security.