Iran: A Strike Against Oil Embargo – OpEd

By Konstantin Garibov

Iran will sell its oil to new consumers, said the country’s Oil Ministry spokesperson Alireza Nikzad. Iran has stopped oil supplies to France and Britain. Markets have reacted by a surge in shares.

Neither France, nor Britain is among the main importers of Iranian oil. Moreover, the British companies terminated contacts with Iran several months ago.

About 70 percent of European oil imports are consumed by Greece, Italy and Spain. At the end of last week, the Iranian Press TV Television Channel reported that there would be no more oil deliveries to these countries, and also to France, Portugal and the Netherlands. The Iranian Oil Ministry denied the reports. France, however, has been denied imports. Apparently, Tehran finds the volume of oil supplies to France too insignificant. As it happens, Iran has abandoned its plans to deal a preemptive blow at EU energy interests in the wake of the Union’s decision to stop importing oil from Iran by July 1st .

Iran is hoping to find new buyers in Asia. Asia is currently importing four fifths of the total amount of oil produced by Iran. Iran’s major consumers in Asia are China, India, Turkey, Japan and South Korea. The first three have no intention of terminating the supplies. Moreover, China, India and Turkey might choose to ramp up oil imports if Iranian oil supplies are in surplus forcing the seller to bring the price down. This will reduce the economic effect of the oil embargo which was introduced by the EU under pressure from the US, analyst Stanislav Tararsov says.

“Sanctions just don’t work. They will work only if the entire world community joins them. But this is hardly an option given that Turkey is continuing to satisfy 40% of its oil demands thanks to oil imports from Iran. And China goes on clinching trade deals with Iran, including in the oil sector.”

Sanctions mean to strip Iran of the possibility of paying in dollars and euros. Now, Iran has gone into talks with foreign suppliers on the possibility of paying in national currencies. Tehran will now buy grain and vegetable oil for rubles and Indian rupees and will sell oil for yuans.

The oil embargo has also run into obstacles from Japan and South Korea whose energy security interests have turned out to be more important than solidarity with Washington.

A group of IAEA experts arrived in Tehran on February 20th with a view to facilitate a solution to the nuclear issue surrounding Iran. The IAEA experts will be allowed to visit all nuclear facilities, including those that trigger a particular concern of the international community and are listed as primary targets by the US and Israel. Shortly before the arrival of the IAEA experts, Chairman of the US Joint Chiefs of Staff Martin Dempsey said that it was too premature to strike against Iran’s nuclear facilities now. In its turn, China warned Israel, the most ardent proponent of a military solution for Iran, against such a step.