Iran can survive for years without selling oil, Iranian President Mahmoud Ahmadinejad claimed Tuesday, according to Fars news. “Even if we didn’t sell oil for two to three years, the country would manage easily,” he said.
The European Union is planning to ban Iranian oil in an attempt to pressure Ahmadinejad to drop the country’s nuclear program.
US President Barack Obama this week gave his two allies, the Turkish Prime Minister Tayyip Erdogan and Israel’s Binyamin Netanyahu, a lesson in the politics of expediency, when Tuesday, March 20, Secretary of State Hillary Clinton announced exemptions for 11 nations from new US financial sanctions against countries that don’t reduce the Iranian oil purchases by June 28.
Above all, Ankara is deeply engrossed in an effort to have the new Iranian and Iraqi pipelines to Europe routed through Turkey, reducing the Strait of Hormuz’s crucial importance as a primary route for the world’s oil supplies. This pipeline would also hurt Saudi Arabia and the other Gulf oil producers, all of whom are dead set against Erdogan’s hegemonic aspirations in the Middle East.
Third-world economies have no bottom, therefore sanctions are unlikely to be as hard hitting as most believe. There will always be another customer for oil.
Iran is the third-largest exporter of crude oil in the world, behind Saudi Arabia and Russia. Its economy relies heavily on oil exports. Recent Western sanctions have targeted Iran’s oil industry in hopes of pressuring Tehran to address international concerns about its nuclear program.
However, the effect of the sanctions could be limited if Iran’s top customers keep buying oil, or even increase their imports. According to tallies from June 2011, here are the top 5 importers of Iranian oil:
China is scouring the world for alternative oil supplies to replace a fall in its imports from Iran, as it seeks to negotiate lower prices from Tehran, and has been drawing heavily on Saudi Arabia.
Industry sources told Reuters that Beijing had bought the bulk of an increase in crude oil supplies from top oil exporter Saudi Arabia in the last few months.
The world’s second-largest oil consumer is also importing more cargoes from West Africa, Russia and Australia to replace reduced supplies from Iran.
China is the top buyer of Iranian oil, taking around 20 percent of its total exports, but since January it has cut purchases by around 285,000 barrels per day (bpd), or just over half of the total daily amount it imported in 2011.
Russia is also who will precisely benefit from an actual war on Iran. Not only through weapons and technology sales in the prelude to war, but through the oil and gas trade. Thus, it is also in Russia’s interests to escalate tensions with their middle east proxies against the west.
(Reuters) – As the European Union prepares to ban Iranian oil and the United States turns the screw on payments, oil executives and policymakers say China and Russia stand to gain the most and Western oil firms and consumers may emerge the biggest losers.
Iran will continue to sell much the same volume of oil – 2.6 million barrels per day or around 3 percent of world supply – but almost all of it will flow to China, they reason. And being pretty much Iran’s only remaining customer, Beijing will be able to negotiate a much reduced price.
The EU will ban Iranian oil from July. The United States plans sanctions on Iran’s central bank and possibly its shipping firm. European headquartered oil firms such as France’s Total and Royal Dutch Shell have already abandoned Iranian oil purchases or are in the process of doing so.
TEHRAN, Iran (AP) — Iran’s parliament will begin debating a draft bill requiring the government to immediately halt oil exports to Europe, a prominent lawmaker said Wednesday, as Tehran weighs its options following the European Union’s decision to stop importing oil from the country.
The EU embargo, announced on Monday, was the latest attempt to try to pressure Iran over a nuclear program the United States and its allies argue is aimed at developing nuclear weapons but which Iran says is for purely peaceful purposes. It came just weeks after the U.S. approved, but has yet to enact, new sanctions targeting Iran’s Central Bank and, by extension, its ability to sell its oil.
Many Iranian lawmakers and officials have called for an immediate ban on oil exports to the European bloc before its ban fully goes into effect in July, arguing that the 27 EU nations account for only about 18 percent of Iran’s overall oil sales and would be hurt more by the decision than Iran. China, a key buyer of Iranian crude, has blasted the embargo.
With the looming EU embargo against Iranian oil, the Islamic Republic has responded. Turn up the middle eastern threats escalations another notch.
Tensions in the Gulf could reach a breaking point as a senior Iranian official said Iran would “definitely” close the Strait of Hormuz if an EU oil embargo disrupted the export of crude oil.
Mohammad Kossari, deputy head of parliament’s foreign affairs and national security committee, issued the warning in respone to a decision by the European Union on Monday to impose an oil embargo on Iran over the country’s alleged nuclear weapons program.
“The pressure of sanctions is designed to try and make sure that Iran takes seriously our request to come to the table,” EU foreign policy chief Catherine Ashton said.
However, with Washington’s decision to deploy a second carrier strike group in the Gulf, the EU’s attempt to pressure Iran economically could greatly increase the likelihood of all-out war in the region.
The Strait of Hormuz is the vital link between the Persian Gulf and the Gulf of Oman.
It is also one of the most strategic chokepoints in the world when it comes to oil transit.
As pointed out previously, countries are moving away from the dollar being used as a means of trading for oil and this is but an extension. Look for this trend to continue increasing as Iran becomes more hostile and other countries become more weary of US debt.
India is the first buyer of Iranian oil to agree to pay for its purchases in gold instead of the US dollar, DEBKAfile’s intelligence and Iranian sources report exclusively. Those sources expect China to follow suit. India and China take about one million barrels per day, or 40 percent of Iran’s total exports of 2.5 million bpd. Both are superpowers in terms of gold assets.
By trading in gold, New Delhi and Beijing enable Tehran to bypass the upcoming freeze on its central bank’s assets and the oil embargo which the European Union’s foreign ministers agreed to impose Monday, Jan. 23. The EU currently buys around 20 percent of Iran’s oil exports.
The vast sums involved in these transactions are expected, furthermore, to boost the price of gold and depress the value of the dollar on world markets.