Updated below. Update 2 below: Wed., 25 Jan.
I do not like referencing my own work; however, in this case it is the easiest way to direct you to links from outside sources which I have used in previous articles.
The European Union has just announced that it will embargo Iranian oil as a means of getting Iran to stop doing what it is not doing. [see: http://teri.nicedriving.org/2011/11/on-iran-and-a-small-video-of-sirte-libya/ and a link from another previous article: http://goo.gl/mJG2E ] The embargo goes into effect immediately on new oil contracts with Iran; already existing contracts will have to be phased out by 1 July. Other targets for sanctions may include a number of Iranian companies, individuals and financial institutions. The US has already sanctioned Iran’s Central Bank (to take effect within 60 days), as part of the NDAA recently signed by Obama. [see: http://teri.nicedriving.org/2011/12/diplomacy-and-other-strong-arm-tactics/ ]
Greece, driven into debt and suffering under drastic austerity measures (“So long, and thanks for all the fish” – Goldman, Sachs to Greece) reportedly asked for a 12-month stay. It turns out that within the EU, there are three countries most likely to suffer from any increased oil prices and economic fallout from the sanctions: Italy, Spain and Greece, which account for up to 68 per cent of Iranian oil consumed in Europe. Greece and Italy recently had new leaders foisted on them – unwillingly and without elections – in both cases, the new prime ministers are bankers. [see: http://teri.nicedriving.org/2011/11/replacements/ ] I think it is safe to assume that the EU is not particularly concerned with the effects of the embargo on Italy, Spain and Greece.
The EU embargo, combined with the US sanctions, will remove roughly 2 million barrels of oil from the markets each day. China is the biggest buyer of Iranian oil and has not agreed to any sanctions; China may decide to take up the oil now banned by the west, which would obviously help alleviate the financial pressure felt by Iran. The other Asian countries are under pressure from the US and the EU to join in the embargo, but so far are also refusing.
Oil prices are already rising because of these actions. This is due to the speculators in the markets. Commodities speculators used to be heavily regulated to prevent them from unfairly affecting prices on necessary goods, such as oil. They have been deregulated. (‘High oil prices are driven by speculators in the markets. We need to do something about them.’ – Barack Obama, campaign remark, 2008. ‘Oh, I don’t think we can say that speculators have any impact on oil prices’ – Barack Obama, upon entering the White House.) The impact from the US sanctions was immediate. [see: http://teri.nicedriving.org/2012/01/lets-get-the-story-straight/ ] Increased fuel costs will adversely affect the western economies which are under pressure and in decline from bad financial decisions ongoing since 2008. But never let it be said that we passed on a perfectly good opportunity to shoot ourselves in the foot.
Update: According to the Israeli-based news website, DEBKAfile, India and possibly China are making arrangements to trade in gold for Iran’s oil. Every article I have read concerning this so far refers back to the Debka exclusive. [See: http://www.debka.com/article/21673/ ]
This story is most likely accurate; as I have mentioned several times, Iran set up trading on the Tehran bourse earlier last year with the explicit purpose of trading off the dollar. This will obviously depress the value of the dollar and enhance the price of gold.
Turkey, Russia, India, and China have not agreed to any sanctions or embargos against Iran. Japan and South Korea are discussing the matter with the US, but are reluctant to join in the embargo as they depend rather heavily on Iranian oil.
In articles I was reading yesterday, I kept seeing remarks quoted from “US officials” about Iran needing to engage in talk. We say that as Iran keeps saying that they want diplomatic talks. This is reminiscent of the situation in Libya – we kept insisting Ghaddafi talk and negotiate while at the same time, we refused each of his attempts to negotiate. Yet, we are the ones whose first approach to Iran over the issue of possible nuclear enrichment has been to sanction them. Our second approach has been to threaten them by surrounding them by land and sea. Our third approach has been to get the EU to embargo Iranian oil. We are not doing any “talking”, as near as I can see. We cut off diplomatic ties with Iran in 1980 and have never re-engaged. Sanctions and embargos (economic warfare) are our idea of diplomacy.
I think now is a good time to mention again the Shanghai Cooperative Organisation (the SCO). This is a group of countries which have formed a union (somewhat like NATO in the west) to cooperate on security, military, and economic matters. The member countries are China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan. Observer states are India, Iran, Mongolia, and Pakistan. (The US applied for observer status in ’06 and was denied.) Dialogue partners are Belarus and Sri Lanka. Guest Attendances are Turmenistan, the ASEAN (Assoc. of SE Asian Nations: Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Burma, Cambodia, Laos, and Vietnam), and the CIS (Commonwealth of Independent States: former Soviet Republics).
“Its six full members account for 60% of the land mass of Eurasia and its population is a quarter of the world’s. With observer states included, its affiliates account for half of the human race.” – http://en.wikipedia.org/wiki/Shanghai_Cooperation_Organisation
If the neocons (and the neoliberals like Obama) desire World War 3, they are setting up a situation where it may mean half the globe’s population against the other half. This is all due to seeking domination of the world’s resources. It is unnecessary. It is insane. Yet it has been the intention of people like Cheney, Rumsfeld and the Pentagon for decades. Obama is simply going with their blueprint.
We are being led into oblivion by the mad. Why we are following is a whole other question.
Update 2: Wed, 25 Jan.
Looks like someone thought about how the sanctions might bring some hardship to the EU as well as Iran. To prevent some European countries from having to depend on Russia to make up the energy deficiency caused by the sanctions, the UK wants BP’s natural gas operations to be exempted from the sanctions. To this end, the UK, the EU, and BP sent lobbyists to Washington to influence lawmakers here. According to the Wall Street Journal:
“British and European Union officials have convinced some U.S. lawmakers to ensure that any new sanctions against Iran exempt a BP PLC-led natural-gas project, as Western governments try to isolate Tehran without harming their own energy security.
“The $20 billion project in the Caspian Sea off Azerbaijan is seen as key to alleviating Europe’s dependence on Russia as its largest supplier of natural gas.
” ‘There is broad-based consensus in the House and Senate that our sanctions policy should impose maximum economic pain on the Iranians without allowing Russia to hold Eastern Europe hostage for energy supplies,’ said a congressional aide familiar with the European lobbying effort….
“The Shah Deniz II project could have been hit by a bill by Rep. Ileana Ros-Lehtinen (R., Fla.) that would ban any company doing business with Iran’s oil and gas sector from operating in the U.S. But the current version of the legislation includes language that says it won’t affect efforts ‘to bring gas from Azerbaijan to Europe and Turkey,’ or to achieve ‘energy security and independence from Russia.’
“The Ros-Lehtinen bill is now with the Senate’s committee on foreign affairs….
“A BP spokesman said recent discussions on Shah Deniz II were part of the U.K.-based company’s ‘routine engagement’ with U.S. lawmakers…. ”
Rep. Ileana Ros-Lehtinen (R-FL), is the Chairman of the House Foreign Affairs Committee. The bill in question, which would exempt BP, is HR 1905, the Iran Threat Reduction Act. This was introduced on 5/13/2011 (they have been thinking about the Iranian sanctions a long time – the sanctions did not spontaneously pop up in the NDAA). The bill was approved [in Dec.] by the House by a vote of 410-11. Per the House press summary: “It strengthens, updates and replaces previous Iran sanctions laws to ensure that current law vigorously addresses the multiple threats posed by Iran. The bill closes loopholes in energy and financial sanctions, including by targeting the Central Bank of Iran. The bill also targets the Iranian Revolutionary Guards Corps and senior Iranian regime officials.” The bill is now in the hands of the Senate foreign relations committee, being readied for introduction to the Senate.
“Ros-Lehtinen is also the author of H.R. 2105, the Iran, North Korea, and Syria Nonproliferation Reform and Modernization Act, which was approved by the House by a vote of 418-2. The bill expands sanctions on those assisting Iran, North Korea, and Syria in the development of their weapons programs, including their nuclear programs.” – House press summary. See, they are working on that pesky Syria problem, too.
I did not know anything about Ros-Lehtinen. Turns out she is a Cuban-American. Interesting that she is so aggressive about threatening, sanctioning, embargo-ing, and otherwise disrupting and punishing countries that have not directly threatened the US. Perhaps she does not know anything about her own cultural heritage. She is, however, very aggressive and very angry at various foreign countries and would like to see certain of them “taken out”. (Or perhaps she does know her cultural heritage; it’s just that she sees Cuba’s economic woes as being entirely the fault of Castro rather than having anything at all to do with over 50 years of embargos and sanctions against Cuba by the US. According to her wiki entry: she “supports continued sanctions against Cuba. She also supported the de facto government in Honduras, headed by Roberto Micheletti, that emerged after the military coup against President Manuel Zelaya. She has said of the decision to invade Iraq: “Whether or not there is a direct link to the World Trade Center does not mean that Iraq is not meritorious of shedding blood. The common link is that they hate America.”)
One might hope (in vain) that the head of the House Foreign Affairs Committee would be even-tempered and just a little, well, diplomatic. But considering that our Top Diplomat is the now completely deranged Hillary we-came-we-saw-he-died Clinton, it should not be surprising to see that Ros-Lehtinen issued this public statement to Obama on 19 January. Our “diplomats” and other officials in charge of handling foreign affairs are insane. Clinical psychopaths. As I said, we are being led into oblivion by the mad. Why we are following is a whole other question. (Bear in mind please, while you read her statement, that she is talking here about Iran; a country that has not started any war in hundreds of years, a country that is not developing nuclear weapons, and that has allowed nuclear inspectors to do their jobs with more frequency than any other country. A country that has been the target of internally disruptive, covert CIA operations for decades, has had its scientific computers taken down by the US and Israel, its scientists assassinated, and which is the current target of economic warfare waged on it by the US and the EU – all to make them stop doing what they are not doing.)
U.S. Rep. Ileana Ros-Lehtinen (R-FL), Chairman of the House Foreign Affairs Committee, commented today on reports that the President proposed new direct negotiations with Iran in a letter to Iran’s “Supreme Leader.” Statement by Ros-Lehtinen:
“I hope that reports the Administration is seeking new ‘engagement’ with the Iranian regime are false. Now is the time to clamp down on the regime through sanctions that close every loophole and deny Tehran any breathing room. The Administration must not fall into the regime’s trap and again pursue the failed policy of dialogue and engagement.
“The Iranian regime is only capable of negotiating in bad-faith, which it is happy to do in order to buy even more time for its nuclear efforts. We can’t afford to fall into this obvious trap yet again.
“The clock is running out to stop Iran from achieving a breakout nuclear capability. Sanctions are having an impact. Negotiations will undermine the prospects for stopping Iran, as the only result will be more time for Iran’s centrifuges to spin. The Administration needs to step up the pressure by imposing all the sanctions in U.S. law without further delay if we hope to stop Iran’s nuclear pursuits from moving forward.”