Global Security Newswire

Delegates from the European Union's 27 member nations on Thursday launched negotiations on implementing an anticipated embargo on Iranian petroleum, the Associated Press reported (see GSN, Jan. 5).

European Union governments have agreed in principle to cut off imports of Iranian oil as part of efforts to target the Middle Eastern nation's nuclear activities, which Western powers suspect are aimed at establishing a nuclear-weapon capacity. Tehran has insisted its atomic efforts are purely nonmilitary in nature.

Representatives from EU nations were discussing the planned restrictions on Thursday in Brussels, Belgium, but the talks were not anticipated to immediately yield a deal. One EU insider on Thursday said full consensus on the matter is not foreseen this month (Don Melvin, Associated Press/Time, Jan. 5).

Iran's top diplomat on Thursday said the nation was "not concerned" over the impending embargo, Agence France-Presse reported.

“Iran has always been ready to counter such hostile actions and we are not concerned at all about the sanctions,” Foreign Minister Ali Akbar Salehi said.

“We have taken provisional measures. We have weathered the storm for the past 32 years and we will be able to survive this as well,” Salehi said.

Iranian Economy Minister Seyyed Shamseddin Hosseini said international penalties comprised "an economic war against us,” the Islamic Republic News Agency reported (Agence France-Presse I/Khaleej Times, Jan. 5).

The Obama administration on Thursday pressed nations that buy unrefined petroleum from Iran to end ties with the Persian Gulf state and rely on a wider array of exporters, Kyodo News reported.

"It is important for countries around the world to look hard at their dependence on Iranian oil and to do what they can to diversify and to cut their ties," U.S. State Department spokeswoman Victoria Nuland said.

"We are talking to China, we're talking to other countries around the world about the importance of strengthening sanctions against Iran, which we think is important for all of us as we try to bring Iran back into compliance with its international obligations and truly ready to demonstrate the peaceful intent of its program," Nuland said.

Becoming independent of Iranian petroleum could require a difficult, drawn-out effort, "but it's important because this sector is a lifeline for the regime that is pursuing policies that are dangerous to all of us," she said (Kyodo News/Mainichi Daily News, Jan. 5).

The degree to which sanctions would affect Iranian petroleum operations remains unclear, the Wall Street Journal on Thursday quoted analysts as saying.

"We could see anywhere between a 5 percent and 30 percent decrease in Iranian oil revenue this year, depending on whether the EU enacts an embargo and how aggressively U.S. sanctions are applied," said Trevor Houser, an expert with the Rhodium Group financial consultancy in New York.

Foundation for Defense of Democracies head Mark Dubowitz in an analysis said Iranian petroleum income would decline by 7.8 percent to 8.5 percent if European nations were the sole participants in a new unrefined oil embargo. Between 37.7 percent and 41.5 percent of Iran's oil income would disappear if all countries but China supported such an effort, he said (Benoit Faucon, Wall Street Journal, Jan. 5).

European Union governments were discussing a "grace period" of between one month and one year before closing present business arrangements with Iran, Reuters on Friday quoted envoys as saying. Greece -- a significant importer of Iranian unrefined petroleum -- has sought the greatest delay, while a deferment of no more than three months has been advocated by France, Germany, the Netherlands and the United Kingdom, according to the diplomatic officials.

"There is a range of ideas from one month to one year with countries who are more dependent on Iranian oil pushing for more time," one EU envoy said (Justyna Pawlak, Reuters I, Jan. 6).

Separately, Japan was considering potential replacement petroleum sources in light of planned Iran penalties, AFP quoted government sources as saying on Friday. Japanese Foreign Minister Koichiro Gemba is expected to address the matter during an eight-day tour of Qatar, Saudi Arabia, Turkey and the United Arab Emirates that began on Thursday .

JX Nippon Oil & Energy would respond to potential restrictions by "switching to imports from other Middle East countries and other regions including West Africa," a company insider told AFP.

"We are talking with Saudi Arabia and other oil producing countries about measures in the event of a problem arising in Iranian supplies," the source said. "But we cannot give you details on what we are discussing."

Yasushi Kimura, the firm's president, said previously: "Saudi Arabia has ability to produce more and I think we can make do if we have months to spare."

"We have sounded out Saudi Arabia on what can be done" in the event of an embargo, Kimura said. "If we don't have time to spare, we may discuss the release of state (oil) reserves" (Agence France-Presse II/Energy-daily.com, Jan. 6).

Saudi Arabia is prepared to meet any additional petroleum demand resulting from a ban on purchases from Iran, one Saudi official said in remarks reported by Reuters on Thursday (Robin Pomeroy, Reuters II, Jan. 5).

Center for Strategic and International Studies analyst Fariborz Ghadar noted a major decline in transfers of Iranian petroleum to China over the past two months, CNN reported.

"We know the Chinese aren't using any less oil," the expert said. "So someone must have stepped in."

Saudi Arabia is the most probable alternate supplier, as it wields the necessary additional infrastructure to fully supplant Iran's daily oil output, according to CNN. In addition, Riyadh has an icy relationship with Tehran.

"There's not going to be much of an impact if the Saudis and others are willing to jack up production," Ghadar added (Steve Hargreaves, CNN, Jan. 5).

Some specialists, though, said increasing signals of the effect of economic penalties could raise new obstacles in efforts to defuse the nuclear standoff, Reuters reported on Thursday.

"The West needs a flexible and imaginative approach to enable the Iranians eventually to climb down," former British Ambassador to Iran Richard Dalton said.

University of Notre Dame expert George Lopez said Iran has been handled as "an outcast regime" in light of new U.S. penalties against the nation's central bank.

"The U.S. is moving from essentially nonproliferation sanctions to condemnation of the system," he said. "Here's the danger: sanctions are meant to be a tool to accomplish a set of policy outcomes. But within the U.S. we have diverse constituencies which disagree about what they want the outcome to actually be."

"If we allow the kind of macho-ism with the military in the Gulf to get in the way here we may miss the diplomatic leverage that the sanctions finally are dealing, " Lopez warned. "We have to be ready for astute diplomacy when the other guy cries uncle (concedes defeat) ... otherwise they are going to learn to live with an even higher level [of] pain" (Maclean/Quinn, Reuters III, Jan. 5).

Turkey's top diplomat on Thursday said his country had relayed to Iran a Western proposal for restarting discussions over its atomic activities.

Iran's foreign minister "responded in kind" to "an expression of willingness by the West to resume negotiations," Turkish Foreign Minister Ahmet Davutoglu said.

The last such talks were conducted in January 2011.

"We are waiting for a good result coming out of the willingness of the two parties to go back to the negotiating table," Davutoglu said. "As far as negotiations over Iran's peaceful nuclear energy program, we hope that we will gain good results and the unfavorable conditions that have emerged, we hope that they will go away. On the international arena we hope that Iran will be able to have good ties" (Robin Pomeroy, Reuters IV, Jan. 5).

Meanwhile, Iran on Friday said its navy would conduct additional practice maneuvers in February in the Strait of Hormuz, a key waterway for the shipment of Middle Eastern petroleum.

The upcoming drills in the Strait of Hormuz and Persian Gulf would differ from prior maneuvers, Iran's Fars News Agency quoted Rear Adm. Ali Fadavi, naval chief for Iran's Revolutionary Guard, as saying. The official did not elaborate.

"Today the Islamic Republic of Iran has full domination over the region and controls all movements within it," Fadavi said (Hashem Kalantari, Reuters V, Jan. 6).

Meanwhile, a group of U.S. legislators on Thursday announced plans to discuss potential steps against Iran during visits next week to France, Qatar, Saudi Arabia and the United Arab Emirates, AFP reported.

"I look forward to discussing a wide range of issues, including the very concerning threat posed to the entire world by Iran's continuing support for terrorism and its pursuit of nuclear capability," House Majority Leader Eric Cantor (R-Va.), who would head the group, said in released remarks.

House Foreign Affairs Committee Chairwoman Ileana Ros-Lehtinen (R-Fla.), another planned participant, added: "One goal that all responsible nations must be committed to is preventing Iran from acquiring a nuclear weapon" (Agence France Presse III/Google News, Jan. 5).

Elsewhere, Tehran is apparently testing nuclear material for an unfinished reactor site that might eventually generate weapon-usable plutonium, former International Atomic Energy Agency safeguards chief Olli Heinonen warned on Thursday.

"The rod Iran claims to have made contains natural uranium, suggesting that it is intended for the IR-40 heavy-water reactor at Arak," Reuters quoted Heinonen as saying in a commentary published on Thursday by the London Guardian. "This is a cause for concern as such an action is proscribed by the United Nations Security Council" (Fredrik Dahl, Reuters VI, Jan. 5).

British Defense Secretary Philip Hammond on Thursday said he believes Iran is in  "flat out" pursuit of a nuclear-weapon capacity, AFP reported.

"I think they are going as fast as they can," Hammond said. "And I think our working assumption also has to be that Iran is set on a course that it will only be deterred from if the price for achieving the goal that they set out becomes too high.

"That is what we are in the process of doing by stepping up the pressure on oil revenues, on the operation of the central bank, on the economy generally," the official said (Agence France-Presse IV/Spacewar.com, Jan. 5).