Global Security Newswire

Iran's petroleum business is suffering as a result of plans for a European Union oil embargo aimed at pressuring the Middle Eastern nation to address shared concerns over its nuclear program, Reuters on Friday quoted a global energy policy think tank as saying (see GSN, Feb. 9).

European Union nations last month finalized a six-month time line for prohibiting petroleum purchases from Iran as part of a wider international effort to curb Iranian activities that could support nuclear weapons development, according to previous reporting. Tehran insists its atomic operations have no military component.

The embargo might ultimately prompt countries to substitute between 1 million and 2.6 million barrels of Iranian petroleum each day with oil from other producers, even though EU nations received only 600,000 barrels of Iranian oil daily in 2011, the International Energy Agency in Paris said.

"International sanctions targeting Iran's existing oil exports do not come into effect until July 1, but they are already having an impact on crude trade flows in Europe, Asia and the Middle East," said the organization, which consults with 28 countries.

"Broader U.S. and EU economic sanctions on Iran's central bank" might affect Iran's petroleum dealings with countries beyond Europe  "if they successfully block the predominant channel for oil payments to Iran," it added.

"Although there are five months before restrictions on existing contracts take effect, European customers have already curtailed imports of Iranian crude and Asian buyers are lining up alternative sources of supply," the group stated (Christopher Johnson, Reuters I, Feb. 10).

The European Union on Friday encouraged India to throw its weight into international efforts to seek greater flexibility from Tehran over its nuclear activities.

"We shared our deep concern on the Iranian nuclear program," Deutsche Presse-Agentur quoted European Council President Herman Van Rompuy as saying.

"I asked Prime Minister (Manmohan) Singh to use India's leverage towards Iran to help bring Tehran back to the negotiating table," the EU official said following talks with the Indian leader in New Delhi (Deutsche Presse-Agentur/Monsters and Critics, Feb. 10).

He rejected the use of armed force to address the standoff, Reuters reported (Manoj Kumar, Reuters II, Feb. 10).

Singh joined the EU leader in calling for a negotiated resolution to the dispute, DPA reported.

"There have been problems with the Iran nuclear program," the Indian prime minister said. 'We sincerely believe that this issue should be resolved by giving maximum scope to diplomacy" (Deutsche Presse-Agentur).

Separately, New Delhi plans to dispatch officials and private-sector representatives to Iran in late February to examine means of exploiting new market demands resulting from atomic penalties, Agence France-Presse quoted Indian Commerce Secretary Rahul Khullar as saying on Thursday.

"We will be mounting a mission to Iran at the end of the month to promote our own exports. A huge delegation will be going," Khullar said (Agence France-Presse/Google News, Feb. 9).

India is complying with four U.N. Security Council punitive resolutions aimed at pressuring Iran to halt its uranium refinement operations, but the penalties leave “a vast range of products which India can export to Iran,” the New York Times quoted the official as saying (Rick Gladstone, New York Times, Feb. 9).

India is entitled to pursue trade demands created by U.S. and European efforts to isolate Iran, an observer told the Press Trust of India.

"If Europe and the U.S. want to stop export to Iran, why should I (India) follow the suit. Why shouldn't we tap that opportunity," the unidentified commentator asked (Press Trust of India I/Economic Times, Feb. 10)

Iran has suggested swapping a quantity of its petroleum for grain from India, according to a Thursday report by the Economic Times (Gladstone, New York Times). Tehran has also said it could take Indian currency in place of U.S. money for roughly 50 percent of the petroleum it sells to the South Asian country, Reuters reported on Wednesday (Sachin Parasharr, Reuters III/Economic Times, Feb. 9).

Iran could pursue similar swaps with other countries to help circumvent penalties targeting its central bank as well as other punitive measures, the Times quoted specialists on the Iranian economy as saying.

“Iran will barter oil for food, oil for cars,” said Djavad Salehi-Isfahani, one expert with the Virginia Polytechnic Institute and State University. “They will find ways” (Gladstone, New York Times).

Washington said it is coordinating with New Delhi and other capitals in an effort to further cut into Iran's petroleum exports, PTI reported on Friday.

"In the context of the legislation that the (U.S.) president signed on Dec. 29, we are working with countries around the world, including India, that maintain strong oil relationships with Iran, encouraging all of them to reduce their dependence on Iranian crude," U.S. State Department spokeswoman Victoria Nuland said (see GSN, Jan. 3)

U.S. government representatives have addressed the matter in discussions at the State Department with Indian Foreign Secretary Ranjan Mathai, Nuland said.

"That was an opportunity to continue conversations that we had started in Delhi about how India might be able to wean itself from Iranian oil," the official said, noting the dialogue was ongoing.

"We're having similar conversations with countries in Asia, in Europe, in other parts of the world," Nuland said.

"What we are saying to all of our allies and partners around the world is that we are encouraging everybody to buy less Iranian crude, as little as possible, to find alternatives sources of supply, in the context of the economic squeeze that all of us are trying to put on Iran, to encourage Iran to come clean with the international community about its nuclear weapons program," the spokeswoman said.

Questioned on whether New Delhi's support was sufficient, Nuland said Washington would not judge "individual countries."

"We have said a number of times that, in the context of this 180-day period, while we're working with countries, as the legislation stipulates, we're not going to be giving individual countries a grade," the official said. "We're simply talking to you about the general message that we're giving to everybody. In each case, the circumstances are quite specific, in terms of the relationships countries have with Iran, in terms of their energy needs, in terms of where and how they might find alternative sources of supply."

"So we're working with each country on an individual basis. But we're not going to be grading them as we go along," Nuland said (Press Trust of India II/Economic Times, Feb. 10).

Senator Robert Menendez (D-N.J.), though, voiced frustration on Tuesday over India's dealings with Iran, the New York Times reported.

New Delhi “seems to be rebuking the sanctions and looking for workarounds,” Menendez said at the confirmation hearing for U.S. Ambassador-designate to India Nancy Powell (Gladstone, New York Times).

''For our sanctions to be effective, it's really crucial that all nations, particularly democratic nations like India, work together to confront Iran,'' he said, adding Powell should communicate to India that the sanctions were ''policy priority."

Powell said “this is going to be a very important topic and one of those that I will be dealing with very seriously and very early in my tenure” (Gladstone, New York Times).

She noted, though, that Mathai has said the South Asian state was seeking to eliminate cut its Iranian petroleum purchases. New Delhi has backed U.S. positions at the International Atomic Energy Agency on four occasions and communicated to the United States a wish for Iran to remain without nuclear weapons, the Times of India quoted her as saying.

"These are positive developments," she said. '"Our own efforts to support India in looking at other sources of energy will be a contributor to this" (Chidanand Rajghatta, Times of India, Feb. 8).

Meanwhile, Republican presidential contender Rick Santorum on Thursday alleged President Obama is seeking to enable Iran to acquire a nuclear bomb and had intentionally undermined Israel by revealing possible moves toward attacking its Persian Gulf rival, the Associated Press reported.

"We're throwing Israel under the bus because we know we're going to be dependent upon [the Organization of Petroleum-Exporting Countries]," said Santorum, who linked Obama's steps against plans for a U.S.-Canadian oil channel and U.S. reliance on Middle Eastern petroleum imports.

"We're going to say, 'Oh, Iran, we don't want you to get a nuclear weapon — wink, wink, nod, nod — go ahead, just give us your oil,'" Santorum said while campaigning in Oklahoma City. "Folks, the president of the United States is selling the economic security of the United States down the river right now."

Some nations partnered with Washington buy petroleum from Iran, but the United States itself does not.

"The president fought tooth and nail against putting sanctions on Iran and only capitulated at the end," the former Pennsylvania senator later said to CNN. "This is a president who is not standing by our allies, is trying to appease, trying to find a way to allow -- clearly to allow Iran to get this nuclear weapon. He's doing absolutely nothing in a consequential way to make sure that they do not get this weapon" (Brian Bakst, Associated Press/Google News, Feb. 9).

Elsewhere, Chinese Assistant Foreign Minister Ma Zhaoxu is slated to travel to Iran for discussions on Sunday of the nation's atomic activities, Foreign Ministry spokesman Liu Weimin said in remarks reported by Reuters.

"We have consistently advocated dialogue and cooperation as the only proper channel for resolving the Iran nuclear issue," Liu said.

"(Ma will) have a further exchange of views with Iran over its nuclear program," he said without elaborating (Michael Martina, Reuters IV, Feb. 9).

Israel has funded, prepared and provided weapons to the Iranian resistance group People's Mujahedeen for carrying out lethal strikes on Iranian atomic experts, NBC News on Thursday quoted U.S. government insiders as saying (Engel/Windrem, NBC News, Feb. 9).

Iran's potential acquisition of a nuclear weapon would probably prompt Saudi Arabia to break a 2008 pledge to limit its atomic efforts to civilian pursuits, a high-level Saudi official said in comments reported on Friday by NewsCore (see GSN, Dec. 5, 2011).

"There is no intention currently to pursue a unilateral military nuclear program but the dynamics will change immediately if the Iranians develop their own nuclear capability," the official told the London Times. "Politically, it would be completely unacceptable to have Iran with a nuclear capability and not the kingdom."

Saudi Arabia could acquire nuclear bombs within weeks under a possible deal with Pakistan, a Western government source told the Times. Riyadh and Islamabad have denied the existence of such an arrangement (NewsCore/News.com.au, Feb. 10).