Daily Archives: January 6, 2012

Iran plans more war games in strait as sanctions bite

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By Robin Pomeroy
TEHRAN | Fri Jan 6, 2012 8:03am EST

(Reuters) – Iran announced plans on Friday for new military exercises in the world’s most important oil shipping lane, the latest in weeks of bellicose gestures towards the West as new sanctions threaten Tehran’s oil exports.

Real Admiral Ali Fadavi, naval commander of the Revolutionary Guards Corps, said exercises next month would focus directly on the Strait of Hormuz, which leads out of the Gulf and provides the outlet for most Mid-East oil.

Iran held a 10-day drill which ended on Monday in neighboring seas.

“Today the Islamic Republic of Iran has full domination over the region and controls all movements within it,” Fadavi said in remarks reported by the Fars news agency.

Iranian officials have threatened in recent weeks to block the strait if new sanctions harm Tehran’s oil exports, and this week said they would take action if the United States sails an aircraft carrier through it.

The United States, which has a massive naval fleet in the area that is overwhelmingly more powerful than Iran’s sea forces, says it will ensure the international waters of the strait stay open. Britain said on Thursday that any attempt to close it would be illegal and unsuccessful.

New financial sanctions signed into law by U.S. President Barack Obama on New Year’s Eve are aimed at making it difficult for most countries to buy Iranian oil. The European Union is expected to announce tough measures of its own at the end of the month.

Most traders believe Iran will still be able to find buyers, at least in the short term, for its exports of 2.6 million barrels of oil per day (bpd). But it may have to offer steep discounts that reduce the hard currency revenue it needs to feed its 74 million people.

The sanctions are already having an effect on Iran’s streets, where prices have been rising and the rial currency is falling. Iranians have been queuing up at banks to convert their savings into dollars.

The economic hardship comes less than two months before a parliamentary election, Iran’s first since a 2009 presidential election that led to mass street protests across the country.

Iran’s rulers successfully put down those demonstrations two years ago with force, but since then the Arab Spring has shown the vulnerability of authoritarian governments in the region to public protest fueled by anger over economic hardship.

NUCLEAR PROGRAMME

Washington and its allies are imposing the measures to force Iran to abandon a nuclear program which they say is aimed at producing an atomic bomb. Iran says the program is peaceful.

European Union officials say the EU, which collectively buys about 500,000 bpd of Iranian oil, rivaling China as the largest market, has agreed to impose an embargo halting all imports.

EU diplomats said they are discussing how long they will give member countries to halt purchases, with France, Germany and others wanting the ban imposed within three months but Greece favoring a grace period of up to a year.

China has also cut its imports by more than half in January and February while haggling with Tehran over the size of the discount it wants in return for doing business with it.

Other big buyers, including Turkey and Japan, say they are seeking a waiver from the U.S. sanctions.

The new American law allows Obama to give temporary waivers to allies to continue to buy Iranian oil to prevent a price shock, but to receive the permits, countries are meant to show they are reducing trade with Iran.

Iran has put on a brave face over the sanctions. Foreign Minister Ali Akbar Salehi said on Thursday the country would “weather the storm.”

“Iran, with divine assistance, has always been ready to counter such hostile actions and we are not concerned at all about the sanctions,” he told a news conference.

But in a sign it is seeking to alleviate the pressure, Salehi said Tehran was interested in resuming negotiations over its nuclear program with Western powers.

Turkey’s visiting foreign minister brought an offer from Catherine Ashton, the EU foreign policy chief who negotiates on behalf of major powers.

Talks over Iran’s nuclear program collapsed a year ago. Iran has repeatedly offered to restart the talks since then, but has insisted it will not negotiate over its right to continue enriching uranium.

Western countries say talks are pointless unless a halt to enrichment is on the table. Enriched uranium can be used to fuel a reactor or build a bomb.

OIL PRICES IN SPOTLIGHT

After years of sanctions that had little impact, Western countries have adopted a far more direct approach in recent months, with sanctions that explicitly impact the oil industry that provides 60 percent of Iran’s economy.

The new U.S. measures would cut off any institution that deals with the Iranian central bank from the U.S. financial system. If implemented fully, it would make it impossible for most countries’ refineries to buy Iranian crude.

But Washington has to balance its determination to isolate Tehran with concern that driving its oil off markets will raise prices and hurt the fragile global economy. Brent crude futures hovered above $113 a barrel on Friday, up nearly $7 since Obama signed the new sanctions law.

To ease the impact on markets, the new U.S. measures take effect over several months, and the leeway given to Obama to offer waivers allows countries time to find other suppliers. Saudi Arabia, the world’s biggest oil exporter and a foe of Iran, says it will make up for any supply shortfall.

Traders and analysts believe it is unlikely Iran will actually carry out its threats to block the strait.

“We’ve seen this movie before,” said Cliff Kupchan, an Iran analyst at the Eurasia Group. “Neither side wants a war. A lot of this rhetoric is overstated.”

Even if it tried, Iran could not blockade the strait for long in a direct challenge to a U.S. fleet led by the giant supercarrier John C. Stennis, accompanied by a guided-missile cruiser and flotillas of destroyers and submarines.

The Combined Maritime Force protecting Gulf shipping also includes other countries such Britain, France, Canada, Australia and the Gulf Arab states, under the command of a U.S. admiral.

Still, Iran has many ways it could provoke a Western response, from missiles within range of U.S. targets in the region, to small boats that could attack a ship near shore, to allied militia in Palestine and Lebanon that can strike Israel.

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The Nethelands: Mario Kerssens Joins Van Aalst’s CargoMaxx Team

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Mario Kerssens has joined the CargoMaxx team at Van Aalst Offshore & Marine, inventors of the multi application tank system CargoMaxx, as Manager Business Development, starting the 1st of January 2012.

After serving the shipping and offshore industry for more than 20 years in senior sales, marketing and business development positions at Dockwise, Fairmount, Sealift and Fairstar, his latest role has been with FG International Holland BV, the Dutch Special Lifting company, that recently teamed up with Linjebygg Offshore from Norway under the new name LBO International.

At Van Aalst his focus will be on the market development of the successfully introduced CargoMaxx handling system for combined liquid and dry bulk on board platform supply vessels, anchor handling vessels, mobile offshore drilling units and fixed platforms.

Supported by orders triggered by oil and gas giants Statoil and Petrobras, this innovative system is, according to Van Aalst, set to revolutionize the logistics involved with amongst others drill cuttings in an environmentally smarter way than the present outdated industry standards.

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Mexico Turns Up the Heat on Drug Lord Guzman

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MEXICO CITY (Reuters) – Mexico’s ruling conservative party had been in power just 50 days when drug lord Joaquin Guzman slipped out of a dark prison and into Mexican folklore.

Eleven years later, President Felipe Calderon‘s government is furiously trying to flush out the man nicknamed El Chapo – “Shorty” – to rescue its bloody war on drug cartels.

Guzman’s flight from a maximum security prison in a laundry cart on January 19, 2001, was a major embarrassment to Calderon’s predecessor Vicente Fox, who had just begun a new era as the first National Action Party (PAN) official to lead Mexico.

Now, Guzman is the greatest symbol of the cartels’ defiance of Calderon, whose war unleashed a wave of gang violence that is eroding support for the PAN ahead of presidential elections on July 1. Calderon is barred by law from seeking a second term.

In the last few months, authorities have arrested dozens of Guzman’s henchmen, seized tons of his contraband and razed the biggest single marijuana plantation ever found in Mexico, subsequently chalked up as another setback for El Chapo.

Over Christmas, three senior Guzman associates fell into Mexico’s hands, including one named as his chief of operations in Durango, a state where he has been rumored to hide out.

“He’s certainly aware people very close to him have been captured over the past two weeks, so he must be seriously concerned,” said Vanda Felbab-Brown, a Brookings Institution expert on the drug trade. “The noose seems to be tightening.”

Since his nighttime escape, Guzman’s legend has grown daily, as the wily capo evaded capture, eliminated rivals and sold billions of dollars worth of drugs across the border.

Meanwhile, the PAN, who won office under Fox pledging to restore law and order in a country tired of the corruption that marred the 71-year reign of the Institutional Revolutionary Party (PRI), has become more and more bogged down in the drug war.

Calderon staked his reputation on rooting out the cartels, but the army-led struggle has cost over 46,000 lives in five years, spooking tourists and investors alike.

As Calderon fought to contain the violence, he had to watch Guzman feted for success when the kingpin placed 41st in a Forbes list of the world’s most powerful people in 2009.

Immortalized in song both in Spanish and English, Guzman seemed so untouchable that rumors began spreading the Mexican government had made a deal with him to keep the peace.

That talk has now faded, and Attorney General Marisela Morales said in October Guzman would be captured “very soon.”

North of the border, things have also turned sour for the fugitive trafficker, who made headlines as the world’s most wanted man after the death of Osama bin Laden.

In last few weeks, U.S. authorities in Arizona announced details of raids in which they arrested over 200 people linked to the Sinaloa cartel, named for the northwestern Pacific state where Guzman was born, probably in 1957.

DRUG LORD PROTECTOR

Surveys show the public backs the crackdown on the cartels. But it also believes Calderon is losing the drug war.

Alberto Vera, director of research at pollster Parametria, said only something of the magnitude of Guzman’s capture would persuade voters Calderon was winning. That could boost support for his party by two or three points if it happened not long before the election, he added.

“Catching him would do Calderon credit,” said Luis Pavan, 40, a Mexico City insurance agent. “Fighting the gangs is one of the few good things the government has done.”

Weakened by the mounting death toll, Calderon’s PAN lags the opposition PRI by about 20 points, recent polls show.

Capturing Guzman could also benefit U.S. President Barack Obama, who faces a tough re-election battle against Republicans that accuse him of being weak on border security.

Arturo R. Garino, mayor of Nogales – an Arizona border city lying right on Guzman’s main smuggling routes – said the kingpin’s arrest would be a boost to both governments. “Cutting the head off the snake would help our economy too,” he said.

Intelligence officials declined to say if efforts to catch Guzman had increased, but his biographer Malcolm Beith said there was little doubt they had, as recent operations on El Chapo’s turf were being conducted by crack military units. “It’s been special forces and marines to the best of my knowledge. These guys are called in for special raids because they’re less likely to have been infiltrated,” he said.

Officials who have tracked Guzman say it is one thing to locate him and quite another to capture him.

Like late Colombian drug lord Pablo Escobar, Guzman has a reputation as a protector of his heartland in Sinaloa, a rugged region that the state still struggles to penetrate, where news of approaching of strangers quickly reaches him and his followers.

“Chapo has allegedly paid for schools, hospitals, and other public projects,” said Beith. “Second, he’s just about the only source of employment in parts of Sinaloa. And he has provided security of a sort. He’s been known to apprehend small-time crooks or thugs when they got out of hand. Lastly, the name Chapo pretty much puts the fear of God into people.”

With locals watching his back, Guzman has always had just enough warning to get away at the last minute. The exception was when soldiers captured him in Guatemala in June 1993.

New surveillance technology has raised the stakes though.

Mexico has admitted allowing U.S. spy planes to track the cartels, reviving memories of the chase for Escobar, who was gunned down on a Medellin rooftop in December 1993.

The U.S. Army’s spy unit Centra Spike played a crucial part in that takedown – using planes to triangulate Escobar’s phone calls – and U.S. surveillance drones stationed just across the Arizona border are likely being used to help catch Guzman.

Adding to his problems are attacks from the rival Zetas gang, which has engaged in a spate of tit-for-tat killings with the Sinaloa cartel that have spread onto his territory.

If Guzman is caught, it could unleash a bloody scramble for power before the election, said Jose Luis Pineyro, a security expert at Mexico’s Autonomous Metropolitan University.

“He is said to have influence in five continents,” he said. “It would have repercussions outside Mexico and America.”

Reuters

Strength Through Appeasement… Obama to Share US Missile Secrets With Russia

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Posted by Jim Hoft

Despite giving away nuclear secrets and implementing a policy of appeasement, the Russians announced in November that they will deploy new missiles aimed at U.S. missile defense sites.

But that didn’t divert President Obama from his mission of appeasement.

President Obama signaled Congress this week that he is planning on providing Moscow with US missile defense secrets.
The Washington Times reported:

President Obama signaled Congress this week that he is prepared to share U.S. missile defense secrets with Russia.

In the president’s signing statement issued Saturday in passing into law the fiscal 2012 defense authorization bill, Mr. Obama said restrictions aimed at protecting top-secret technical data on U.S. Standard Missile-3 velocity burnout parameters might impinge on his constitutional foreign policy authority.

As first disclosed in this space several weeks ago, U.S. officials are planning to provide Moscow with the SM-3 data, despite reservations from security officials who say that doing so could compromise the effectiveness of the system by allowing Russian weapons technicians to counter the missile. The weapons are considered some of the most effective high-speed interceptors in the U.S. missile defense arsenal.

There are also concerns that Russia could share the secret data with China and rogue states such as Iran and North Korea to help their missile programs defeat U.S. missile defenses.

Hat Tip Maria

For the record… Obama met secretly with Gorbachev in March 2009 where they discussed ways of reducing their countries’ respective nuclear arsenals.
Hat Tip Chris

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