Category Archives: Economic Sanctions
Economic sanctions are domestic penalties applied by one country (or group of countries) on another for a variety of reasons. Economic sanctions include, but are not limited to, tariffs, trade barriers, import duties, and import or export quotas. The most famous example of an economic sanction is the fifty-year-old United States embargo against Cuba.
Economic sanctions are not always imposed because of economic circumstances. For example, the United States has imposed economic sanctions against Iran for years, on the basis that the Iranian government sponsors groups who work against US interests.
The United Nations imposed stringent economic sanctions upon Iraq after the first Gulf War, and these were maintained partly as an attempt to make the Iraqi government co-operate with the UN weapons inspectors’ monitoring of Iraq’s weapons and weapons programs. These sanctions were unusually stringent in that very little in the way of trade goods were allowed into or out of Iraq during the sanction period (further information about these sanctions and their effects can be found at www.casi.org.uk and at ). The sanctions were not lifted until May 2003, after the government of Iraqi president Saddam Hussein was overthrown.
There is a United Nations sanctions regime imposed by UN Security Council Resolution 1267 in 1999 against all Al-Qaida- and Taliban-associated individuals which has undergone years of modification by a dozen UN Security Council Resolutions. The cornerstone of the regime is a consolidated list of persons maintained by the Security Council. All nations are obliged to freeze bank accounts and other financial instruments controlled by, or used for the benefit of, anyone on the list.
THE threat of an Israeli attack on Iran’s nuclear facilities has pushed world oil prices up by 15 per cent in the past month and raised fears that the fissile geopolitics of the Middle East might once again spell global economic havoc.
Israel believes Iran’s nuclear program is approaching a point of no return beyond which it would be impossible to prevent it developing nuclear weapons.
Facing an election in November and enjoying the first rays of economic sunshine since the 2008 global financial crisis, Obama does not need a Middle East war and soaring oil prices.
However, there is a strong push in Israel for military action.
“If we do not stop Iran now, later on it will be impossible,” Deputy Foreign Minister Danny Ayalon says.
Israel, which is understood to have its own nuclear weapons, sees a nuclear-armed Iran as an existential threat.
Saudi Arabia has indicated it would seek nuclear capability if Iran achieved it, adding further uncertainty to the stability of the world’s richest oil region.
The next three months are the most likely time for an attack as Iranian skies are clearest during the northern spring.
Iran has declared it will close the Strait of Hormuz as a first point of retaliation for any Israeli raid.
The strait is the seaway through which the oil of Saudi Arabia, Iraq, Kuwait, Iran and the United Arab Emirates is shipped.
Giant oil tankers carrying 18 million barrels of oil every day travel down the 10km-wide outbound shipping channel. This represents a quarter of the world’s oil supply and 40 per cent of seaborne oil trade.
If Iran could block the strait, it would represent a greater disruption to the world’s supplies than those that followed the 1973 oil embargo after the Yom Kippur war, the 1978 Iranian revolution, the 1980 Iraq-Iran conflict or the 1990 Iraqi invasion of Kuwait.
The International Monetary Fund has warned that the world is ill-prepared for a new oil crisis. In a paper prepared for last weekend’s G20 finance ministers’ meeting in Mexico and released on Friday, the IMF said developed countries had run down their emergency stocks while spare capacity in the OPEC countries was no more than average.
“A halt of Iran’s exports to OECD economies without offset from other sources could trigger an initial oil price increase of around 20-30 per cent,” the fund said. “A sustained blockade of the Strait of Hormuz would lead to a much stronger and unprecedented disruption of global oil supply.”
The Australian government is expressing confidence that a crisis could be managed; however, the scale of the turmoil that would flow from a Hormuz Strait closure would far exceed the government’s contingency planning.
The shock from soaring oil prices would also undermine the emerging hopes for a global economic recovery, damaging consumer and business confidence and depressing the terms of trade for oil-importing nations.
Resources Minister Martin Ferguson told The Australian that any reduction of oil throughput in the Strait of Hormuz would inevitably affect global supply.
“The possible impact on Australia will depend on a range of factors, including the length of disruption.”
He said the national energy security assessment completed last year had established that the security of Australia’s supplies of liquid fuels was “robust, with resilience enabling the market to adjust to meet demand in the event of temporary global shocks”.
However, the Australian government is as politically exposed to a new oil crisis as is the Obama administration. Already, the rising oil price is feeding the Coalition’s argument that Australia can ill afford to be introducing carbon taxes.
It will put increasing pressure on the cost of living.
If rising prices turn into a full-blown oil crisis over the next few months, the case for abandoning the introduction of the July 1 start-up for the carbon tax would become overwhelming.
Australia is far more vulnerable to an oil crisis than the level of direct imports from the Middle East would suggest.
Australia’s oil refineries, which still supply 70 per cent of domestic petroleum products, depend on the Middle East for barely 15 per cent of their crude oil supplies.
Domestic oil wells, mostly in Bass Strait, supply 20 per cent, while the balance comes from more than 20 nations including Malaysia, Indonesia, Papua New Guinea, Nigeria and New Zealand.
However, Australia also imports 30 per cent of its refined petroleum products, mostly from Singapore, which depends on the Middle East for more than 80 per cent of its supplies.
The Australian government conducted a review of its energy security late last year. The consulting firm ACIL Tasman modelled a supply disruption in which Singapore’s refineries were out of action for 30 days, depriving the region of 1.4 million barrels a day of production.
This would be similar to the effects of Hurricanes Katrina and Rita, which knocked out Gulf of Mexico oil production and US oil refining in 2005.
One of the study’s authors, Alan Smart, says the shortfall pushed up prices but this was sufficient to close the gap, with demand falling and new supplies becoming available.
“When the price spiked, the market responded very quickly with the gap filled within six days.”
The study concluded that the same could be expected were Australia to lose access to Singapore supplies, with spare capacity elsewhere in Asia quickly brought onstream.
The study found that although prices would rise by 18 per cent, there would be no interruption to economic activity in Australia.
Smart cautions, however, that a localised or regional supply problem such as a refinery shutdown, may be very different from the results of a war in the Middle East.
Singapore analyst with the oil research company Wood Mackenzie Sushant Gupta says that scenarios for a closure of the strait show a major impact on oil supplies throughout the Asian region.
“There is a high dependency on Middle East crude, not just in Singapore, with some economies taking more than 90 per cent of their crude from there.”
Gupta says the spare capacity in the Asian refining industry would be of no use to Australia if the refineries could not get access to crude supplies.
Moreover, countries throughout the region would be principally concerned to secure their own domestic supplies. Countries such as South Korea, which import petroleum but export refined products would divert more of their output to their own market.
Exports from countries such as Malaysia and Indonesia could also fall, at least as a short-term response.
Gupta says that in the event of shortages, Australia would suffer from being at the greatest distance from the regional refineries.
“All the Asian countries will be competing for the same barrels of produce from Singapore. The premium on the products will increase and the countries closest physically to Singapore will have the advantage due to freight.”
Gupta said there would be no additional supplies coming forward to meet shortfalls from Singapore, so it would be up to the market, with a spike in prices, to reduce demand.
So, although Australia currently draws the bulk of its supplies from non-Middle East supplies, the reality is that it is self-sufficient for only 20 per cent of supplies, and the market’s ability to supply the rest would be tested by an extended blockade in the Gulf.
An immediate response would be the drawdown of emergency supplies kept by all nations that are members of the International Energy Agency.
The IEA was established among oil importing countries in the wake of the 1973 OPEC oil embargo and requires all members to keep a minimum of 90 days’ supplies.
In Australia’s case, the reserves are held by the major oil companies as part of their normal commercial operations. The steady slide in Australia’s domestic oil supply has meant that Australia’s reserves are falling short of the requirement, currently standing at 88 days.
ACIL-Tasman warns that the shortfall is likely to increase over coming years; however, it is not enough to make a meaningful difference to Australia’s ability to withstand a crisis.
Ferguson retains sweeping powers under the Liquid Fuels Emergency Act to order the oil companies to give priority to essential fuel users in the event that the nation were confronted with physical fuel shortages.
It is not certain that Iran would succeed in an effort to block the strait, despite the total width of the waterway narrowing to 40km.
Many tankers were sunk during the Iran-Iraq war in the early 1980s; however, shipping technology has greatly advanced since then.
Although modern ships ostensibly make a much larger target, carrying as much as two million barrels of oil each, they are divided into sealed compartments with double-hulls and are much harder to stop or sink, even than warships.
US analysis finds that an attack on one of these vessels by three anti-ship cruise missiles would have only a 12 per cent chance of stopping it.
The same research project found Iran would have to sow a minefield with more than 1000 advanced mines, a task that would take several months, to disrupt shipping, and that would succeed in disabling only half a dozen ships.
The head of the US joint chiefs of staff, General Martin Dempsey, has said Iran would have the capacity to block the strait, but only for a short period.
“We’ve invested in capabilities to ensure that if that happens, we can defeat that.”
The US Fifth Fleet, stationed on the other side of the Persian Gulf in Bahrain, including more than 20 ships including aircraft carriers, could overwhelm the sort of “small suicide boat” attacks which the US believes Iran is planning and provides a credible support to tanker fleet.
American oil researcher Amy Myers Jaffe says it would be difficult for Iran to stop the flow of oil from the Arabian Gulf for long, if at all.
What is beyond doubt, however, is that the moment Israeli aircraft start bombing Iran, the oil price will jump. It has already risen from about $US105 a barrel to $US125 since the start of the year.
The impact on Australia has been diluted by the strength of our currency, which means wholesale petrol prices have risen by only 5.5 per cent this year, but further rises are in prospect.
An analysis by Barclays Capital suggests the oil price would rise to $US150 to $US200 a barrel in the event of an attack; however, estimates are imprecise.
As well as the loss of supply, there would be additional demand from buyers seeking precautionary stocks.
Westpac’s head of international economics, Huw McKay says the world economy remains vulnerable to oil price spikes and adds this was shown in the first half of last year when the Arab Spring pushed oil prices higher.
“That put a spanner in the works for the United States economy at a time when it had finished calendar 2010 with a bit of an upswing. When it ran into the high oil prices and then the Japanese tsunami, the US had a very underwhelming first half year.”
Mr McKay says the situation is similar, with consumers beginning to show a revival in demand. “What the US consumer doesn’t need is a fuel tax hitting them.”
The jump in petrol prices both damages consumer spending and causes an exodus from US motor vehicle industry.
Higher oil prices will also damage the economies of Asia. In several Asian economies, including India and Indonesia, government subsidies to petrol means that rising fuel prices results in a loss of control over the budget.
At Monday’s meeting between Benjamin Netanyahu and Barack Obama the Israeli prime minister will deliver a stark warning, reports Adrian Blomfield in Jerusalem
By Adrian Blomfield, in Jerusalem
8:31PM GMT 03 Mar 2012
Their relationship, almost from the outset, has been frostier than not, a mutual antipathy palpable in many of their previous encounters.
Two years ago, Barack Obama reportedly left Benjamin Netanyahu to kick his heels in a White House anteroom, a snub delivered to show the president’s irritation over Israel’s settlement policy in the West Bank. In May, the Israeli prime minister struck back, publicly scolding his purse-lipped host for the borders he proposed of a future Palestinian state.
When the two men meet in Washington on Monday, Mr Obama will find his guest once more at his most combative. But this time, perhaps as never before, it is the Israeli who has the upper hand.
Exuding confidence, Mr Netanyahu effectively brings with him an ultimatum, demanding that unless the president makes a firm pledge to use US military force to prevent Iran acquiring a nuclear bomb, Israel may well take matters into its own hands within months.
The threat is not an idle one. According to sources close to the Israeli security establishment, military planners have concluded that never before has the timing for a unilateral military strike against Iran’s nuclear facilities been so auspicious.
- Obama sends top security aide to Israel
18 Feb 2012
- Is Israel gearing up for an attack on Iran?
17 Feb 2012
It is an assessment based on the unforeseen consequences of the Arab Spring, particularly in Syria, which has had the result of significantly weakening Iran’s clout in the region.
Israel has always known that there would be an enormous cost in launching an attack on Iran, with the Islamist state able to retaliate through its proxy militant groups Hamas and Hizbollah, based in Gaza and Lebanon respectively, and its ally Syria.
Each is capable of launching massive rocket strikes at Israel’s cities, a price that some senior intelligence and military officials said was too much to bear.
But with Syria preoccupied by a near civil war and Hamas in recent weeks choosing to leave Iran’s orbit and realign itself with Egypt, Iran’s options suddenly look considerably more limited, boosting the case for war.
“Iran’s deterrent has been significantly defanged,” a source close to Israel’s defense chiefs said. “As a result some of those opposed to military action have changed their minds. They sense a golden opportunity to strike Iran at a significantly reduced cost.” Not that there would be no cost at all. With the rise of the Muslim Brotherhood in Egypt, Hamas has chosen to throw its lot in with its closest ideological ally and forsake Iran and its funding, but it could still be forced to make a token show of force if smaller groups in Gaza that are still backed by Tehran unleash their own rockets.
Likewise, Bashar al-Assad, the Syrian president, could seek to reunite his fractured country with military action against Israel.
Iran would almost certainly launch its long-range ballistic missiles at Israel, while Hizbollah, with an estimated arsenal of 50,000 rockets, would see an opportunity to repair its image in the Middle East, battered as a result of its decision to side with Mr Assad.
Even so, it is not the “doomsday scenario” that some feared, and a growing number in the security establishment are willing to take on the risk if it means preventing the rise of a nuclear power that has spoken repeatedly of Israel’s destruction.
“It won’t be easy,” said a former senior official in Israel’s defense ministry. “Rockets will be fired at cities, including Tel Aviv, but at the same time the doomsday scenario that some have talked of is unlikely to happen. I don’t think we will have all out war.” In itself, the loss of two of Iran’s deterrent assets would probably not be enough to prompt Israel to launch unilateral military action.
The real urgency comes from the fact that Israeli intelligence has concluded that it has only between six and nine months before Iran’s nuclear facilities are immune from a unilateral military strike.
After that, Iran enters what officials here call a “zone of immunity”, the point at which Israel would no longer be able, by itself, to prevent Tehran from becoming a nuclear power.
By then, Israel assesses, Iran will have acquired sufficient technological expertise to build a nuclear weapon. More importantly, it will be able to do so at its Fordow enrichment plant, buried so deep within a mountain that it is almost certainly beyond the range of Israel’s US-provided GBU-28 and GBU-27 “bunker busting” bombs.
It is with this deadline in mind that Mr Netanyahu comes to Washington. Mr Obama’s administration has little doubt that their visitor’s intent is serious. Leon Panetta, the US defence secretary, stated last month that there was a “strong likelihood” of Israel launching an attack between April and June this year.
Senior US officials have, unusually, warned in public that such a step would be unwise and premature, a sentiment echoed by William Hague, the Foreign Secretary.
Mr Obama is determined that beefed up US and EU sanctions targeting Iran’s central bank and energy sector be given the chance to work and is desperate to dissuade Israel from upsetting his strategy.
But to give sanctions a chance, Mr Netanyahu would effectively have to give up Israel’s ability to strike Iran and leave the country’s fate in the hands of the United States – which is why he is demanding a clear sign of commitment from the American president.
“This is the dilemma facing Israel,” the former senior military officer said. “If Iran enters a zone of immunity from Israeli attack can Israel rely on the United States to prevent Iran going nuclear?”
Mr Netanyahu’s chief demand will be that Washington recognizes Israel’s “red lines”. This would involve the Barack administration shifting from a position of threatening military action if Iran acquired a nuclear weapon to one of warning of the use of force if Tehran acquired the capability of being able to build one.
Mr Obama will be reluctant to make such a commitment in public, though he might do so in private by pledging action if Iran were to expel UN weapons inspectors or begin enriching uranium towards the levels needed to build a bomb, according to Matthew Kroenig, a special adviser to the Pentagon on Iran until last year.
“Israel is facing the situation of either taking military action now or trusting the US to take action down the road,” Mr Kroenig, an advocate of US military strikes against Iran, said. “What Netanyahu wants to get out of the meeting are clear assurances that the US will take military action if necessary.” The American president may regard Mr Netanyahu as an ally who has done more to undermine his Middle East policy of trying to project soft power in the Arab world than may of his foes in the region.
But, on this occasion at least, he will have to suppress his irritation.
Mr Netanyahu is well aware that his host is vulnerable to charges from both Congress and his Republican challengers for the presidency that he is weak on Iran, and will seek to exploit this as much as possible.
Tellingly, Palestinian issues, the principal source of contention between the two, will be sidelined and Mr Obama has already been forced to step up his rhetoric on Iran beyond a degree with which he is probably comfortable.
Last week, in a notable hardening of tone, he declared his seriousness about using military force to prevent Iran acquiring a nuclear weapon, saying: “I do not bluff.” Yet whatever commitments he might give to Mr Netanyahu it is far from clear that it will be enough to dissuade Israel from taking unilateral action.
Among the Israeli public, there is a sense of growing sense that a confrontation with Iran is inevitable. Overheard conversations in bars and restaurants frequently turn to the subject, with a growing popular paranoia fed by the escalation in bomb shelter construction, air raid siren testing and exercises simulating civilian preparedness for rocket strikes.
Last week, Israeli newspapers fretted that the government was running short of gas masks, even though more than four million have already been doled out.
But while the growing drumbeat of war is unmistakable, it is unclear whether or not Mr Netanyahu, for all his bellicose rhetoric, has yet fully committed himself to the cause.
Ostensibly, a decision for war has to be approved by Mr Netanyahu’s inner cabinet. But everyone in Israel agrees that the decision ultimately rests with Ehud Barak, the defense minister who is unabashedly in favor of military action, and, most importantly, the prime minister.
“Netanyahu is a much more ambiguous and complex character,” said Jonathan Spyer, a prominent Israeli political analyst. “We know where Barak stands but with Netanyahu it is less clear.
“Netanyahu is not a man who likes military adventures. His two terms as prime minister have been among the quietest in recent Israeli history. Behind the Churchillian character he likes to project is a very much more cautious and vacillating figure.”
Were Mr Netanyahu to overcome his indecisiveness, as many observers suspect he will, real questions remain about how effective an Israeli unilateral strike would be.
With its US-supplied bunker busters, Israel’s fleet of F-15i and F-16i fighter jets, and its recently improved in-air refueling capabilities, Israel could probably cause significant damage to the bulk of Iran’s nuclear facilities, including the Natanz enrichment plant.
But the second enrichment plant at Fordow, buried beneath more than 200 feet of reinforced concrete, could prove a challenge too far.
“Natanz yes, but I don’t think they could take out Fordow,” said Mark Fitzpatrick, an Iran expert at the International Institute of Strategic Studies in London. “They could take out the entrance ramps but not the facility itself.”
With its Massive Ordnance Penetrator bunker busters, each weighing almost 14 tonnes, the United States stands a much better chance of striking Fordow successfully, thus disrupting Iran’s nuclear programme for far longer than the one to three years delay an Israeli attack is estimated to cause.
But whether Israeli is prepared to leave its fate in American hands is another matter.
“Israelis are psychologically such that they prefer to rely on themselves and not on others, given their history,” the Israeli former senior defense ministry official said. “We feel we have relied on others in the past, and they have failed us.”
- Obama says not bluffing on Iran military option (mb50.wordpress.com)
- Israel’s US supporters flock to hear Barack Obama on Iran fears – Times of India (timesofindia.indiatimes.com)
- Obama warns both Iran and Israel, ‘I don’t bluff’ (therearenosunglasses.wordpress.com)
- Iran Now Top US-Israel Issue (myfoxphoenix.com)
- Israel’s Backers Pressure Obama To Combat Iran (mysanantonio.com)
Japanese refiners have stepped up efforts to get an additional force majeure clause included in Iranian crude oil contracts that could be invoked if tankers cannot call on Iran‘s ports to lift barrels because of the loss of insurance cover, sources close to the matter told Platts Thursday.
The latest move comes as Japanese refiners are trying to conclude term contracts with the National Iranian Oil Company starting in April.
Negotiations have already been delayed and nominations for April supplies are now due to be submitted by March 5, sources said.
Japanese buyers, which normally conclude their Iranian crude contracts in February, have not been able to complete their term contracts as they wait for what the sources said are guidelines from the government on the outcome of talks between the government and the US.
Japan is seeking an exemption from US sanctions that would exclude any company or country dealing with Iran’s central bank from the US financial system by agreeing to reduce its imports of Iranian crude oil.
The EU sanctions not only forbid the import and transportation of Iranian oil, but also ban insurance cover for vessels carrying Iranian cargoes. And because of pooling arrangements for reinsurance between the various Protection and Indemnity clubs around the world, the sanctions will have an impact on non-EU shipping.
Reports so far about the talks under way with Washington suggest that Tokyo may agree to cut its oil imports from Iran by 10-20% from a 2011 level of 310,000 b/d to ensure that Japanese banks are not excluded from the US financial system. Iran was the fourth-largest supplier of crude to Japan last year.
Japanese refiners, the main buyers of Iranian oil in Japan, are now also concerned with the possibility that they may be unable to lift Iranian crude oil if shipowners cannot get insurance cover for voyages to Iran when EU sanctions come into effect on July 1, the sources said.
Japanese shipping sources said the EU sanctions on insurance provision for tankers carrying Iranian crude oil have become a matter of concern for both oil companies and shipowners.
A chartering source at a Japanese oil company said that “every oil company” in Japan that wants to renew its term contract with Iran in April “wanted a force majeure clause” inserted to cover the shipping ban.
“They have sent this to NIOC but there has been no reply [so far],” the source said, referring to the National Iranian Oil Company.
The chartering source said the Japanese companies want to insert a clause stating that “if shipowners cannot call” on Iranian ports and “the cargo cannot be lifted,” then force majeure can be invoked.
The sources said that at least one Japanese buyer of Iranian oil may not submit a nomination for April supplies because of uncertainty about the impact of the EU insurance ban and the negotiations with Washington.–Takeo Kumagai, firstname.lastname@example.org –Pradeep Rajan, email@example.com
- Iran stops oil sales to British, French companies (mb50.wordpress.com)
- EU firms renew Iran oil deals to win sanction reprieve (mb50.wordpress.com)
- Iranian Sanctions to Limit Japanese Insurance Club’s Coverage on Oil Tankers (gcaptain.com)
- India ships will lose insurance due to Iran sanctions, may look to China – Reuters (reuters.com)
- Sanctions on Iran disrupting global oil supplies – US Department of Energy (rt.com)
- Iran ‘to accept gold for its oil’ (bbc.co.uk)
Submitted by Tyler Durden on 02/21/2012 22:59 -0500
As if the market needed another bizarro catalyst to ramp even higher courtesy of an even more pronounced drop in corporate earnings courtesy of soaring energy costs, that is just what it is about to get following news of further deterioration in the Nash equilibrium in Iran, where on one hand we learn that IAEA just pronounced Iran nuclear talks a failure (this is bad), and on the other Press TV reports that the Iran army just started a 4 day air defense exercise in a 190,000 square kilometer area in southern Iran (this is just as bad). The escalation “ball” is now in the Western court. And if Iraq is any indication, after IAEA talks “failure” (no matter how grossly manipulated by the media), the aftermath is usually always one and the same…
From The Guardian:
The UN nuclear agency has declared its latest inspection visit to Iran a failure, with the regime blocking access to a key site suspected of hosting covert nuclear weapon research and no agreement reached on how to resolve other unanswered questions.
The statement from the International Atomic Energy Agency was issued shortly after an Iranian general warned of a pre-emptive strike against any nation that threatens Iran.
“We engaged in a constructive spirit but no agreement was reached,” the statement quoted IAEA chief Yukiya Amano as saying.
The communique said that Iran did not grant requests by the IAEA mission to visit Parchin, a military site thought to be used for explosives testing related to triggering a nuclear weapon. Amano called this decision “disappointing”. No agreement was reached on how to begin “clarification of unresolved issues in connection with Iran’s nuclear programme, particularly those relating to possible military dimensions”, the statement said.
Apparently it is Iran’s fault for seeing right through the IAEA’s track record of being nothing but the catalyst for all out aggression. Here is a reminder why, courtesy of Hans Blix. And with that out of the way, we continue:
The fact that the statement was issued early Wednesday, shortly after midnight and just after the IAEA experts left Tehran, reflected the urgency the agency attached to announcing the failed outcome. The language of the statement clearly if indirectly blamed Tehran for the lack of progress.
We can already see the statements from Clinton, who will do anything to make her transition to head of the World Bank as seamless and as “deserved” as pobssible.
In the meantime, Iran is not playing possum:
Iran’s Khatam al-Anbia Air Defense Base started the four-day exercises codenamed Tharallah on Monday within an area of 190,000 square kilometers in southern Iran, with the key objective of boosting the country’s air defense near the Persian Gulf and the nation’s Bushehr nuclear power plant.
During the military drills slated in four tactical phases, the Iranian army will test and assess the operation of its surface-to-air and radar equipment, and will collect new data on the procedures.
State-of -the-art radar, artillery and missile systems as well as interceptor fighter aircraft of the Air Force will be used in the military drills.
In the first phase of the drills, the fighter aircraft of the hypothetical enemy launched attacks against local air defense forces as part of an electronic warfare exercise.
Using passive and active sensors and multilevel data collection and communications systems, the air defense forces managed to thwart the mock enemy’s measures promptly and effectively, and safeguard the country’s radar network.
Meanwhile, Iran’s Islamic Revolution Guards Corps (IRGC) Ground Forces wrapped up another drill codenamed Val Fajr in the central province of Yazd on Monday, to further enhance the combat preparedness of Iranian armed forces.
Why is Iran doing this now?
Iran maintains that the military drills are defensive in nature and meant to convey a message of peace and friendship to regional countries.
Tehran has also sent a public invitation to regional states to conduct joint naval drills with Iranian forces.
Rhetorical questions aside, we hope our readers stocked up on gasoline. Because things are about to get uglier. And by that we mean more expensive. But courtesy of hedonic adjustments, more expensive means cheaper, at least to the US government.
- Iran nuclear talks a failure, says IAEA (guardian.co.uk)
- UN nuclear agency says Iran talks have failed (cbc.ca)
- IAEA Says No Deal With Iran (myfoxny.com)
- Inspectors barred from Iran site (bbc.co.uk)
- BBC News – Iran nuclear row: UN inspectors barred from Iran site (bbc.co.uk)
(Reuters) – China’s main newspaper accused Western countries of stirring civil war in Syria and two Iranian warships docked at a Syrian naval base, underscoring rising international tensions over the near year-long crisis.
Despite pursuing a sustained military crackdown on the opposition in cities across the country, President Bashar al-Assad forged ahead with plans to hold a referendum at the end of the week.
Activists in the western city of Hama said troops, police and militias had set up dozens of roadblocks, isolating neighborhoods from each other.
“Hama is cut off from the outside world. There is no landlines, no mobile phone network and no internet. House to house arrest take place daily and sometimes repeatedly in the same neighborhoods,” an opposition statement said.
Government troops extended their control on Hama after an offensive last week that concentrated on northern neighborhoods on the edge of farmland that have provided shelter for Free Syrian Army rebels.
The rebel fighters have been attacking militiamen, known as shabbiha, while avoiding open confrontations with armored forces that had amassed around Hama.
Government forces also maintained their siege of pro-opposition neighborhoods of Homs, south of Hama on the Damascus-Aleppo highway. Opposition activists reported sporadic morning shelling of Baba Amro district.
Security forces also mounted a campaign of arrests and raids in two suburbs of Deraa city and loud gunfire was heard, activists said. The reports could not be independently verified.
The Monday actions followed a weekend which saw one of the biggest demonstrations yet in the capital as the pro-democracy uprising against Assad’s 11 year-rule neared its first anniversary.
Security forces have killed at least 5,000 people, according to human rights groups, in a campaign to crush the revolt while the Assad government says it has lost more than 2,000 soldiers and security agents in what it describes as a struggle against foreign-backed terrorists,
The conflict has also pitted Western and Gulf-led Arab powers against Assad allies Russia, China and Iran.
The former have condemned Assad for the bloodshed and called for him to step down. Beijing and Moscow say all sides are to blame for the violence and the crisis should be resolved through talks, not foreign intervention.
China’s Communist Party mouthpiece the People’s Daily, in a front page commentary on Monday, said: “If Western countries continue to fully support Syria’s opposition, then in the end a large-scale civil war will erupt and there will be no way to thus avoid the possibility of foreign armed intervention.”
A Chinese envoy met Assad in Damascus on Saturday and backed his plan to hold a referendum this coming Sunday on a new constitution which would lead to multi-party parliamentary elections within 90 days.
Syria’s official SANA news agency said about 14,600,000 people throughout the country were eligible to take part in the referendum. The West and Syrian opposition figures have dismissed the plan as joke, saying it is impossible to have a valid election amid the continuing repression.
Assad has ruled Syria for 11 years after succeeding his father Hafez on his death. The Assad family belongs to the Alawite sect, an offshoot of Shi’ite Islam, in a majority Sunni country, and there are fears the uprising could break down into a full sectarian conflict.
Meanwhile two Iranian naval ships docked at the Syrian port of Tartous on Saturday, Iran’s state-run Press TV reported. The ships were said to be providing training for Syrian naval forces under an agreement signed a year ago.
Iranian Defence Minister Ahmad Vahidi, quoted by the semi-official Fars news agency, said: “Our ships passed through the Suez canal and it is Iran’s right to have a presence in international waters.”
likely to add to Western concerns that the Syria crisis could boil over into a regional conflict if it not resolved soon.
Foreign ministers at a G20 industrialized and emerging nations meeting in Mexico were increasingly worried about whether a peaceful solution could be found.
“There is grave concern about the fact that existing structures of the United Nations have not delivered an outcome,”
Australia’s foreign minister, Kevin Rudd, told reporters in Los Cabos, Mexico.
The West has ruled out any Libya-style military intervention but the Arab League, led by Saudi Arabia, has indicated some of its member states were prepared to arm the opposition.
In Washington the senior U.S. military officer, General Martin Dempsey, said intervening in Syria would be “very difficult” because it was not like Libya.
Syria’s army is very capable, with a sophisticated, integrated air defense system and chemical and biological weapons, Dempsey said. It was also not clear who or what the fragmented opposition was exactly, he said.
A so-called “Friends of Syria” conference is scheduled to take place in Tunisia this Friday, bringing together Western and Arab powers.
Australia’s Rudd said the group aims “to place maximum pressure on president Assad to go, to end the butchery that we see day by day unfolding in Syria and to make sure we have a durable and peaceful political transition.”
(Additional reporting by Khaled Yacoub Oweis in Amman, Parisa Hafezi in Tehran; Susan Cornwell in Washington; Krista Hughes in Los Cabos, Mexico; Editing by Giles Elgood)
- Chinese newspaper accuses west of provoking civil war in Syria – The Guardian (guardian.co.uk)
- Syrian security forces increase pressure on Damascus protesters (guardian.co.uk)
- Syria’s Civil War Rages, as Alawites Press on (mideastconflicts.wordpress.com)
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“Exporting crude to British and French companies has been stopped … we will sell our oil to new customers,” spokesman Alireza Nikzad was quoted as saying by the ministry of petroleum website.
The European Union in January decided to stop importing crude from Iran from July 1 over its disputed nuclear program, which the West says is aimed at building bombs. Iran denies this.
Iran’s oil minister said on February 4 that the Islamic state would cut its oil exports to “some” European countries.
The European Commission said last week that the bloc would not be short of oil if Iran stopped crude exports, as they have enough in stock to meet their needs for around 120 days.
Industry sources told Reuters on February 16 that Iran’s top oil buyers in Europe were making substantial cuts in supply months in advance of European Union sanctions, reducing flows to the continent in March by more than a third – or over 300,000 barrels daily.
France’s Total has already stopped buying Iran’s crude, which is subject to fresh EU embargoes. Market sources said Royal Dutch Shell has scaled back sharply.
Motor Oil Hellas of Greece was thought to have cut out Iranian crude altogether and compatriot Hellenic Petroleum along with Spain’s Cepsa and Repsol were curbing imports from Iran.
Iran was supplying more than 700,000 barrels per day (bpd) to the EU plus Turkey in 2011, industry sources said.
By the start of this year imports had sunk to about 650,000 bpd as some customers cut back in anticipation of an EU ban.
Saudi Arabia says it is prepared to supply extra oil either by topping up existing term contracts or by making rare spot market sales. Iran has criticized Riyadh for the offer.
Iran said the cut will have no impact on its crude sales, warning that any sanctions on its oil will raise international crude prices.
Brent crude oil prices were up $1 a barrel to $118.35 shortly after Iran’s state media announced last week that Tehran had cut oil exports to six European states. The report was denied shortly afterwards by Iranian officials.
“We have our own customers … The replacements for these companies have been considered by Iran,” Nikzad said.
EU’s new sanctions includes a range of extra restrictions on Iran that went well beyond U.N. sanctions agreed last month and included a ban on dealing with Iranian banks and insurance companies and steps to prevent investment in Tehran’s lucrative oil and gas sector, including refining.
The mounting sanctions are aimed at putting financial pressure on the world’s fifth largest crude oil exporter, which has little refining capacity and has to import about 40 percent of its gasoline needs for its domestic consumption.
(Writing by Parisa Hafezi; Editing by David Cowell)
- Iran announces it has stopped selling crude oil to UK and France (guardian.co.uk)
- Iran denies cutting off oil exports to six EU countries (guardian.co.uk)
by Jean-Michel Berthoud, swissinfo.ch
The United States authorities have long been at odds with some Swiss banks, but could soon be turning their sights on Swiss-based commodity traders.
At issue are new economic sanctions against Iran passed by the US Congress at the end of last year, and which come into force on July 1.
Both the European Union and the US have imposed sanctions because they believe Iran is developing nuclear weapons. Iran says its nuclear progamme is for peaceful purposes only.
Switzerland has been unhappy about sanctions against Iran in the past, chiefly because it has represented US interests in Iran for over 30 years. It has also tried to mediate unofficially in the dispute over Iran’s controversial nuclear programme.
A year ago Switzerland stepped up its economic sanctions against Iran to bring them into line with those of the EU and the US, but only after coming under prolonged international pressure.
Now Switzerland finds itself being pushed into a corner once again. On January 23 the EU announced that it would step up its measures against Iran in the middle of 2012.
And on February 6 Barack Obama ratcheted up US sanctions yet further. He ordered an embargo on property and assets belonging to the Iranian government and to the Iranian central bank in the US. All Iranian financial institutions are also affected.
Switzerland stopped importing oil from Iran in 2006. According to the State Secretariat for Economic Affairs (Seco), in 2010 its imports of other items were worth only €27.4 million (SFr33 million). But its exports – mainly pharmaceuticals and machinery – were worth rather more: €562.6 million in 2010.
According to documents published by WikiLeaks, representatives of the US embassy in Bern have called on Seco to prevent the export of what are described as sensitive goods to Iran several times in the past few years. In most cases it seems that Seco immediately complied.
Seco deputy spokeswoman Marie Avet, could not confirm the truth of these leaks to swissinfo.ch, nor comment on them.
Christa Markwalder, a member of the Foreign Affairs Committee of the House of Representatives, reminded swissinfo.ch that the documents released by WikiLeaks were written for internal use by the US administration.
“I would not overrate Wikileaks,” she said. “After all, Switzerland is a sovereign state with its own foreign policy. We are also the protecting power for the US in Iran, which means we are of particular interest to the US as far as Iran is concerned.”
According to the respected German-language Neue Zürcher Zeitung newspaper, David S. Cohen, the US Treasury’s under-secretary for terrorism and financial intelligence, visited Bern at the beginning of February for talks with various members of the Swiss administration, including Seco. Cohen is responsible for the implementation of sanctions against Iran.
“No comment,” said Avet.
However, Alexander N. Daniels, public affairs officer at the US embassy in Bern, was more forthcoming. He confirmed to swissinfo.ch that Cohen had been in Bern to explain the new US measures to the foreign ministry and Seco.
They include a boycott of Iran’s central bank, which has often acted recently as a financial intermediary for oil deals, and which is also thought to finance a large proportion of the imports for the Iranian nuclear programme.
Daniels added that Cohen had had similar talks in Britain and Germany.
Although Switzerland no longer imports Iranian oil, about one third of the world’s oil deals are thought to be brokered by five Swiss-based commodity-trading giants – Glencore, Gunvor, Vitol, Trafigura and Mercuria.
Avet assured swissinfo.ch that the commodity traders would follow the sanctions in business involving the US.
She said the same question had arisen over the EU sanctions. But there the problem is that the EU has only issued a decision, and it is not yet clear how the measures are to be implemented in practice.
“So at the moment we cannot give you any more information,” she told swissinfo.ch. “But clearly, in trading and doing business with countries which have introduced these sanctions, we shall keep to them.”
Markwalder pointed out that Switzerland is a major trading centre for raw materials, in particular oil products, and some large companies were deeply involved. But she added that it is not clear to what extent they would be affected as far as oil products from Iran are concerned, if at all.
“It would actually be in the interest of these firms to obey the sanctions. Since these businesses are involved in trade all over the world, they have no interest in losing market access, licences and so on in the US.”
The Swiss government is to consult about how it should react to the strengthened EU and US measures. It will take its decision on the basis of an assessment by Seco.
Markwalder said the foreign affairs committee would also be discussing the matter.
“Switzerland would need some very good arguments if it were to break ranks with the western states – that’s to say, the EU and US,” she said.
“It’s true that we play a rather special role as a protecting power in Iran, but we still cannot afford to stand aside and provide a platform for sanctions busting.”
Jean-Michel Berthoud, swissinfo.ch
(Translated from German by Julia Slater)
- America wants sanctions to hurt only Iran (nation.com.pk)
- You: Barak urges tougher Iran sanctions (japantimes.co.jp)
- Global bank hub ready to implement Iran sanctions (seattletimes.nwsource.com)
- Iran Reveals Details Of Stuxnet Virus Attack (huffingtonpost.com)
- Russian steel bent by Iranian sanctions (rt.com)