Senior officials in the Obama Administration sent a message to Tehran in the past few days, according to which the U.S. does not intend to join Israel‘s side if it decides to attack the Iranian nuclear installations on its own, reports Israel’s second-largest paper, Yediot Aharonot.
According to the report, the U.S. sent the message to Iran in order to avoid an Iranian response military response that would target U.S. installations in the Gulf region.
The message was reportedly conveyed to Iran through two European countries that serve as a conduit of communication between Iran and the U.S. in times of crisis.
Nationalist newspaper Makor Rishon has accused Yediot Aharonot of working with the Obama Administration against the Netanyahu government’s planned strike on Iran.
According to the New York Times, senior U.S. officials have argued that Israel is “trying to corner” Obama into a military commitment that he does not yet need to make.
- U.S. Tells Iran: We Won’t Join Israeli Attack (raptureimminent.wordpress.com)
- ‘Time is Running Out’ on Iran, Netanyahu Told Visiting U.S. Rep. (raptureimminent.wordpress.com)
- White House Denies Secret Deal with Iran (judgementofamerica.wordpress.com)
(Reuters) – A U.N. watchdog report is expected to show that Iran has expanded its potential capacity to refine uranium in an underground site by at least 30 percent since May, diplomats say, adding to Western worries over Tehran‘s nuclear aims.
The U.N. International Atomic Energy Agency (IAEA) is due this week to issue its latest quarterly report on Iran’s disputed nuclear program, which the West and Israel suspect is aimed at developing bombs. Tehran denies this.
Language used by some Israeli politicians has fanned speculation that Israel might hit Iran’s nuclear sites before the November U.S. presidential vote. Washington has said there is still time for diplomatic pressure to work, but it could be drawn into any war between the two Middle East foes.
The Vienna-based diplomats, giving details on what they believe the IAEA report will show, said Iran had completed installation of two more cascades – interlinked networks of 174 centrifuges each – since the previous IAEA report in May.
They said Iran may also have added centrifuges in another part of the fortified Fordow facility, buried deep inside a mountain to better protect it against any enemy strikes, but they gave no details.
Fordow, where Iran is refining uranium to a level that takes it significantly closer to weapons-grade material, is built to house roughly 3,000 centrifuges – machines that spin at supersonic speed to increase the fissile concentration.
The May report said Iran had installed a total of 1,064 centrifuges, of which 696 were operating, in some six cascades. The diplomats said Iran has since added at least another 328, a jump of about 30 percent from the May figure, and perhaps more.
Iran says it needs this higher-grade uranium for a medical research reactor in Tehran. It is enriching uranium to lower levels at its main such plant in Natanz, where diplomats say it is also installing more centrifuges.
While the newly added centrifuges at Fordow are not yet operating, the expansion reaffirmed Iranian defiance of international demands to suspend enrichment, which can have both civilian and military uses depending on refinement level.
“There is reason to be concerned by increased tempo of enrichment, the larger stockpile of enriched uranium and, most importantly, the additional centrifuges installed in the deeply-buried facility at Fordow,” said Mark Fitzpatrick of the International Institute of Strategic Studies think-tank.
It may reinforce the belief in Israel that diplomatic and economic pressure is failing to make the Islamic Republic curb its uranium enrichment program.
Iran denies allegations it seeks a nuclear weapons capability and says all its atom work is for peaceful purposes. It has threatened wide-ranging reprisals if attacked.
Iran’s supreme leader, Ayatollah Ali Khamenei, on Thursday told heads of state from developing countries at a meeting in Tehran that the country has no interest in nuclear weapons but will keep pursuing peaceful nuclear energy.
(Reporting by Fredrik Dahl; Editing by Myra MacDonald)
- Iran expands nuclear capacity in underground bunker: sources: VIENNA (Reuters) – Iran has installed more uranium… (reuters.com)
- Iran “expands nuclear capacity underground” (thehimalayantimes.com)
- Netanyahu points to ‘more proof’ that Iran is making progress toward nuclear weapons (timesofisrael.com)
If you can take your eyes off the primary election coverage, watch Geithner. The US is engaged in a love trapezoid. The four corners are Beijing, Tehran, Tokyo, and Washington. Treasury Secretary Geithner is the Obama Administration’s front person. Track the news for the names of the other agents.
This is a very serious time. The pieces are linked. Some bullets as you watch the news flow.
1. The US faces the pressure of follow-through on Iran sanctions. Iran is an exporter of oil to Asia. Japan is dependent on imported oil. China is not self-sufficient. One part of this trapezoidal geometry is about oil.
2. Iran is feeling the heat from sanctions. The US wants to tighten them. It cannot do so without help from Asian “friends.”
3. China and Japan are each buyers of US Treasury securities. They each help finance the American fiscal deficit and the ongoing current-account deficits. They each want to diversify their reserves. They are not sellers, but they are reluctant additional buyers. This is truer for China than for Japan, but it is true in both cases.
4. China is glacially proceeding toward world reserve-currency status. It gradually allows its currency to strengthen against the dollar. It follows a policy that is fully rational for the Beijing oligarchs. It shrugs off political threats from Washington politicians (Schumer, Graham) who love to bash China while talking to their American constituents. China understands our political processes and our weaknesses. However, China also understands “realpolitik” and uses it. They learned US use of realpolitik from Nixon and Kissinger. Expect them to smile publicly but put some very intense private heat on Geithner.
5. Japan faces enormous economic pressure and sees the yen strength as now threatening. In order to weaken the yen, it must acquire other currency holdings in large quantity. (See the Cumberland website, www.cumber.com, for G4 central bank charts, and flip to those on the Bank of Japan. You will be able to observe how Japan expanded its balance sheet several years ago and subsequently contracted it. We expect them to expand it in 2012 as they seek to arrest yen strength.)
6. Japan is negotiating with China so that it may acquire reserve debt instruments denominated in Chinese currency. Beijing likes this because it is a step toward achieving world reserve-currency status. Geithner now worries, because the trend points toward a gradual and long-term weakening of the US position, as the world’s second (China) and third (Japan) largest economies maneuver their global positions.
7. Our Asian friends know that the US election cycle creates maximum vulnerability for the United States. That also makes circumstances more dangerous and raises risk profiles. Europe is of no help to us, given its internal crises.
We recall that a three-legged stool is a stable form. A four-legged stool is less stable. A four-legged stool with a trapezoidal top is least stable. Especially when one of the legs is Iran.
Watch Geithner in Asia and the news flow. Read between the lines, since the public statements will all be scripted and self-serving. Risk is high. Also, stay overweight energy. We are.
Read more: BI
- Forget The Election News: Keep Your Eye On Tim Geithner And The Love Trapezoid (businessinsider.com)
- The Chinese Yuan May Become A World Currency (mb50.wordpress.com)
- Tim Geithner Glitch In The Matrix Special: Will America Become Greece In Two Years – “No Risk Of That” (zerohedge.com)
- U.S. politics clash with reality over China currency (promoteliberty.wordpress.com)
- Wen calls for focus on common interests (upi.com)
(Reuters) – A major Chinese ship insurer will halt indemnity cover for tankers carrying Iranian oil from July, dealing a blow that narrows the insurance options for Tehran’s main export already constricted by payment barriers caused by Western sanctions.
With Western sanctions on Tehran increasing, sources at the China P&I Club told Reuters on Thursday it did not want to stand alone in the market, especially after insurers in Japan and Europe plan to either limit or ban their own coverage for tankers operating in Iran.
This is the first sign that refiners in China, Iran’s top crude buyer, may struggle to obtain the shipping and insurance to keep importing from the Middle Eastern country. Iran’s other top customers — India, Japan and South Korea — are running into similar problems, raising questions on how Tehran will be able to continue to export the bulk of its oil.
Crude oil prices are up nearly 14 percent since the start of this year on concerns that Iranian supplies may be disrupted due to Western sanctions. Brent crude traded above $123 a barrel on Thursday. <O/R>
The China P&I Club, whose members include major Chinese shipping firms Sinotrans (0368.HK) and COSCO Group COSCO.UL (600428.SS), is the first Chinese maritime insurer to confirm it will halt business with tankers operating in Iran.
“Many ship owners want to join our club and want our club to cover this risk, but considering all these regulations from the United States and the EU, I know the China P&I club will not do that,” said a Hong Kong-based official with the insurer, which provides coverage to more than 1,000 vessels.
“The China P&I club will not take the risk. We have asked our members not to go there, if they go there, they take their own risk,” the official added, who wished not to be named because he was not authorized to speak to the media.
Starting in July, European insurers and reinsurers will be barred from indemnifying ships carrying Iranian crude and oil products anywhere in the world, in line with sanctions on Tehran.
Iran sells most of its 2.2 million barrels per day of oil exports in Asia, where China, India, Japan and South Korea are the four biggest buyers.
Growing pressure by the West has led some Iranian oil buyers to cut imports, but the problem over obtaining maritime insurance could altogether halt shipments to Asian customers. Chinese imports from Iran are already down more than 21 percent in the first two months of 2012 to around 395,000 barrels per day compared to the same period last year.
Along with Russia and the Middle East, China is one of the few remaining alternatives for Asian ship owners to replace European-based coverage. It is not clear if other Chinese ship insurers also planned to follow China P&I Club and cut coverage.
“I really don’t know what will happen,” said a Beijing-based Chinese industry official. “We are talking about $1 billion in coverage (per tanker). No single insurance company can handle that.”
European insurers provide cover for the majority of the world’s oil tanker fleet. Industry officials say ship owners who still legally trade with Iran will be pressed to find sufficient, or comprehensive, alternative insurance.
“Western insurance companies, taking advantage of their market dominance, have been raising insurance costs gradually for ship owners,” said a Chinese shipping executive.
“Now they say they don’t want to provide cover to those disputed regions. China should really make its own comprehensive considerations (on this issue).”
An official with the China P&I club held out hope the European Union would decide on a last-minute easing of the sanctions. European nations are divided over the sanctions, while oil refiners, insurers and tanker owners face lost business opportunities with OPEC’s second-largest producer.
“As far as I’ve seen with these new published sanctions, it seems to us that there might be some room for compromise,” said a Beijing-based club official, who wished not to be named.
China P&I Club is not a member of the Group of International P&I Clubs, an association of customer-owned ship insurers which cover 95 percent of the world’s tankers against pollution and personal injury claims. The Chinese insurer has applied to join the club and could be taking the action on Iranian coverage to ensure it becomes a member, industry sources said.
The Japan P&I club, the only Asian-based member of the Group of International P&I Clubs, said last month it would only be able to provide a fraction of cover for tankers operating in Iran.
“It’s now non-life (insurers) and shippers who can tell us how many cargoes we will be able to ship from Iran,” said a manager from a Japanese firm that buys Iranian crude, adding that importing cargoes without insurance was unthinkable.
(Additional reporting by Aizhu Chen in Beijing, Risa Maeda in Tokyo and Meeyoung Cho in Seoul; Editing by Ed Lane)
- Japan refiners want force majeure to cover Iran oil shipping ban (mb50.wordpress.com)
- India ships will lose insurance due to Iran sanctions, may look to China – Reuters (reuters.com)
- S&P: Tankers Brace For Headwinds From Iran Trade Sanctions (gcaptain.com)
- Iran oil exports fall as sanctions take toll (business.financialpost.com)
By Fredrik Dahl
VIENNA | Mon Mar 5, 2012 7:36am EST
(Reuters) – Iran has tripled its monthly production of higher-grade enriched uranium and the U.N. nuclear watchdog has “serious concerns” about possible military dimensions to Tehran‘s atomic activities, the agency’s chief said on Monday.
Yukiya Amano, director general of the International Atomic Energy Agency, also told the IAEA’s 35-nation board of governors about the lack of progress in two rounds of talks between the Vienna-based U.N. agency and Tehran this year.
U.S. President Barack Obama and Israeli Prime Minister Benjamin Netanyahu were to meet shortly in Washington to discuss Iran, deeply at odds over the timing for possible last-resort military action against Iran’s nuclear program.
Even though Obama offered assurances of stiffened U.S. resolve against Iran before the White House meeting, the two allies remained far apart over explicit nuclear “red lines” that Tehran should not be allowed to cross.
Iran denies suspicions that it is covertly seeking nuclear weapons capability, in part by coordinating efforts to process uranium, test high explosives and revamp a ballistic missile cone to accommodate a nuclear warhead.
But its refusal to curb sensitive atomic work that can have both civilian and military applications has drawn increasingly tough U.N. and Western sanctions against the major oil producer.
During the meetings in the Iranian capital in January and February, Iranian officials stonewalled the IAEA’s requests for access to a military site seen as central to its investigation into the nature of the Islamic state’s nuclear activity.
“The agency continues to have serious concerns regarding possible military dimensions to Iran’s nuclear program,” Amano told the closed-door meeting, according to a copy of his speech.
NO CREDIBLE ASSURANCES
The IAEA “is unable to provide credible assurance about the absence of undeclared nuclear material and activities in Iran, and therefore to conclude that all nuclear material in Iran is in peaceful activities,” he added.
A report by the IAEA to member states last month said Iran was significantly stepping up uranium enrichment, a finding that sent oil prices higher on fears that tensions between Tehran and the West could boil over into military conflict.
Since the IAEA’s previous report in November, Amano said Iran has tripled monthly production of uranium refined to a fissile concentration of 20 percent – well above the level usually needed to run nuclear power plants.
Though indicated by the IAEA’s confidential report last month, it was the first time Amano spoke in public about this rapid increase in Iran’s enrichment activities, which has stoked Western and Israeli suspicions about Tehran’s nuclear agenda.
The Islamic Republic says the more highly refined uranium will replenish the dwindling special fuel stocks of a Tehran reactor that produces medicinal isotopes.
But 20 percent enrichment, experts say, also represents most of the technical effort needed to attain the 90 percent threshold required for nuclear explosions.
Much of this work is carried out deep inside a mountain at Iran’s underground Fordow facility to better shield it against military strikes, and further expansion is planned.
Despite intensive discussions with Iran, Amano said, there had been no agreement on a “structured approach” to resolve outstanding issues with its nuclear program during the talks held in January and February.
Iran “did not address the agency’s concerns in a substantive manner,” Amano said.
Making clear, however, that he would keep trying to engage Iran on the issue, he added: “Regarding future steps, the agency will continue to address the Iran nuclear issue through dialogue and in a constructive spirit.”
(Editing by Mark Heinrich)
- IAEA meets to consider action on Iran’s nuclear programme (guardian.co.uk)
- Iran Holds Air Defense Drills As IAEA Says Iran Blocks Access To Key Nuclear Site (mb50.wordpress.com)