Posts Tagged ‘Iran sanctions’

Khashoggi, Erdogan’s verbal assaults add to talk of ‘instability’ in Saudi Arabia

November 7, 2018

 

Nahum Barnea, a leading Israeli commentator, writing in Yedioth Ahronoth in May (in Hebrew), set out, unambiguously, the ‘deal’ behind Trump’s Middle East policy:

In the wake of the US exit from JCPOA [which occurred on 8 May], Trump, Barnea wrote, will threaten a rain of ‘fire and fury’ onto Tehran … whilst Putin is expected to restrain Iran from attacking Israel using Syrian territory, thus leaving Netanyahu free to set new ‘rules of the game’ by which the Israel may attack and destroy Iranian forces anywhere in Syria (and not just in the border area, as earlier agreed) when it wishes, without fear of retaliation.

Authored by Alastair Crooke via The Strategic Culture Foundation

Saudi Crown Prince says he loves working with the US president and that a lot has been achieved in the Middle East due to their partnership. (AFP/File)

This represented one level to the Netanyahu strategy: Iranian restraint, plus Russian acquiescence to coordinated Israeli air operations over Syria.

 “There is only one thing that isn’t clear [concerning this deal]”, a senior Israeli Defence official closest to Netanyahu, told Ben Caspit, “that is, who works for whom? Does Netanyahu work for Trump, or is President Trump at the service of Netanyahu … From the outside … it looks like the two men are perfectly in sync. From the inside, this seems even more so: This kind of cooperation … sometimes makes it seem as if they are actually just one single, large office”.

There has been, from the outset, a second level, too:

This entire ‘inverted pyramid’ of Middle East engineering had, as its single point of departure, Mohammed bin Salman (MbS).

It was Jared Kushner, the Washington Post reports, who “championed Mohammed as a reformer poised to usher the ultraconservative, oil-rich monarchy into modernity. Kushner privately argued for months, last year, that Mohammed would be key to crafting a Middle East peace plan, and that with the prince’s blessing, much of the Arab world would follow”. It was Kushner, the Post continued, “who pushed his father-in-law to make his first foreign trip as president to Riyadh, against objections from then-Secretary of State Rex Tillerson – and warnings from Defense Secretary Jim Mattis”.

Well, now MbS has, in one form or another, been implicated in the Khashoggi murder.  Bruce Riedel of Brookings, a longtime Saudi observer and former senior CIA & US defence official, notes“for the first time in 50 years, the kingdom has become a force for instability” (rather than stability in the region), and suggests that there is an element  of ‘buyer’s remorse’ now evident in parts of Washington.

The ‘seamless office process’ to which the Israeli official referred with Caspit, is known as ‘stovepiping’, which is when a foreign state’s policy advocacy and intelligence are passed straight to a President’s ear – omitting official Washington from the ‘loop’; by-passing any US oversight; and removing the opportunity for officials to advise on its content.  Well, this has now resulted in the Khashoggi strategic blunder.  And this, of course, comes in the wake of earlier strategic ‘mistakes’: the Yemen war, the siege of Qatar, the Hariri abduction, the Ritz-Carlton princely shakedowns.

To remedy this lacuna, an ‘uncle’ (Prince Ahmad bin Abdel Aziz) has been dispatched from exile in the West to Riyadh (with security guarantees from the US and UK intelligences services) to bring order into these unruly affairs, and to institute some checks and balances into the MbS coterie of advisers, so as to prevent further impetuous ‘mistakes’.  It seems too, that the US Congress wants the Yemen war, which Prince Ahmad consistently has opposed (as he opposed MbS elevation as Crown Prince), stopped. (General Mattis has called for a ceasefire within 30 days.) It is a step toward repairing the Kingdom’s image.

MbS remains – for now – as Crown Prince. President Sisi and Prime Minister Netanyahu both have expressed their support for MbS and “as U.S. officials contemplate a more robust response [to the Khashoggi killing], Kushner has emphasized the importance of the U.S.-Saudi alliance in the region”, the Washington Post reports. MbS’ Uncle (who as a son of King Abdel Aziz, under the traditional succession system, would be himself in line for the throne), no doubt hopes to try to undo some of the damage done to the standing of the al-Saud family, and to that of the Kingdom.  Will he succeed?  Will MbS accede now to Ahmad unscrambling the very centralisation of power that made MbS so many enemies, in the first place, to achieve it?  Has the al-Saud family the will, or are they too disconcerted by events?

And might President Erdogan throw more wrenches into this delicate process by further leaking evidence Turkey has, if Washington does not attend sufficiently to his demands.  Erdogan seems ready to pitch for the return of Ottoman leadership for the Sunni world, and likely still holds some high-value cards up his sleeve (such as intercepts of phone calls between the murder cell and Riyadh).  These cards though are devaluing as the news cycle shifts to the US mid-terms.

Time will tell, but it is this nexus of uncertain dynamics to which Bruce Reidel refers, when he talks of ‘instability’ in Saudi Arabia.  The question posed here, though, is how might these events affect Netanyahu’s and MbS’ ‘war’ on Iran?

May 2018 now seems a distant era.  Trump is still the same ‘Trump’, but Putin is not the same Putin. The Russian Defence Establishment has weighed in with their President to express their displeasure at Israeli air strikes on Syria – purportedly targeting Iranian forces in Syria.  The Russian Defence Ministry too, has enveloped Syria in a belt of missiles and electronic disabling systems across the Syrian airspace. Politically, the situation has changed too: Germany and France have joined the Astana Process for Syria. Europe wants Syrian refugees to return home, and that translates into Europe demanding stability in Syria. Some Gulf States too, have tentatively begun normalising with the Syrian state.

The Americans are still in Syria; but a newly invigorated Erdogan (after the release of the US pastor, and with all the Khashoggi cards, produced by Turkish intelligence, in his pocket), intends to crush the Kurdish project in north and eastern Syria, espoused by Israel and the US. MbS, who was funding this project, on behalf of US and Israel, will cease his involvement (as a part of the demands made by Erdogan over the Khashoggi murder). Washington too wants the Yemen war, which was intended to serve as Iran’s ‘quagmire’, to end forthwith.  And Washington wants the attrition of Qatar to stop, too.

These represent major unravelings of the Netanyahu project for the Middle East, but most significant are two further setbacks:

First, the loss of Netanyahu’s and MbS’ stovepipe to Trump, via Jared Kushner, by-passing all America’s own system of ‘checks and balances’.  The Kushner ‘stovepipe’ neither forewarned Washington of coming ‘mistakes’, nor was Kushner able to prevent them. Both Congress and the Intelligences Services of the US and UK are already elbowing into these affairs.  They are not MbS fans.  It is no secret that Prince Mohamed bin Naif was their man (he is still under ‘palace arrest’).

Trump will still hope to continue his ‘Iran project’ and his Deal of the Century between Israel and the Palestinians (led nominally by Saudi Arabia herding together the Sunni world, behind it).  Trump does not seek war with Iran, but rather is convinced of a popular uprising in Iran that will topple the state.

And the second setback is that Prince Ahmad’s clear objective must be other than this – instability in, or conflict with, Iran. His is to restore the family’s standing, and to recoup something of its leadership credentials in the Sunni world, which has been shredded by the war in Yemen – and is now under direct neo-Ottoman challenge from Turkey.  The al-Saud family, one may surmise, will have no appetite to replace one disastrous and costly war (Yemen), with another – an even greater conflict, with its large and powerful neighbor, Iran.  It makes no sense now.  Perhaps this is why we see signs of Israel rushing to hurry Arab state normalisation – even absent any amelioration for the Palestinians.

Nehum Barnea presciently noted in his May article in Yediot Ahoronot:

“Trump could have declared a US withdrawal [from the JCPOA], and made do with that. But under the influence of Netanyahu and of his new team, he chose to go one step further. The economic sanctions on Iran will be much tighter, beyond what they were, before the nuclear agreement was signed. “Hit them in their pockets”, Netanyahu advised Trump: “if you hit them in their pockets, they will choke; and when they choke, they will throw out the ayatollahs””.

This was another bit of ‘stovepiped’ advice passed directly to the US President. 

His officials might have warned him that it was fantasy.  There is no example of sanctions alone having toppled a state; and whilst the US can use its claim of judicial hegemony as an enforcement mechanism, the US has effectively isolated itself in sanctioning Iran: Europe wants no further insecurity. It wants no more refugees heading to Europe. Was it Trump’s tough stance that brought Kim to the table?  Or, perhaps contrarily, might Kim have seen a meeting with Trump simply as the price that he had to pay in order to advance Korean re-unification?  Was Trump warned that Iran would suffer economic pain, but that it would nonetheless persevere, in spite of sanctions? No – well, that’s the problem inherent in listening principally to ‘stovepipes’.

https://www.zerohedge.com/news/2018-11-06/unraveling-netanyahu-project-middle-east

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UN court ruling on US sanctions shows Tehran is ‘right’: Iran

October 3, 2018

Tehran welcomed on Wednesday a ruling by the UN’s top court ordering Washington to suspend sanctions on humanitarian goods, as a “clear sign” that “Iran is in the right”.

The ruling by the International Court of Justice “once again shows that the US government… is day by day becoming more isolated,” the foreign ministry said in a statement.

© AFP/File | US President Donald Trump and Iranian counterpart Hassan Rouhani faced off at the UN in September. Tehran has hailed a ruling by the UN’s top court ordering Washington to suspend sanctions on humanitarian goods, as a “clear sign” it is “in the right”

It said the court had found that the crippling sanctions reimposed by Washington after it abandoned a landmark 2015 nuclear deal between major powers and Tehran were illegal.

“World public opinion and all independent countries will, with peace of mind, strive… to keep and carry out the JCPOA,” it added, using the official acronym for the agreement.

Foreign Minister Mohammad Javad Zarif called the court ruling “another failure for sanctions-addicted US government and victory for rule of law”.

“Imperative for int’l community to collectively counter malign US unilateralism,” he added in a tweet.

AFP

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Sanctions on Iran: International Court of Justice rules against US

October 3, 2018

The International Court of Justice (ICJ) has ordered the US to ease sanctions it re-imposed on Iran after pulling out a nuclear deal last year.

Siding with Tehran, it said exports of “humanitarian” goods, such as food and medicines, should be allowed.

Judges listen to lawyers for Iran at the International Court of Justice (27 August 2018)

The US argued the court had no jurisdiction in the case as it concerned its national security.

The rulings of the ICJ – which is based in The Hague – are binding but the court has no power to enforce them.

It is the main judicial organ of the UN and settles legal disputes between member states. But both nations have in the past ignored the court’s rulings.

Announcing the decision on Wednesday, the court’s president, Judge Abdulqawi Yusuf, said: “The court considers that the United States must remove, by means of its choosing, any impediment (…) to the free exportation to the territory of Iran of goods required for humanitarian needs.”

Mohammad Javad Zarif praises European efforts to preserve the nuclear deal

Iran’s economy has slumped since US President Donald Trump ordered that sanctions be reinstated in May. Its currency, the rial, has dropped sharply.

A curb on ‘economic warfare’?

Analysis by Anna Holligan, BBC News, The Hague

The order calls for a partial easing of punitive measures. It covers medicines, medical supplies and equipment, food, agricultural products and aviation safety equipment.

This is essentially the first time international judges have ruled on what’s been described as a case of “economic warfare”.

It is a provisional measure issued in response to Iran’s urgent request ahead of the second round of sanctions scheduled to be reinstated next month.

The decision could encourage European companies, which ceased trading with Iran for fear of falling foul of President Trump, to reconsider their position, specifically those dealing in the humanitarian items outlined by the judges.

What were the arguments in court?

Iran said the sanctions violated the 1955 Treaty of Amity, Economic Relations, and Consular Rights between Iran and the US, which grants the ICJ jurisdiction over disputes.

US-Iran sanctions: What do they mean?

It also said the reasons cited by President Trump for re-imposing the sanctions were unfounded because the International Atomic Energy Agency (IAEA) had repeatedly confirmed that Iran was complying with the terms of the 2015 nuclear accord signed by Tehran and six world powers.

US lawyers argued that the ICJ should not have jurisdiction and that Iran’s assertions fall outside the bounds of the treaty.

The ICJ has ruled previously that the 1955 treaty is valid even though it was signed before the 1979 Revolution in Iran, which saw the US-backed shah overthrown and heralded four decades of hostility between the two countries.

Why did the US abandon the nuclear deal?

The 2015 accord saw the Islamic Republic limit its controversial nuclear activities in return for relief from international sanctions.

But Mr Trump said the deal had “failed to achieve the fundamental objective of blocking all paths to an Iranian nuclear bomb” and did not deal with Tehran’s “malign activities, including its ballistic missile programme and its support for terrorism”.

In an attempt to compel Iran to agree to a new accord, the president reinstated sanctions that targeted the Iranian government’s purchase of US dollars, Iran’s trade in gold and other precious metals, and its automotive sector.

In November, a second batch of potentially more damaging sanctions will be re-imposed on Iran’s oil and shipping sectors as well as its central bank.

The other parties to the deal – the UK, France, Germany, China and Russia – have pledged to abide by their commitments under the existing deal. But many major firms have already pulled out of Iran.

BBC News

https://www.bbc.com/news/world-middle-east-45729397

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UN court orders US to stop Iran sanctions

October 3, 2018

The International Court of Justice has ruled that US sanctions on medicine must be dropped immediately. The US has contested the right of the court to intervene in matters between Washington and Tehran.

    
The International Court of Justice

The UN’s top court ordered the United State to lift certain sanctions on Iran on Wednesday. The International Court of Justice (ICJ) ruled that sanctions against humanitarian goods were a danger to public safety.

The ICJ unanimously decided that Washington “shall remove by means of its choosing any impediments arising from the measures announced on May 8 to the free exportation to Iran of medicines and medical devices, food and agricultural commodities.”

US sanctions on spare parts for aircrafts were also ordered to be lifted because of the “potential to endanger civil aviation safety in Iran and the lives of its users.”

Iran filed a lawsuit against the US at the Netherlands-based court in July, arguing that the sanctions violate a decades-old bilateral treaty and are wrecking Iran’s economy and the value of its currency.

The ruling is preliminary as hearing the full case is a process that could take years.

Lawyers for the Trump administration, which reimposed the sanctions in May after pulling the US out of Tehran’s landmark nuclear accord, argued that the sanctions were justified by national security concerns and that the ICJ did not have the jurisdiction to rule on them.

Decisions made by the ICJ are binding and cannot be appealed, but the court has no means of enforcing its rulings.

Iran’s foreign ministry welcomed the ruling, saying: “The decision proved once again that the Islamic Republic is right and the US sanctions against people and citizens of our country are illegal and cruel.”

es/aw (AP, AFP)

https://www.dw.com/en/un-court-orders-us-to-ditch-iran-sanctions/a-45737767

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India, Iran and Afghanistan hold tripartite meeting to consolidate cooperation; Chabahar Port, US sanctions discussed

September 12, 2018

India, Iran and Afghanistan held their first tripartite meeting on Tuesday in Kabul during which implementation of the Chabahar port project and a host of other issues including ways to deepen counter-terror cooperation were discussed, officials said. The Indian delegation was led by Foreign Secretary Vijay Gokhale while the Iranian team was headed by Deputy Foreign Minister Abbas Araghchi. Afghan deputy foreign minister Hekmat Khalil Karzai chaired the meeting.

Image may contain: 3 people, people standing

Iran’s president Rouhani at Chabahar port

“The meeting focused on consolidating economic cooperation, including Chabahar, as well as enhancing cooperation on counter-terrorism, counter-narcotics, and continuing support to the peace and reconciliation process that is led and owned by Afghanistan,” the three countries said in a joint-statement. It said the three sides agreed to hold the next round of consultation at an appropriate time in India in 2019. Sources said the possible impact of the US sanctions on the Chabahar port project also figured in the meeting. The port in the Sistan-Balochistan province on Iran’s southern coast is being developed by India and Iran are also coming under the US sanctions on Iran.

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During the two-plus-two talks in Delhi last week with the US, India apprised the American delegation about the strategic importance of Chabahar, particularly for enhancing trade with war-ravaged Afghanistan. The port is easily accessible from India’s western coast and is increasingly seen as a counter to Pakistan’s Gwadar Port, which is being developed with Chinese investment and is located at distance of around 80 km from Chabahar. The first phase of the Chabahar port was inaugurated by Iranian President Hassan Rouhani in December.

Image may contain: 3 people, people smiling

File Photo: Narendra Modi, Hassan Rouhani and Hamid Karzai. AP

According to Afghan president Ashraf Ghani’s spokesman Haroon Chakhansuri, a series of discussions have been held over the past few months with Iranian and Indian officials regarding the possibility of a waiver on a section of Chabahar Port. In the second phase of sanctions, scheduled to come into effect in November, Iran’s ports and crude oil exports will be affected. Both the countries will also draw hope from the fact that the US last month granted a waiver for the Azerbaijan natural gas pipeline, DNA reported.

The Chabahar port is being considered a gateway to golden opportunities for trade by India, Iran and Afghanistan with central Asian countries besides ramping up trade among the three countries in the wake of Pakistan denying transit access to New Delhi. Under an agreement signed between India and Iran in May 2016, India is to equip and operate two berths in Chabahar Port Phase-I with capital investment of $85.21 million and annual revenue expenditure of $22.95 million on a 10-year lease.

The discussions come against the backdrop of proposed US sanctions on investments in Iran following Washington’s pull-out from the 2015 Iran nuclear deal. Alice Wells, principal deputy assistant secretary for the bureau of South and Central Asian affairs had said in Washington on Monday that the US would continue discussions on the Iran sanctions with India, Mint reported.

“An informational conversation was held during the 2+2 dialogue in New Delhi last week on Chabahar and the US has taken it under advisement. Talks on the matter between the two sides were ongoing and no decision had been taken on the matter,” Wells said, according to the report. The sanctions put into effect from 4 November were designed to bring Tehran to book and not penalize India, she clarified.

According to Indian officials, India was also looking at Iran handing over the Shahid Beheshti port to it for operation in the coming weeks. India is also looking at supporting the development of Chabahar- Zahedan Rail line that will aid the transport of goods to the Afghan border. India plans to use the port as a gateway to the International North-South Transport Corridor.

Meanwhile, earlier on Monday, India and Afghanistan agreed to enhance cooperation under the New Development Partnership as part of which New Delhi had announced taking up 116 “high impact community developmental projects” in the war-torn country. The decision to scale up cooperation and collaborate on infrastructure and high impact community development projects was taken at the third meeting of the Joint Working Group on Political and Security Cooperation (JWGPSC) between India and Afghanistan in Kabul, a Ministry of External Affairs (MEA) statement said.

India had announced taking up 116 “high-impact community developmental projects” in 31 provinces of Afghanistan after a meeting between External Affairs Minister Sushma Swaraj and Ghani in New York in September 2017. The outcome of the first and second meetings of the were also reviewed and assessed positively on Monday at the meeting co-chaired by Karzai and Gokhale.

“Both sides stressed the need to continue working together towards a stable, peaceful and prosperous region that is free from terrorism and extremism,” the statement said. Both sides discussed Indian assistance to Afghanistan and regional issues of mutual interest, and agreed that bilateral cooperation strengthens political and economic stability in the region. India and Afghanistan also agreed to strengthen security cooperation and the Indian side reiterated its support for an Afghan-led and Afghan-owned peace and reconciliation process, the statement said.

The two sides also expressed satisfaction over the successful completion of several development projects such as the Afghan Parliament building, Storay Palace, and Afghan-India Friendship Dam. It was also decided that the fourth meeting of the JWGPSC would be held in New Delhi on mutually convenient dates in 2019.

With inputs from PTI

https://www.firstpost.com/world/india-iran-and-afghanistan-hold-tripartite-meeting-to-consolidate-cooperation-chabahar-port-us-sanctions-discussed-5166211.html

Updated Date: Sep 12, 2018 12:03 PM

Iraq PM Abadi caught in the crossfire as Iran sanctions pressure grows

August 13, 2018

Iraqi officials denied on Sunday that Prime Minister Haider Al-Abadi had canceled a trip to Iran as Tehran’s allies in Iraq ramped up pressure on him over US sanctions.

Al-Abadi has faced a fierce campaign of criticism since last week over his decision to stick to new economic sanctions imposed on Iran by Washington.

Defying the sanctions would put Iraqi banks on a US blacklist and stop the sale of Iraqi oil, while making Baghdad unable to pay its external and domestic financial obligations, including salaries, Iraqi officials said.

Al-Abadi last week issued instructions to stop the financial transactions of state-owned banks with Iran and halt the import of any materials from Iran that required payment in US dollars, financial officials told Arab News.

Al-Abadi has come under fire after last week issuing orders to abide by the sanctions. (Reuters)

But the prime minister’s decision to abide by the US sanctions may cost him his political future and end his ambition to win a second term as prime minister.

The campaign of criticism led by Iran-backed forces in Iraq started when Al-Abadi said on Tuesday that his government had to abide by US sanctions “to protect the interests of the Iraqi people.”

But it escalated Sunday after an Iraqi government official told AFP that Iran had refused to welcome Al-Abadi on a visit to discuss the common interests of the two countries.

The unnamed official said Al-Abadi was planning to visit Iran on Tuesday, but Iranian officials expressed they were uncomfortable about the visit, so it was canceled.

Both Al-Abadi’s office and the Iranian foreign ministry denied that there was even a visit planned.

“We did not announce a visit to Iran and Turkey, so how can we announce its cancellation?” one of Al-Abadi’s senior staff   told Arab News.

“Until this moment, we have not been

informed (by Al-Abadi) that there is a visit scheduled for the coming days.”

All Iraqi political forces and Iranian-backed armed factions have expressed their rejection of Al-Abadi’s decision to abide by the sanctions in recent days.

The most aggressive statement came from Sayed Mujtaba Al-Hosseini, a representative of the Supreme Leader of Iran, Ayatollah Ali Khamenei, in the holy Iraqi city of Najaf.

Image result for ayatollah ali khamenei, photos

The critcism, which was circulated on Sunday, could mean Al-Abadi’s loss of any possible Iranian support for his second term.

Husseini described Al-Abadi’s position as “irresponsible” and incompatible with Iran fulfilling its positions in its defense of Iraq against Daesh.

“Before everything, we are sorry for the prime minister’s position, which shows his weakness and expresses his psychological defeat toward America,” he said.

Iraqi political forces that triumphed in May’s parliamentary election have been waiting for ratified results, so they can conclude their negotiations to build the biggest coalition, which could then form the next government.

Iraq is a battlefield for international powers in the region, particularly America and Iran since the 2003 US-led invasion that toppled Saddam Hussein.

No stable government could be formed without the approval of the two nations. Al-Abadi openly enjoys the support of the US.

“Everyone knows that Abadi needs the support of both Iran and US to win a second term. One of them is not enough,” Abdulwahid Tuama, an Iraqi analyst told Arab News.

“Abadi did not manage the crisis in a clever way this time, and all signs indicate that he lost any chance to get the Iranian support.”

It’s Trump Sanctions, Not OPEC, That’s Boosting Oil

June 17, 2018

The threat of Iran’s oil output disappearing is driving up prices.

A support vessel flying an Iranian national flag sails alongside the oil tanker Devon.

Photographer: Ali Mohammadi/Bloomberg

As OPEC oil ministers prepared to meet in Vienna later this week, President Trump fired another twitter-shot across their bows. But it is his decision to slap sanctions back on Iran that is the real driving force behind the rising price of oil.

The U.S. president has accused OPEC of being “at it again” for the second time in as many months through his favored 280-character diplomatic channel. Quite what “it” is, he has never specified.

I am always a bit confused about what people actually mean when they accuse the group of artificially raising the price of oil. OPEC doesn’t set it — and hasn’t done so for more than 30 years.

Perhaps the president is railing at the fact that some members of the group have spent millions of dollars creating production capacity that they aren’t using. Seen in another light, that surplus is a vital safety valve in the event of a sudden loss of supply — such as the one that occurred when U.S.-led forces invaded Iraq in 2003, or when Western-backed rebels overthrew Libya’s Moammar Al Qaddafi in 2011. OPEC’s spare capacity has been used to compensate for sudden supply disruptions more often than America’s strategic petroleum reserve.

There is no reason that OPEC should pump as much oil as President Trump, or anyone else, wants. The organization exists to look after the interests of its members. Some of them might see appeasing the United States as being in their best interests. Others clearly do not.

It was less than two years ago that candidate Trump’s energy adviser Harold Hamm told Bloomberg Businessweek that OPEC was “irrelevant.” A little over a month later the same Harold Hamm said it was “high-time” for the irrelevant OPEC to agree on a production freeze to raise prices.

No-one expects politicians, or their advisors, to be consistent. And oil at $67 a barrel is very different to oil at $46. Back then, U.S. shale oil production was on the slide and needed a savior. It found one in Saudi Arabia’s then Deputy Crown Prince Mohammed Bin Salman and oil minister Khalid Al-Falih, who reversed the kingdom’s “pump-at-will” policy and began to set oil prices on the path to recovery.

Now Saudi Arabia is once again at the forefront of a group of OPEC countries urging other members to do as America wishes — this time by raising output. The about-face comes hard on the heels of Al-Falih’s assertion just eight weeks ago that OPEC’s market-balancing job wasn’t yet done and that output restraint needed to be prolonged.

What changed in that eight weeks? The outlook for the availability of Iranian oil. Trump’s decision to pull out of the nuclear deal and re-impose sanctions will reduce the volume of crude available from the country by an unknown amount.

I have said from the outset that the amount of Iranian oil that will be forced off the market will be more than when sanctions were previously in force — even without the EU bans on purchases that accompanied U.S. curbs last time around. Analysts are now starting to ratchet up their forecasts of the volume that could be lost.

The curbs will be more extensive than under President Obama — targeting Iran’s exports of condensates as well as crude oil — and waivers will be harder to come by. Tanker owners and insurers may already be reacting to the imposition of sanctions, even before they come into effect.

It is the fear that the world is about to lose as much a million barrels a day of Iranian crude oil exports by the end of the year, and possibly another 500,000 barrels from Venezuela, that has really driven oil prices higher — not OPEC.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Julian Lee at jlee1627@bloomberg.net

To contact the editor responsible for this story:
Edward Evans at eevans3@bloomberg.net

https://www.bloomberg.com/view/articles/2018-06-15/vienna-group-meeting-2018-can-t-solve-opec-s-underlying-problem

Iran sanctions shadow falls on smaller German banks

May 27, 2018

Germany’s biggest lenders have shied away from business with Iran after past penalties for breaching US sanctions, but smaller banks have leapt on opportunities afforded by the nuclear deal rejected by Donald Trump.

There are just months to go until a November deadline issued by Washington after the US president abandoned a hard-fought agreement that loosened business restrictions on the Islamic Republic in exchange for Tehran giving up its pursuit of nuclear weapons.

But some firms plan to press on in their dealings with Iran despite the looming threat of penalties.

“We will continue to serve our clients,” for now, said Patrizia Melfi, a director at the “international competence centre” (KCI) founded by six cooperative savings banks in the small town of Tuttlingen in southwest Germany.

The centre, which supports companies operating in sensitive markets like Iran or Sudan, has seen demand “rising sharply in the last few years, from firms listed on the Dax (Germany’s index of blue-chip firms), from all over Germany and from Switzerland,” she added.

© AFP / by Jean-Philippe LACOUR | Deutsche Bank is one of two of Germany’s biggest banks that avoids Iran completely after being slapped with harsh fines in 2015 over their dealings there

German exports to Iran have grown since the nuclear deal was signed in 2015, adding 15.5 percent last year to reach almost 2.6 billion euros ($3.0 billion) after 22-percent growth in 2016.

Such figures remain vanishingly small compared with Germany’s 111.5 billion euros in exports to the US — its top customer.

Nevertheless, the KCI will “wait and see what the sanctions look like” before turning away from Iran, Melfi said.

– Walking on eggshells –

Already, firms dealing with Tehran must take great care not to fall foul of US restrictions.

Transactions are carried out in euros, and the KCI does not deal with businesses that have American citizens or green card resident holders on their boards.

What’s more, products sold to Iran cannot contain more than 10 percent of parts manufactured in the US.

One of the most important inputs for the business is “courage among our managers” given the high risks involved, Melfi said.

Germany’s two biggest banks, Deutsche Bank and Commerzbank, avoid Iran completely after being slapped with harsh fines in 2015 over their dealings there, with Deutsche alone paying $258 million in penalties.

DZ Bank, which operates as a central bank for more than 1,000 local co-op lenders, is withdrawing completely from payment services there, a spokesman told AFP.

That left KCI to seek out the German branch of Iranian state-owned bank Melli in Hamburg.

Even that linkage could break if Iran’s biggest business bank appears on a US list of barred businesses as it has before.

Meanwhile, among Germany’s roughly 390 Sparkasse savings banks, business with the regime is mostly limited to producing documents linked to export contracts.

“We will be looking even more closely at those” in the future, a person familiar with the trade told AFP.

Elsewhere in the German economy, the European-Iranian Trade Bank (EIH) founded in 1971 is another conduit to Tehran.

Also based in Hamburg, it for now remains “fully available to you with our products and services”, the bank assures clients on its website, although “business policy decisions by European banks may result in short term or medium term restrictions on payments”.

– ‘Effectively protected’ –

Neither does the Bundesbank (German central bank) believe that much has so far changed for business with Iran.

“Only the European Union’s sanctions regime will be decisive”, if and when it is changed, the institution told AFP.

Any payment involving an Iranian party would have to be approved by the Bundesbank if things return to their pre-January 2016 state.

German banking lobby group Kreditwirtschaft has called on Berlin and other EU nations to clarify their stance — and to make sure banks and their clients are “effectively protected against possible American sanctions”.

KCI’s Melfi said time is running out for EU governments to act.

“Many firms just want to stop anything with Iran, since they can’t calculate the risk of staying,” she noted.

On Friday for the first time since the Iran nuclear deal came into force in 2015, China, Russia, France, Britain and Germany gathered in Vienna — at Iran’s request — without the United States, to discuss how to save the agreement.

by Jean-Philippe LACOUR
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AFP

Oil Prices Continue to Rise Fueled by Iran Deal Concerns

May 7, 2018

President Trump faces Saturday deadline to extend or end waiver on Iran sanctions

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Oil futures rose sharply in Asian trading Monday, hitting new 3 1/2-year highs as the U.S. benchmark hovered around $70 a barrel and a deadline to renew waivers of U.S. sanctions on Iran loomed.

Concerns over the possibility President Donald Trump won’t renew the waivers, which expire Saturday, have pushed crude prices higher—including by nearly 2% on Friday—even as the U.S. dollar has rebounded. A stronger dollar often pressures prices of oil and other dollar-denominated commodities.

On the New York Mercantile Exchange light, sweet crude for June delivery recently was up 1% at $70.40 a barrel in the Globex trading session. July Brent crude on London’s ICE Futures exchange rose 1.1% to $75.66.

West Texas Intermediate, the U.S. benchmark, entered Monday’s trading having gained in 15 of the past 20 trading days. Over the same period, the WSJ Dollar Index rose some 2.5%.

Brent futures, the global benchmark, have climbed in nine of the past 12 weeks.

Oil prices continue their march upward.
Oil prices continue their march upward. PHOTO:AGENCE FRANCE-PRESSE/GETTY IMAGES

The sanctions on Iran were lifted under a 2015 agreement among a group of world powers aimed at curbing Tehran’s nuclear activities.

“We think that it is highly likely that President Trump will exercise the exit option despite the recent best efforts of European leaders to fix the nuclear deal,” said Helima Croft, head of commodity strategy at RBC Capital Markets.

She said the impact on the oil market from such an action would depend on the terms of the withdrawal from the deal. A more gradual reinstatement of U.S. sanctions would likely allow foreign refiners to slowly reduce their Iranian imports, said Ms. Croft.

With outages in major oil producer Venezuela and member nations of the Organization of the Petroleum Exporting Countries firmly adhering to continuing output caps, a potential reduction in Iranian production if U.S. sanctions are reimposed would be yet another factor offsetting record American crude output, analysts said.

Escalated tensions with Iran could restrict the ability of oil to pass through the Strait of Hormuz out of the Persian Gulf, said Stuart Ive, private client manager at OM Financial. He said the hard positions taken by the U.S. and Iran meant “the Iranian nuclear agreement is already all but dead.”

Write to Biman Mukherji at biman.mukherji@wsj.com

 https://www.wsj.com/articles/oil-prices-continue-to-rise-fueled-by-iran-concerns-1525673680

Europe, Iran to back nuclear deal as Trump decision looms

January 11, 2018

 

EU diplomatic chief Federica Mogherini. (AP)

BRUSSELS: Europe and Iran are to put on a united front in support of the landmark 2015 nuclear deal at talks in Brussels Thursday as Washington mulls reimposing sanctions on Tehran.

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The European Union and the foreign ministers of Britain, Germany and France will unite to defend the accord, which curbed Iran’s nuclear ambitions in return for the relaxing of punishing sanctions but which US President Donald Trump has repeatedly criticized and threatened to leave.
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While EU diplomatic chief Federica Mogherini wants to keep the nuclear issue separate from other contentious issues with Tehran, Iranian Foreign Minister Mohammad Javad Zarif will also face tough questions about recent anti-government protests which left 21 people dead.
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Trump, who in October refused to certify Iran was complying with the deal but stopped short of withdrawing from it, is expected to decide on Friday whether to extend waivers on nuclear-related sanctions against Tehran.
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The EU and other world powers have repeatedly warned it would be a mistake to abandon the deal, thrashed out with Iran over 12 years by the US, Britain, France, China, Germany and Russia.
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British foreign minister Boris Johnson called the deal “a crucial agreement that makes the world safer.”
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“It is vital that we continue to work with our European partners to preserve the Iran deal, and with it the security and prosperity it is bringing to the people of Iran and the world,” he said.According to two US sources, Trump had not made a decision by Wednesday, while Johnson told the British parliament on Tuesday that London was urging “our friends in the White House not to throw it away.”
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Iran, which on Monday warned the world to get ready for Washington abandoning the deal, has said if the US walks away from the agreement it is ready to give an “appropriate and heavy response.”
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Zarif, who traveled to Moscow on Wednesday to seek Russian support, criticized what he called Washington’s “destructive policy.”
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“The United States must understand the unity of the international community over the nuclear deal and change their position as a result,” Zarif said, urging world powers to “resist the hostile actions” of the Trump administration.
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The International Atomic Energy Agency (IAEA) has repeatedly said Iran is keeping up its side of the agreement, most recently in November.
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after talks in Moscow on Wednesday Zarif tweeted a warning.
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“Everyone agrees it is imperative that ALL live up to their obligations under JCPOA. IAEA has verified Iran’s full compliance, but continuation will depend on full US compliance,” he wrote. JCPOA is the official name for the deal.Mogherini, who played an important role in crafting the nuclear accord, has vowed to preserve the deal and has lobbied US lawmakers in Washington.
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US Congress is working on a way to punish Iran for its continuing ballistic missile program and meddling in Middle East conflicts such as Yemen and Syria.
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Johnson said these issues would be “an important part of our conversation” in Brussels on Thursday — along with the recent unrest in Iran.
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“I will be making it clear to Foreign Minister Zarif, on the subject of the recent protests in Iran, that the right to peaceful demonstration within the law is central to any truly thriving society,” Johnson said.
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The 28-member EU has condemned the “unacceptable loss of human lives” in the protests and stressed that peaceful protest and freedom of expression are “fundamental rights.”