Iran urged to return to table, as EU imposes oil embargo

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As the EU banned oil imports from Iran and imposed biting new sanctions yesterday (23 January), Europe’s foreign affairs chief called on Teheran to "return to the table" for more talks.

“Sanctions are not an end in themselves,” she told a press conference in Brussels. “The purpose of sanctions is to push Iran to come back to the negotiating table.”

The trade boycott followed a new round of measures adopted by the United States aimed at stymieing Tehran's nuclear development programme.

But Ashton suggested that authorities in Teheran could still pick up on EU confidence-building proposals tabled in Istanbul a year ago or bring new ideas of their own.

“We want to see dialogue,” she said but added that “if you look at the uranium that they have, you have to ask the question ‘what is it for?’ And when you ask that question, as I have repeatedly, you don’t get an answer.”

While no dates or times have been confirmed, some analysts expect Iran and the Western powers to resume talks in the ‘P5+1’ format in the coming weeks, comprising Germany and the permanent members of the UN Security Council.

“Consensus can only be reached through serious negotiations based on a cooperative approach and not via the wrong path of sanctions,” Iranian Foreign Ministry spokesman Ramin Mehmanparast reportedly said on 21 January.

Dire Strait

But reacting after the EU’s move, one Iranian politician renewed a threat to blockade the Strait of Hormuz, a narrow oil-exporting route vital to the global economy, while another said Tehran should cut off oil to the EU immediately.

That could particularly hurt Greece, Italy and other ailing economies which depend heavily on Iranian crude and, as a result, won as part of the EU agreement a grace period until 1 July before the embargo takes full effect.

A day after a US aircraft carrier, accompanied by a flotilla that included French and British warships, made a symbolically loaded voyage into the Gulf in defiance of Iranian hostility, the widely expected EU sanctions move was likely to set off further bellicose rhetoric in an already tense region.

Some analysts say Iran, which denies seeking nuclear weapons, could reach a ‘break out’ capacity with enough enriched uranium accrued to make them by next year.

With Israel warning it could use force to prevent that happening, the row over Tehran's plans is an increasingly pressing challenge for world leaders, not least US President Barack Obama as he campaigns for re-election in November.

However, Russia and China argue that the new sanctions are unnecessary, and China and other Asian countries may continue buying much of its oil, despite US and European efforts to dissuade them.

EU foreign ministers

Meeting in Brussels, foreign ministers from the EU, which as a bloc is Iran's second-biggest customer for crude after China, agreed to an immediate ban on all new contracts to import, purchase or transport Iranian crude oil and petroleum products.

However, EU countries with existing contracts to buy oil and petroleum products can honour them up to 1 July.

EU officials said they also agreed to freeze the assets of Iran's central bank and ban trade in gold and other precious metals with the bank and state bodies.

A member of Iran's influential Assembly of Experts, former intelligence minister Ali Fallahian, said Tehran should respond to the delayed-action EU sanctions by stopping sales to the bloc immediately, denying the Europeans time to arrange alternative supplies and damaging their economies with higher oil prices.

"The best way is to stop exporting oil ourselves before the end of this six months and before the implementation of the plan," the semi-official Fars news agency quoted him as saying.

He also reiterated that Iran could close the Strait of Hormuz, through which one-third of all oil tanker traffic passes to importers around the world.

Washington has said it will not tolerate any closure, a position underlined by Sunday's passage through the strait of a US flotilla around the carrier Abraham Lincoln, accompanied by two European frigates, Britain's Argyll and France's La Motte-Picquet.

But "if any disruption happens regarding the sale of Iranian oil, the Strait of Hormuz will definitely be closed," Mohammad Kossari, deputy head of parliament's foreign affairs and national security committee, told Fars.

Western powers described their naval movements through the Strait as routine, but they also stressed its symbolism.

"On this occasion HMS Argyll and a French vessel joined a US carrier group transiting through the Strait of Hormuz, to underline the unwavering international commitment to maintaining rights of passage under international law," Britain's defence ministry said in a statement.

In Paris, defence spokesman Thierry Burkhard said: "It's a sign to Iran if they want to consider it like that."

“We welcome [the] decision by the European Union to ban imports of Iranian crude oil and petroleum products, freeze the assets of the Iranian central bank, and take additional action against Iran's energy, financial, and transport sectors,” U.S. Department of State Secretary Hillary Rodham Clinton and U.S. Department of the Treasury Secretary Timothy Geithner said in a joint statement.

“The measures agreed today by the EU Foreign Affairs Council are another strong step in the international effort to dramatically increase the pressure on Iran” and are consistent with steps the United States is taking, the statement said.

In a separate statement issued by the White House, President Obama said he applauded “actions by our partners in the European Union to impose additional sanctions on Iran in response to the regime’s continuing failure to fulfil its international obligations regarding its nuclear program. These sanctions demonstrate once more the unity of the international community in addressing the serious threat presented by Iran’s nuclear program.”

 

OPEC's second largest producer, Iran, sells large volumes of oil to China, India, South Korea, Japan and Italy. But EU members Italy, Greece and Spain also rely heavily on Iranian oil imports. And so do Turkey, South Africa and Sri Lanka. US sanctions already forbid imports of Iranian oil.

Iran produces about 3.5 million barrels per day (bpd) of crude with another 500,000 bpd of condensate, exporting about 2.6 million bpd of which 50,000 bpd is refined products, the International Energy Agency estimates.

The top 10 buyers of Iranian crude, according to Reuters news agency, are: China, India, Japan, Italy, South Korea, Turkey, Spain, Greece, South Africa and France. Iran holds around 137 billion barrels of proven oil reserves, or nearly 10% of the world total, according to the BP Statistical Review of World Energy 2011.

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