July 7, 2015
The Myth of ‘Isolated’ Iran
Posted on Jan 18, 2012
By Pepe Escobar, TomDispatch
No wonder, because these unilateral U.S. sanctions are also aimed at Asia. After all, China, India, Japan, and South Korea, together, buy no less than 62% of Iran’s oil exports.
With trademark Asian politesse, Japan’s Finance Minister Jun Azumi let Treasury Secretary Timothy Geithner know just what a problem Washington is creating for Tokyo, which relies on Iran for 10% of its oil needs. It is pledging to at least modestly “reduce” that share “as soon as possible” in order to get a Washington exemption from those sanctions, but don’t hold your breath. South Korea has already announced that it will buy 10% of its oil needs from Iran in 2012.
Silk Road Redux
Most important of all, “isolated” Iran happens to be a supreme matter of national security for China, which has already rejected the latest Washington sanctions without a blink. Westerners seem to forget that the Middle Kingdom and Persia have been doing business for almost two millennia. (Does “Silk Road” ring a bell?)
Square, Site wide
The Chinese have already clinched a juicy deal for the development of Iran’s largest oil field, Yadavaran. There’s also the matter of the delivery of Caspian Sea oil from Iran through a pipeline stretching from Kazakhstan to Western China. In fact, Iran already supplies no less than 15% of China’s oil and natural gas. It is now more crucial to China, energy-wise, than the House of Saud is to the U.S., which imports 11% of its oil from Saudi Arabia.
In fact, China may be the true winner from Washington’s new sanctions, because it is likely to get its oil and gas at a lower price as the Iranians grow ever more dependent on the China market. At this moment, in fact, the two countries are in the middle of a complex negotiation on the pricing of Iranian oil, and the Chinese have actually been ratcheting up the pressure by slightly cutting back on energy purchases. But all this should be concluded by March, at least two months before the latest round of U.S. sanctions go into effect, according to experts in Beijing. In the end, the Chinese will certainly buy much more Iranian gas than oil, but Iran will still remain its third biggest oil supplier, right after Saudi Arabia and Angola.
As for other effects of the new sanctions on China, don’t count on them. Chinese businesses in Iran are building cars, fiber optics networks, and expanding the Tehran subway. Two-way trade is at $30 billion now and expected to hit $50 billion in 2015. Chinese businesses will find a way around the banking problems the new sanctions impose.
Russia is, of course, another key supporter of “isolated” Iran. It has opposed stronger sanctions either via the U.N. or through the Washington-approved package that targets Iran’s Central Bank. In fact, it favors a rollback of the existing U.N. sanctions and has also been at work on an alternative plan that could, at least theoretically, lead to a face-saving nuclear deal for everyone.
On the nuclear front, Tehran has expressed a willingness to compromise with Washington along the lines of the plan Brazil and Turkey suggested and Washington deep-sixed in 2010. Since it is now so much clearer that, for Washington—certainly for Congress—the nuclear issue is secondary to regime change, any new negotiations are bound to prove excruciatingly painful.
This is especially true now that the leaders of the European Union have managed to remove themselves from a future negotiating table by shooting themselves in their Ferragamo-clad feet. In typical fashion, they have meekly followed Washington’s lead in implementing an Iranian oil embargo. As a senior EU official told National Iranian American Council President Trita Parsi, and as EU diplomats have assured me in no uncertain terms, they fear this might prove to be the last step short of outright war.
Meanwhile, a team of International Atomic Energy Agency inspectors has just visited Iran. The IAEA is supervising all things nuclear in Iran, including its new uranium-enrichment plant at Fordow, near the holy city of Qom, with full production starting in June. The IAEA is positive: no bomb-making is involved. Nonetheless, Washington (and the Israelis) continue to act as though it’s only a matter of time—and not much of it at that.
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