U.S. Targets Iran's Oil Industry

[Dover]

U.S. Targets Iran's Oil Industry
January 8, 2007
By KIM MURPHY, Los Angeles Times

LONDON -- As the United States wages a very public battle against Iran's quest for nuclear power, Washington quietly is gaining ground on another energy front: the oilfields that are the Islamic republic's lifeblood.

Iran's oil industry has raked in record amounts of cash during three years of high oil prices. But a new U.S. campaign to dry up financing for oil and natural gas development poses a threat to the republic's ability to continue exporting oil over the next two decades, many analysts say.

The campaign comes at a moment of unique vulnerability for Iran's oil industry, which also faces challenges from rising domestic energy consumption, international isolation, a populist spending spree by President Mahmoud Ahmadinejad and trouble closing contracts with foreign oil companies - a recipe for potential disaster in a nation with one of the world's largest reservoirs of oil.

..snip..


The efforts by the U.S. and its allies over the past few months to persuade international banks and oil companies to pull out of Iran threaten dozens of oil and gas projects.

In addition, banks are no longer granting letters of credit for delivery of some supplies, ministry officials say. And as nations such as Japan begin to back out of Iran oil development under U.S. pressure, the government in Tehran is being forced to dig deeply into its own reserve funds to get crucial new projects off the ground....cont'd

http://www.courant.com/news/nationworld/hc-iran0108.artjan08,0,3176986.story?coll=hc-headlines-nationworld

[Joanne98]

1. Putin isn't going to be happy about this.

[PFunk]

2. Neither will China.

[Kelvin Mace]

3. More welfare for oil companies

Right. Keep additional Iranian oil of the market, which translates into higher prices and bigger profits for BigOil.

[Strelnikov_]

4. Related Paper

Sanctions supposedly intended to counter a 'rogue' nuclear program can have impacts on other 'undesirable' behavior.

From:

Hysteria Over Iran and a New Cold War with Russia:
Peak Oil, Petrocurrencies and the Emerging Multi-Polar World
By William Clark
December 10, 2006


From the Iranian perspective, the US attempts to cut-off financial transactions utilizing the dollar, euro, yen and pound sterling may have pushed Iran to make the unusual decision to offer oil sales in its own domestic currency. The long-anticipated petroeuro option is far more attractive from a monetary and international trade perspective, since the money supply and liquidity of the Iranian rial is rather limited. On the other hand, from Tehran’s perspective there is logic to this decision, as Iran is trying to circumvent the US dollar and associated banking apparatus. Using the rial as a petrocurrency is likely a purposeful strategy designed to insulate Iran from US attempts to seize its oil revenue by clandestine efforts outside the legal framework of the UN Security Council.

Washington is now attempting to counter this stratagem by blacklisting Iran’s largest bank, Bank Saderat. Washington claims this is necessary to prevent Iran from “abusing” the global banking system, including providing financial support to Hezbollah and Hamas. In a recent interview, US Deputy Secretary of the Treasury Robert Kimmitt (pictured) was interviewed by Der Speigel, where he warned European banks to “Be very, very careful with Iran.” <97> The inherent difficulty of Washington’s ongoing strategy was acknowledged in the Der Speigel article with a quote by the president of the Association of German Banks, Klaus-Peter Muller, who stated: “one can hardly expect banks to terminate long-cultivated business relationships based on vague-suspicions.”

The hypocrisy of Washington’s strategy is that the main financiers of Osama bin Laden/Al Qaeda sponsored terrorism have long been wealthy members of the Saudi elite, including former leading Saudi banker Khalid bin Mahfouz. Notably, the Bush administration has not engaged, at least publicly, in any punitive policies towards Osama bin Laden’s powerful Saudi-based financiers. It is too early to know if this smart sanctions plan will work, but it should be noted that futures exchanges assume a free flow of capital across national borders, and this may not be possible if Iran is put under sanctions or the threat thereof. Of course, the US may also wish to create the impression of a looming war against Iran, therefore hindering Iran’s ability to attract foreign capital or promote foreign participation on its oil exchange. In addition, futures exchanges require an efficient banking system. The Iranian currency is not fully convertible, and the establishment of an exchange
that trades international contracts would likely require that the rial become fully convertible.

. . .

Summarizing, if Iran’s oil bourse becomes even moderately successful, Iran and other oil exporting nations will be able to circumvent the petrodollar system that props up US deficit spending. Moreover, if they can set their own price via a Persian Gulf oil marker, they could potentially undercut oil prices set by London and/or New York. Lastly, by offering oil trades in a more valuable and stable currency such as the euro, Iran could siphon off customers from the New York and London exchanges and make them far less powerful in the global political economy. Although not discussed by the US corporate media, as the world’s spare oil capacity evaporates before the onset of Peak Oil, the economic bargaining power of the major oil and gas exporters is inexorably increasing, opening the door to yet other non-dollar petrocurrencies. Russia is actively pursuing this option.

[Dover]

9. U.S. said expected to sanction Iranian bank (Reuters, Jan. 9)

WASHINGTON (Reuters) -- The United States is expected to announce sanctions against Bank Sepah, a big Iranian commercial bank, under a presidential order aimed at freezing the assets of proliferators of weapons of mass destruction and their supporters, several U.S. officials and diplomats said on Monday.

The action is expected to be announced soon, the officials told Reuters, speaking on condition of anonymity.

Undersecretary of Treasury Stuart Levey, who leads U.S. efforts to combat terrorist financing and money laundering, has called a news conference for Tuesday to make an announcement on Iran but his office declined to disclose details.

The new sanctions -- under an executive order President George W. Bush signed in June 2005 -- reflects the administration's determination to use U.S. authorities to pressure Iran to abandon its nuclear program, something Tehran has repeatedly insisted it will not do.

U.S. officials told Reuters they hope such action will set an example for other countries as to how a recently passed U.N. Security Council resolution imposing sanctions on Iran should be implemented...cont'd

http://www.cnn.com/2007/POLITICS/01/09/us.iran.reut/index.html

[HuffleClaw]

5. WHO do they think they are fooling?

big whup. so bush allies won't help iran. others will be happy to take their place.

they aren't fooling anyone.

[Scurrilous]

6. U.S. expected to announce sanctions on major Iranian bank

<snip>

"The United States is expected to announce sanctions against Bank Sepah, a big Iranian commercial bank, under a presidential order aimed at freezing the assets of proliferators of weapons of mass destruction and their supporters, several U.S. officials and diplomats said on Monday.

The action is expected to be announced soon, the officials told Reuters, speaking on condition of anonymity.

Undersecretary of Treasury Stuart Levey, who leads U.S. efforts to combat terrorist financing and money laundering, has called a news conference for Tuesday to make an announcement on Iran but his office declined to disclose details.

The new sanctions, under an executive order President George W. Bush signed in June 2005, reflect the administration's determination to use U.S. authorities to pressure Iran to abandon its nuclear program, something Tehran has repeatedly insisted it will not do.

U.S. officials said they hope such action will set an example for other countries as to how a recently passed UN Security Council resolution imposing sanctions on Iran should be implemented."

http://www.haaretz.com/hasen/spages/811345.html

[Scurrilous]

16. U.S. names Iranian bank a weapons proliferator

<snip>

"The U.S. Treasury Department named Iran's state-owned Bank Sepah as a proliferator of weapons of mass destruction and said on Tuesday it was urging other countries to help block Iran's nuclear program.

The action against Bank Sepah means no U.S. companies or citizens can do business with it, and any of its assets that come under U.S. jurisdiction will be blocked.

"Bank Sepah is the financial linchpin of Iran's missile procurement network and has actively assisted Iran's pursuit of missiles capable of carrying weapons of mass destruction," said Stuart Levey, Treasury's Under Secretary for Terrorism and Financial Intelligence.

Levey said the United States was urging other nations to join the bid "to deny financial assistance to Iran's nuclear and missile programs," as supported by a recently passed United Nations Security Council resolution.

In addition to Bank Sepah, the Treasury order names Sepah International Plc, a wholly owned subsidiary of Bank Sepah in Britain and the bank's chairman and director, Ahmad Derakhshandeh, as weapons proliferators."

http://www.washingtonpost.com/wp-dyn/content/article/2007/01/09/AR2007010900503.html

[doublethink]

7. Related? Iranian Oil Bourse Trial Run .....

Iran oil exchange to have short-term trial
Sunday, January 07, 2007 - ©2005 IranMania.com

- Initiation of oil bourse is in line with the Kish Charter approved by the Economic Council earlier, the head of Tehran Stock Exchange Organization noted, MNA reported.

According to the Clause 58 of Securities Laws, an oil exchange may at first be established on one-year basis, Ali Salehabadi continued, setting the terms on three and five-year bases.

“In the short-term, trading will be held in petrochemical products such as various types of engine oils or gas condensate,” he said, adding that final approval lies with the Oil Ministry which is yet to give the go-ahead.

The organization is merely an overseeing body and is not in charge of running or regulating this sort of business, he stipulated further.

http://www.iranmania.com/News/ArticleView/Default.asp?NewsCode=48648&NewsKind=Current%20Affairs

note: The day the Iranian Oil Ministry gives the go ahead on this ..... along with the fact that China/Russia/EU Country's/etc ... have been cutting their reserves from dollars to euros ... well .... ? Peace.

K&R. :kick:

[Vidar]

8. Gotta drive up oil prices again.

[plant]

10. I heard there is now talk about Iraq's oil

being divied out to BP and some US co's too.

[Dover]

11. Iran: Sanctions, geopolitics and the economy

Iran: Sanctions, geopolitics and the economy
BY MATEIN KHALID

7 January 2007

EVER since Jimmy Carter invoked the International Emergency War Powers Act to freeze revolutionary Iran’s assets with global banks on Wall Street and the City of London, Washington has used economics as a strategic weapon against the Ayatullah’s regime.


Yet George W Bush’s doomed imperial adventure in Iraq was a geopolitical windfall for Teheran at a time when $60 crude oil has boosted its central bank reserves to $50 billion, the highest since the Shah lost his Peacock Throne in 1979. Iranian petrodollars, in turn, financed the arms, cash war chest and logistics of Hezbollah, Hamas, the Alawite Baathist regime in Syria and the Iraqi Shia militias and death squads. In the zero–sum game of Middle East politics, Iran has challenged Washington’s role as the regional superpower and gendarme of the Gulf.

As the UN sanctions bite, Israel threatens to launch a preemptive air strike against Iran’s nuclear facilities, Iraq degenerates into the Arab world’s grisliest sectarian slaughterhouse and Lebanon faces a proxy civil war with Teheran as a principal actor, war in the Middle East seems imminent. Yet economic sanctions could, paradoxically, arrest the countdown to war if they force Iran to accept the geopolitical status quo, akin to Ayatullah Khoemini’s decision to accept a ceasefire on the Shatt al Arab in 1988. Unlike Israel or Pakistan, Iran’s nuclear program is not an existential strategic deterrent but a component in President Ahmedinijad’s domestic political legitimacy as he invoked Persian nationalism against his clerical rivals, led by Supreme Leader Khameni.

The Shia clerical establishment of Iran, with its bazaari merchant constituencies and its monopolistic grip on power, has no interest in an apocalyptic, suicidal military confrontation with the West. Power, not theology, has defined Iran’s calculus of realpolitik ever since the rule of President Hashemi Rafsanjani. The new President is no Qum powerbroker and it thus compelled to invoke Persian nationalism, anti–Zionist rhetoric and even the Hidden Imam from the Shia theological cosmos to buttress his revolutionary credentials and camouflage his economic failure...cont'd

http://www.khaleejtimes.com/DisplayArticleNew.asp?xfile=data/opinion/2007/January/opinion_January24.xml§ion=opinion&col=

[modrepub]

12. How does a Bankrupt Nation

have so much influence over the banking industry???

[Gregorian]

13. BUSH Targets Iran's Oil Industry

Everywhere the article says U.S. it should say Bush.

What is happening is not due to the United States per se. We've been hijacked by the Bush crime syndicate.

Nobody who supports this war even knew where Iraq was before this all began. They were too busy watching COPS or Survivor.

[LynnTheDem]

14. A fine example of why "they" hate us.

Such upstanding "morality" America has.

[hunter]

15. Well, China finances the United States.

And they compete for oil.

This could get ugly.

A lot of posturing going on here.