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EU oil ban on Iran raises gulf war danger
by Staff Writers
Beirut, Lebanon (UPI) Jan 24, 2012

Australia will follow EU ban on Iranian oil imports: Rudd
London (AFP) Jan 24, 2012 - Australian Foreign Minister Kevin Rudd said on Tuesday his country would follow the European Union in banning Iranian oil imports, after talks with his British counterpart in London.

"The actions taken in Brussels yesterday on sanctions by the European Union, we in Australia will undertake precisely the same parallel action for Australia," Rudd said after talks with William Hague.

"It is not just that we endorse the action taken in Brussels for Europe; we of course will do the same for Australia.

"The reason is very clear -- the message needs to be delivered to the people of Iran, the wider political elites of Iran, as well as the government of Iran, that their behaviour is globally unacceptable."

EU foreign ministers on Monday slapped an embargo on Iranian oil exports as Western powers upped the pressure on Tehran to return to negotiations amid concerns it is edging closer to building a nuclear bomb.

Iran denies that its nuclear programme is for military purposes and furiously denounced the EU measures.

At the press conference in London, Rudd said Australia's oil embargo was likely to have only a limited impact, saying: "On the question of our own imports of Iranian oil, they have become negligible over time."

The EU, by contrast, takes 20 percent of the Islamic Republic's output.

Australia had net oil imports of about 440,000 barrels a day in 2009-10, most of it from Southeast Asia, according to the Australian Bureau of Agricultural and Resource Economics.

It produces 510,000 barrels a day itself, according to figures from the International Energy Agency (IEA) at the end of last year.

The European Union's decision to impose an embargo on Iran's oil exports is seen by Tehran as a virtual declaration of war, increasing the prospects of conflict in the strategic Persian Gulf.

Tension is sure to sharpen dangerously between now and July 1, when the EU embargo kicks in, as the confrontation between Iran and the West lurches into an unpredictable phase.

The EU decision Monday "raised the stakes dramatically in the war of wits between Iran and the West," observed analyst Ian Traynor in British newspaper The Guardian.

Growing friction over Iran's contentious nuclear program, which lies at the root of the standoff, the West's covert war of assassination and sabotage, and the deepening impact of United Nations-led sanctions imposed in 2010 are combining to heighten the prospect of a military collision.

A U.S. naval buildup, involving up to three carrier strike groups, and large-scale Iranian naval maneuvers have heightened fears of conflict, either by accident or design.

Monday's decision by the EU's foreign ministers in Brussels followed U.S. President Barack Obama's New Year's Eve unilateral action against Iran's central bank which handles the country's oil transactions.

The 27-member European Union imports some 20 percent of Iran's daily oil production of 2.6 million barrels per day.

Iran, the Organization of Petroleum Exporting Countries' second biggest producer after Saudi Arabia, can still export oil to China, India and elsewhere in Asia, its key market.

But these will be at huge discounts. That will take a sizeable bite out of Iran's oil revenues, the backbone of its already struggling economy. Iranian officials admit the punitive measures are having a serious effect, with food prices rising 40 percent in the last few weeks.

The difference between the economic sanctions in place and the oil embargo that is taking shape is that the latter will hit all levels of Iranian society. That will represent a threat to the fundamentalist clerical regime in Tehran, currently splintered in a power struggle between hard-line conservatives led by Ayatollah Ali Khamenei, the supreme leader, and a radical faction under the politically ambitious President Mahmoud Ahmadinejad ahead of 2012 parliamentary and 2013 presidential elections.

This rivalry for control of Iran's future, some analysts say, heightens the dangers that Tehran may opt to carry out its threat to close the Strait of Hormuz, the vital oil export route out of the gulf, if the West tries to cut off its oil revenue.

"It is in terms of internal Iranian politics that a potential naval conflict around the Strait of Hormuz may become a reality," analyst Babak Rahimi of the University of California, San Diego, observed in a Jan. 12 analysis for the Jamestown Foundation, a Washington think tank.

The recent U.S. allegations of an Iranian plot to assassinate the Saudi Arabian ambassador in Washington and the storming of the British Embassy in Tehran underline the fault lines running through Iran's ruling elite.

These two events "ultimately reveal … the unstable nature of Iran's faction-ridden politics and the degree to which such a volatile environment could have an unpredictable impact on Iranian decision-making, possibly leading to a military conflict in the Strait of Hormuz," Rahimi noted.

"To many in Washington, Iran's latest military posturing may seem mere bluster but … the key is to understand that behind any Iranian military actions there's a political heartbeat and at the moment the Iranian power structure, feeling threatened by domestic problems and U.S. military activities in the region, is getting ready for war," Rahimi concluded.

Some analysts say the Western alliance against Iran is primarily intended to bring about regime change in Tehran, or at least produce a regime more acceptable to regional powers like Saudi Arabia, Iran's archrival in the Middle East.

But the converse may be what emerges, setting back any prospect of a rapprochement.

Unless the elite Islamic Revolutionary Guard Corps, the most powerful military force in Iran, is pulverized in any U.S. air campaign if fighting erupts, there are those who fear it will emerge as the main beneficiary of the gulf crisis.

"The IRGC has ambitions of becoming an expansive military, economic and political conglomerate along the lines of the militaries in Pakistan and Egypt," observes analyst Brian M. Downing on Asia Times Online. "Ongoing events will help to advance those ambitions."

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'No concern' finding new buyers after EU oil embargo: Iran
Tehran (AFP) Jan 24, 2012 - Iran, OPEC's second largest producer, said it has "no concern" finding new customers for its crude after the European Union decided to impose an embargo on Iranian oil exports, local media reported.

"Iran exports only 18 percent of its oil to Europe and the rest is exported to other markets," said an Iranian oil ministry statement carried by official media late Monday night.

"Considering the market situation, there is no concern about finding new customers and the oil ministry made arrangements a long time ago to deal with any challenge," it added.

Iranian foreign ministry spokesman Ramin Mehmanparast echoed the comments by the oil ministry, warning on Monday evening that Tehran would immediately replace any country that turned its back on Iran's vast energy reserves.

The European Union on Monday slapped an embargo on Iranian oil exports as the West ramped up pressure on Tehran over its controversial nuclear drive and urged it to return to the negotiating table.

Islamic republic denies that its nuclear programme is for military purposes, insisting it is for civilian use.

EU foreign ministers agreed on an immediate ban on oil imports and a phase-out of existing contracts up to July 1. They also froze the assets of Iran's central bank while ensuring legitimate trade under strict conditions.

The bloc imported some 600,000 barrels per day of Iranian oil in the first 10 months of last year, making it a key market alongside India and China, which has refused to bow to pressure from Washington to dry up Iran's oil revenues.

The new EU sanctions meanwhile would make it even more difficult for Iran, to be paid in foreign currency for its oil exports, worth more than 100 billion dollars in 2011.

US President Barack Obama on Monday lauded the EU move to choke Tehran's oil exports, amid evidence that sanctions are beginning to bite.

"I applaud today's actions by our partners in the European Union," Obama said.

Oil prices were also up modestly Monday after the EU announced its embargo on Iran's crude exports with Brent North Sea crude for March climbing 72 cents to $110.58 a barrel in London.


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