Prisoners of political myths

Iran has halted its oil sales to France, Britain and some other EU countries in retaliation for the eralier announced EU embargo on Iranian oil, due to take effect on July 1. By stopping its oil sales, Tehran is hoping to prevent EU countries from finding alternative oil supplies after the embargo comes into force. Experts say that slapping oil sanctions on Iran is tantamount to an economic suicide because the EU will be unable to resolve its energy supplies-related problems in the wake of the imposition of the sanctions.

Iranian Oil Minister Rostam Ghasemi said, on his part, that his country is “absolutely not concerned over the impending EU sanctions,” adding that Iran is the OPEC’s second largest crude oil supplier after Saudi Arabia. 

Iran sells about 20 percent of its oil exports to the EU countries, with China, South Korea, India and Japan currently being major consumers of Iranian oil. Unlike the US and the EU, these four countries are unwilling to slap any sanctions on Iran. Nikolai Tokarev, head of the Russian oil company Transheft, said that by introducing an oil embargo against Iran the EU commits an ‘economic hara-kiri.’  He was echoed by Konstantin Simonov, head of the Moscow-based National Energy Security Foundation, who cast doubt on the EU’s ability to significantly increase its own oil production after the embargo enters into force.

"The EU is in hot water, Simonov says. Introducing a full oil embargo against Iran will be a tricky task, he adds, citing Greece, Italy and Spain which are almost certain to continue to buy Iranian oil because of the ongoing economic crisis there. It seems that the EU pins hopes on Saudi Arabia which Brussels believes will substantially increase oil production in the future. The hopes hold no water given that Iran has repeatedly threatened to close the Strait of Hormuz in a bid to prevent Saudi Arabia’s oil and Qatar’s liquefied natural gas from being supplied to international markets." 

Moscow-based expert Sergei Penkin says, in turn, that in an event of the EU embargo, Iran can compensate its damages at the expense of China and other customers of Iranian oil.

"One of the world’s largest energy consumers, China is all but sure to continue to bolster its energy ties with Iran, Pikin says. The international community, the US and the EU will, of course, ratchet up pressure on China which I think is unlikely to change its mind given Beijing’s permanent push for pursuing an independent foreign policy," Pikin concludes.

ANNOUNCER: It appears that like the US, the EU becomes a prisoner of political myths created by hawkish politicians, analysts say, referring to Iran’s nuclear program whose military component has yet to be proved. As for the sanctions allegedly aimed at prodding Tehran to abandon its atomic program, they may well backfire and ride roughshod over interests of ordinary people in the US and the EU. 

Meanwhile, Paris, London and Washington are mulling releasing oil from their strategic reserves as part of efforts to bring down high gasoline prices – something that especially infuriates Americans and that will be a major factor for the Obama administration to consider during the upcoming presidential elections in the US.  European politicians will also face political risks if the oil embargo on Iran comes into force, analysts say, lamenting the fact that the ‘let’s-continue-to-put-pressure-on-Iran’ mantra prevails over common sense.

By Ilya Kharlamov

The Voice of Russia, April 11, 2012