Major Asian states rebuff U.S. call to limit Iran oil imports

By IndepthAfrica
In Asia
Jan 23rd, 2012
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Aurobinda MAHAPATRA

While military dominance remained a crucial denominator of international politics past century, oil politics has become a crucial element in current international politics, which will be further geared up in coming months and decades. This has become starkly evident as the politics of curbing Iran’s nuclear programme reveals with diplomats around the world running from capital to capital to enhance the bargaining position of their countries. The issue has become further heated with the US enacting a law on the eve of the new year enabling President Obama to sanction any country dealing with central bank of Iran. The imposition of sanction on a Chinese company and the consequent Chinese snub, the reluctance of major emerging economies such as India and China to curtail economic ties with Iran will likely impact the oil politics of the region. Amidst two extreme positions: to pressure Iran by imposing heavy sanctions and search for alternate avenues of energy such as Saudi Arabia to compensate Iran; and to leave Iran to its own course of action and decide its fate, there could be many middle areas among which exploring dialogue and negotiations under UN auspices could have been given a full thrust before exploring extremes.

Israel strongly believes that Iran case, particularly its nuclear weaponization programme can be resolved by resorting to force, whether overt or covert. The covert force is currently employed by imposing sanctions, moved recently by the US senators Mark Steven Kirk and Robert Menendez and approved by the US Senate. There is also a strategy to pose Saudi Arabia as the alternative to Iran oil. As the noted news daily of Israel Jerusalem Post on its 16 January 2012 issue emphasized Saudi Arabia can be made a front to challenge the Iranian programmes. Saudi Arabia, which is a Sunni majority country, can be made aligned to its traditional policy of hostility to Iran. It further calculated that Saudi Arabia, which is the largest producer of oil, and with its current capacity of about 10 million barrel per day, can easily manage the burden the sanctions on Iran could cause to major oil partners of Iran such as China, India, Japan, South Korea, Italy, etc. This policy dynamics heavily rests on the assumption that Iran cannot be made subject to international disarmament norms through dialogue; hence force is the only way that the bullying country can be subject to control. However, the issue of war with Iran, whether a small scale or large scale, or heavy sanctions will have far reaching consequences, as Iran’s capabilities far outweighs the capabilities of Afghanistan of 2001 or Iraq of 2003. Reportedly, crude oil price has risen above $111 per barrel on concerns about the prospective freeze on the OPEC’s second largest oil producer.

Iran has harped on its traditional friendly relations with Eurasian powers towards putting a challenging front against the US led sanctions. The major oil partners of Iran, China and India have heavy stakes in stability in Iran. China is the largest consumer of Iranian oil, and India is the third largest consumer. China has invested about $120 billion in Iran in various projects. It imports about 20 per cent of Iranian oil, which meets its 11 per cent of its energy requirement. India annually exports about 16 per cent of Iranian oil at the cost of about $12 billion, which meets its 12 per cent of its energy requirement. From 16 January to 22 January 2012, one of the teams of Indian government is visiting Tehran to find out the modalities in order to bypass US sanctions that ban any dealing with the Iranian central bank, and to find alternate ways such as exchange through bilateral currencies or barter system. Indian government appears to have adopted a calibrated policy of not going directly against the sanctions, but to devise alternate mechanism to secure Iranian oil. The Tehran Times, a prominent daily in Iran, in its issue of 14 January 2012 harped on this traditional friendship and cooperation and carried a news item with the title «Major Asian states rebuff U.S. call to limit Iran oil imports».

The allies of the US appeared to have developed cold feet over the full enforcement of the sanctions. Turkey has emphasized that it will abide the UN sanctions, and will likely continue its trade relations with Iran. Turkish Foreign Ministry spokesman Selcuk Unal observed, «Turkey does not feel it is bound by any sanctions taken unilaterally or as a group, other than those imposed by the United Nations.» Some of the European countries like Italy, Spain and Greece are heavily dependent on Iranian oil; hence sanctions may likely impact their economy. The European Union is meeting on 23 January 2012 to take a final call on the sanctions. Though the European Union may toe the US line, unless major Eurasian powers like Russia, China and India are roped in, it will be difficult to force the sanctions in their full measure. The tour of US Secretary of Commerce, Timothy Geithner to countries like China and Japan to garner their support does not appear much encouraging. While Japan appears reconciliatory to US policies, China has not bought the US argument, and particularly after the sanction on the Chinese oil trading company Zhuhai Zhenrong last week, the US-China differences will likely grow further in coming days. A Chinese Foreign Ministry spokesman, Liu Weimin commented sharply on the ban and stated that, «We express strong dissatisfaction and determined opposition.» The spokesman further observed, «Imposing sanctions on a Chinese company based on a domestic (U.S.) law is totally unreasonable, and does not conform to the spirit or content of U.N. Security Council resolutions about the Iran nuclear issue.» Chinese Premier, Wen Jiabao is currently on a visit to Arab to explore the prospects of securing Chinese interests in the region, particularly its energy security.

A nuclear weapon free world is in everybody’s interest. However, given the practical realities of the global politics, it is more the means how to achieve a global disarmament regime, than the goal itself – that has become more important in current international scenario. And this politics of nuclear disarmament is not truly global in its making, as it is dictated by various national and regional concerns, though the United Nations has emphasized on this ideal on many occasions. The UN has focused on the Iran issue, imposed sanctions, and emphasized that it must stop its nuclear weapon programme. Iranian authorities have insisted that the nuclear facilities are purely for peaceful purpose without any weaponization component attached to it. The Iranian claim may be subjected to scrutiny, but it is not mere nuclear issue that has brought the country into centre stage. Its proximity to Arab world, its policies towards the Middle East, its rich energy resources, and strategic location, its policy dynamics with other Eurasian powers, all are enmeshed together towards making policies towards Iran. Iran has the huge resources of oil and gas, it has control over the Strait of Hormuz, and its potentials as a regional power as well as its geostrategic location make Iran a crucial power in international stage.

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