Iran to boycott EU

Tehran is planning to pre-empt the EU's decision to boycott Iranian oil with an immediate ban on oil shipments to Europe. A bill to that effect is to be presented to the Iranian parliament on Sunday. The gambit will work in the regime's favour, commentators write, and lament the futility of the embargo.

Iran's plan to retaliate by stopping oil sales to Europe is a profitable move, writes the business paper Il Sole 24 Ore: "The real referees in the oil battle are the markets. Because it is there, behind the scenes of the governments in question, that the real battle is taking place. Tehran's threat to forestall Brussels and stop oil exports is aimed at driving up oil prices. The Iranians will sell the oil at a low price to the Chinese, who will then resell it on the market at a considerable profit. Others will follow China's example. This is how Iraq got around the embargo ten years ago. Iran has more allies than is generally assumed. The Afghan President Hamid Karzai defended Tehran vigorously during his state visit to Italy [on Wednesday]. It is quite possible that Kabul is counting on Tehran's help to sabotage the negotiations with the Taliban that the US is pushing for. We can be pretty sure that Iranian oil will flow through Afghanistan before the eyes of our soldiers. This is the way of the world - and it diverges considerably from the path charted out by the increasingly useless international agreements." (27/01/2012)

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Regardless of which side is the first to stop the oil trading, it will be the people of Iran who suffer rather than the country's nuclear programme, the liberal business paper Financial Times Deutschland points out: "As soon as the government lacks part of its oil revenues, there will be cuts in every sector. Not only teachers, doctors and the public sector are paid from the state treasury: a large part of the Iranian economy is comprised of state enterprises, meaning their employees will also no longer be able to count on regular pay cheques. … Iraq has also survived sanctions for years without the regime buckling under the pressure. A whole generation of Iraqis grew up undernourished and poorly cared for. If the decision makers in Berlin, Brussels and Washington see no alternative to imposing strict sanctions on Iran, they should at least be honest and not deny the consequences. The price will be paid by the Iranian people." (27/01/2012)

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The reaction of the Iranian regime to the oil embargo is further escalating the conflict with Europe, Matthieu Auzanneau concludes on his blog Oil Man: "Iran can block (at least temporarily) the Strait of Hormuz, that vital artery of the global economy through which a fifth of the world's crude oil passes. The European embargo has made this possibility somewhat more likely. A battle of honour may seem an attractive option to the rulers of the Islamic Republic of Iran if they feel cornered by sanctions from the West and a new popular revolt at the same time. However such a revolt seems unlikely at the moment in view of the terrible crushing of the 2009 demonstrations." (27/01/2012)

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» To the complete press review of Friday, January 27, 2012