The battle between the US/EU and China/India to control world energy resources is being fought in Iran

Middle EastUS Politics
on 48 Comments
geithner china
Timothy Geithner and Chinese Vice Premier Li Keqiang in Beijing, January 2012.
(Photo: AFP/Getty)

The brinkmanship between the West and Iran over Tehran’s nuclear program has escalated one more step in the last week. First came the European Union’s announcement of a ban on the import of Iranian oil from July 2012. It was the last straw and prompted Tehran to announce that the Iranian Majlis (parliament) was about to pass a law banning oil exports to the EU immediately (Iran’s Press TV). 

Speaking to reporters after a cabinet meeting in the capital Tehran on Sunday, [Rostam] Qasemi said less than 20 percent of Iran’s crude oil is currently being exported to Europe and that Iran has no problem in selling its oil to a market other than the EU.

Managing Director of the National Iranian Oil Company (NIOC) Ahmad Qalebani said Sunday crude oil prices could reach USD150 a barrel in the aftermath of the EU sanctions on Iran’s oil exports.

He said global economic and business blocs will experience tremendous shocks because of the embargo on Tehran and the West will suffer the most from the measure.

Meanwhile, Majlis is due to debate a bill this week that would cut off oil supplies to the EU in a matter of days, in response to the 27-member bloc’s decision to stop importing crude oil from Iran as of July.

The EU embargo was in line with a law which President Obama signed last month. The fact that, using US domestic law, the measure threatens punitive sanctions against any country doing business with Iran was too much for China and India, a long-time ally of Washington. Iranian oil is crucial for the Indian economy. India’s frustration at the Western moves to control its foreign and domestic economic policy exploded into the open. Indian officials pointedly refused to deny a report by DEBKAfile, Israel’s intelligence news service, that India would pay for Iranian oil in gold. And India’s Finance Minister Pranab Mukherjee said bluntly (The Hindu).

We (India) import 110 million tonnes of crude per year. We will not decrease imports from Iran. Iran is an important country for India despite U.S. and European sanctions on Iran.

Earlier, the US Treasury Secretary Timothy Geithner had failed in his mission to persuade Beijing to cut oil supplies from Iran. Geithner was told in Beijing that China was opposed to sanctions beyond those imposed by the United Nations (Al Jazeera).

“Iran is an extremely big oil supplier to China, and we hope that China’s oil imports won’t be affected, because this is needed for our development,” Zhai Jun, China’s vice foreign minister, told a news conference.

“We oppose applying pressure and sanctions, because these approaches won’t solve the problems. They never have. We hope that these unilateral sanctions will not affect China’s interests.”

The reaction of China and India has had a sobering effect on Europe. As the Iranian parliament debates the bill on banning oil exports to the European Union, Germany has now urged Tehran to “exercise restrain.”

The escalation of sanctions by the United States and the European Union outside the United Nations system, and attempts to force others to toe the line, amount to an open act of war. China, India and others will see them as illegal and a clear violation of their sovereign right to formulate their own policies.

Once fertile landscape of capitalism, the United States and Europe, lies barren. The race for control of energy resources has become increasingly desperate, affecting foes and friends alike. And the new cold war, involving military buildup, around Iran and the Persian Gulf has escalated to a point where China, India and Russia, three main Eastern powers, are drawn into open confrontation with America and the European Union.

The world’s only superpower is no longer credible if it cannot force others to follow its writ. But that scenario is before us. The West has become irrational in its policy and expectations. It is looking to transfer the cost of securing its own geopolitical agenda to others, who are not prepared to pay the price. We have gold and oil  prices on the rise and the risk of greater economic and military catastrophe shows little sign of receding.  

About Deepak Tripathi

Deepak Tripathi spent 23 years as a BBC correspondent and editor (1977-2000), set up the BBC bureau in Kabul in the early 1990s, was resident correspondent in Afghanistan and reported from Pakistan, Syria, Sri Lanka and India. Tripathi is the author of “Breeding Ground: Afghanistan and the Origins of Islamist Terrorism” (Potomac Books, Inc., Washington, D.C., 2011) and “Overcoming the Bush Legacy in Iraq and Afghanistan” (Potomac, 2010). His other works include “Dialectics of the Afghanistan Conflict” (Observer Research Foundation, New Delhi, 2008) and “Sri Lanka’s Foreign Policy Dilemmas” (Chatham House, London, 1989). His articles have appeared in publications such as The Economist and the Daily Telegraph of London and he is a regular contributor to a broad range of publications, among them Al-Ahram, CounterPunch, Foreign Policy Journal, History News Network (George Mason University), Palestine Chronicle and ZNet. He blogs at

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48 Responses

  1. Annie Robbins
    January 30, 2012, 2:43 pm

    excellent, so glad you have contributed this sane analysis Deepak Tripathi.

    • DeepakTripathi
      January 30, 2012, 3:17 pm

      Thank you for your words of encouragement.

      • Bruce
        January 31, 2012, 2:24 am

        Yes, Deepak.

        Thanks for presenting this. It helps to clarify what is going on.

        Hard to believe the Europeans have exposed themselves so recklessly. What were they thinking would happen?

        Please provide us more later if you can as the situation develops.

      • Theo
        January 31, 2012, 9:17 am


        Europeans are doing this very stupid thing under the tremendeous pressure from Washington, Angela Merkel and Sarkozy want to prove that they are just as tough as the americans are. The rest of the EU countries follow like a sheep, as they hang on the good will of those two politicians.
        Just like in Washington, also in Brussels, the politicians really do not care about their constituents, they try to make a name for themselves so in the coming elections they will be elected again. If those actions hurt their countries, who really cares, they cannot be made responsible for any damages they cause. Just like in the USA or any other countries.
        Although the europeans are much better educated than their american counterparts, they still do the same mistakes by electing the same politicians again and again, regardless how much damage they did during the previous period. A sheeple mentality.

  2. pabelmont
    January 30, 2012, 2:47 pm

    China and India, wishing and determined to continue to buy and receive Iranian oil, may also wish the USA and Israel NOT to attack/invade/destroy Iran.

    That’d be my guess. So we wait for Obama to explain to the American electorate that attacking Iran would be tantamount to attacking China and India (and much of the world, as the proposed Iran blockade of EU may help him explain).

    If he times it right, he may use it to defeat both Bibi and Romney-et-al.

    Meanwhile, if Israel backs down, it’ll have no-one else to attack and pulverize (to satisfy its annual need to shed innocent blood) than Gaza.

    (Might be a good time to begin to roll-back the extremely stupid Iran-punishment-laws recently put on the books. The USA’s got to stop acting as king-of-the-mountain — if it wants to stay even in the foothills. Hope the republicans learn sense in time, but you cannot depend on ideologues to learn sense. They act faith-based and ideology-based, not sense-based.)

  3. Dan Crowther
    January 30, 2012, 3:37 pm
    “Fears in the capitals of China, India and Russia have begun to grow. To break the sanctions, both Beijing and New Delhi have offered to buy Iranian oil and pay for it in gold (or in Yen). The Russians indicated that they would offer Iran a defensive shield against a full-scale attack. These are not reliable friends. India has already voted against Iran in the IAEA, and China and Russia have gone along with sanctions when they have been pressured by the US.

    Iran’s response to these provocations has been remarkably sober. As a member of the Non-Proliferation Treaty (NPT), Iran can legally develop a nuclear energy program. It has been reasonably open to investigations by the International Atomic Energy Agency, whose strongest note in its November 2011 report was that “Iran has carried out activities relevant to the development of a nuclear device.” This is not a smoking gun. On January 8, Defense Secretary Leon Panetta mused, “Are they trying to develop a nuclear weapon? No. But we know that they’re trying to develop a nuclear capability, and that’s what concerns us.” But a “nuclear capability” is not outside what is permissible for a NPT member state.”

    • Keith
      January 30, 2012, 4:47 pm

      DAN CROWTHER- An additional quote from the article you linked: “The political benefits for the US and Israel of such an attack are great. As Rami El-Amin puts it, “An attack or possible war on Iran would have the added effect of derailing the Arab revolutions and revolts and justify the continued presence of a large US military force in the oil-rich region.”

      Also, “As if by clockwork, oil prices began to rise against the dollar. But oil analysts know that this is not a long-term problem. Samuel Ciszuk of KBC Energy Economics notes, “Volumes from Iraq should be up significantly, Libya is doing very well and Saudi Arabia will increase production to compensate for some of the lost Iranian barrels.” NATO’s wars have turned the pipelines of Iraq and Libya toward Europe and the United States. They will more than compensate for lost Iranian oil.”

      In other words, the geo-political stakes are high and the situation extremely dangerous.

  4. HarryLaw
    January 30, 2012, 3:39 pm

    A very good article, Europe is cutting off its nose to spite its face, that Germany has urged Terhran to ” exercise restraint” is pitiful, the west wants Iran to roll over and not resist, any proud Nation could not capitulate over these acts of war, if they did history has shown that the US would simply move the goalposts and make demands the Iranians could not meet and the US would not expect them to meet.

    • seafoid
      January 30, 2012, 3:56 pm

      “The West has become irrational in its policy and expectations.”
      It depends on what the rules of the game are.

      I think this a good analysis of the system and how the Iran story fits into it

      “The United States, Europe, and Japan are involved in a descending spiral. Up to now, capital of generalized monopolies has retained the initiative and tirelessly pursued its sole objective: the growing accumulation of monopoly rent, which, in turn, produces the runaway growth of inequality in the distribution of income. Moreover, the growth of the latter itself is weakening. This inequality increases the impossibility of monopoly rent finding an outlet in expansion of the productive system and leads headlong into the growth of the public debt, which offers a possible outlet for the investment of excessive surplus profits. The austerity policies implemented do not permit reduction of the debt (which is their avowed objective) but, on the contrary, produce its continuous growth (which is the real, but unacknowledged, objective). Despite the victims’ protests, the electoral majorities (including the left) do not challenge the economy of the monopolies and consequently allow the descending movement to continue indefinitely. Naturally, the growing inequality calls for increasingly authoritarian political management internally and militarism on the world scale

      The only thing I would note about US militarism is how f*cking incompetent it is these days .

  5. patm
    January 30, 2012, 3:51 pm

    The world’s only superpower is no longer credible if it cannot force others to follow its writ. But that scenario is before us. The West has become irrational in its policy and expectations.

    And no rational mind in the world is going to forget the 24 standing ovations given to Benjamin Netanyahu by the Israel Firsters in the US congress.

  6. radii
    January 30, 2012, 4:43 pm

    and this battle is all in service to the profits of the fossil fuel industries – the entire conflict can be avoided by the US immediately … corporate greed which can and has co-opted governments is responsible for the suffering and death caused by these conflicts

    America can reduce its energy demand by up to 30% in the space of ONE WEEK – we need simply cut out the energy we waste (vampire electronics, turning off lights we don’t need, driving less, reduce temp settings on thermostat, use passive-solar for warmth … literally a thousand small steps) … and we can have the US gov’t engage in a massive campaign to shift us to clean-energy (it doesn’t happen because until Monsanto, Exxon, BP, etc can sell you their solar panels and fuel cells maintaining their profits and market share – you won’t see them in meaningful numbers)

  7. Keith
    January 30, 2012, 5:04 pm

    “The race for control of energy resources has become increasingly desperate, affecting foes and friends alike.”

    Good heavens, what have we here? Mondoweiss briefly considering factors other than “the lobby” to analyze events?

    • American
      January 30, 2012, 5:18 pm

      “Good heavens, what have we here? Mondoweiss briefly considering factors other than “the lobby” to analyze events?”..Keith

      Yep. These are factors that have “arisen” out of the get Iran gang bang.
      We still recognize where the main tumor started that has fed, via the world body’s blood vessel system, the other tumors that are now occurring….:)

      • Keith
        January 30, 2012, 5:58 pm

        AMERICAN- Israel is the causative factor in “The race for control of energy resources (which) has become increasingly desperate…?” Wow! It is going to take me awhile to wrap my “Chomskyite” brain around that one.

      • Annie Robbins
        January 30, 2012, 6:20 pm

        Good heavens, what have we here? Mondoweiss briefly considering factors other than “the lobby” to analyze events?

        keith, sure i suppose. if you want to make the argument this is not happening as a result of the iran sanctions be my guest. if you want to make the argument the latest tough iran sanctions (100-0 vote against potus preference) are divorced from the lobby be my guest. iow, the war for energy
        is the primary reason the US tries to control the ME. i just think there are several actors using that involvement for their own agenda, including the expansion and protection of israel. the strategy of creating fitna to control the region is not helpful and i think the state department had more diplomatic solutions before the neocon influence.

        war with iran is a bad idea. india is smart, they’ve been around for awhile and, like china, is a lot better at navigating and adapting. they formed a sort of triage w/the US and israel wrt that pipeline in baluchistan but once the deal was made for the other pipeline india adapts. they are not anti iran like we are. not that i know of anyway.

        but i don’t think anyone is claiming the US has no interest in controlling the oil in the ME. i think what people are saying is the way we have been going about it is in response to the enormous pressure from our little ally.

        so if you want to make the point the 100-0 is not associated with the lobby, just say it.

      • teta mother me
        January 30, 2012, 8:38 pm

        no, it’s really not about oil.
        US has enough natural gas to last 100 years. There’s enough oil to go around until natural gas is fully on line and alternatives can be found for foreign oil (Newt is already threatening to topple Hugo Chavez of Venezuela). Further, the oil companies really don’t want or need wars to muck up their business. Oil companies are not driving this agenda, arms merchants and bankers are.

        it’s also about psychology & ideology — from the USrael & Judeo-Evangelical Christian pov, it really IS a religious war, one that Muslims and people of the ME are fighting only defensively, just as the Palestinians are, but not offensively. It’s about whose god is in charge, and in a tie so close it’s impossible to say which is first, it’s also about maintaining the dollar as reserve currency, as you’ve noted in previous articles, Annie. Dollar reserve is a far more important issue, and the loss of dollar as reserve far more difficult to recover from, than Iranian oil. Destroying Qaddafi was not about cornering Libya’s oil, it was about ensuring that Libya’s oil is traded in dollars.

        Baby boomers will start drawing out their pensions & social security, and the dollars aren’t there. US government is scrambling to keep their shell game, of debt-backed money, afloat.

        If the threat Iran posed to the “world” were its nukes, why the pretzel logic to shut down its banks, a project that started with Stuart Levey in the Bush admin? That was not about oil, it was about money. US needs to control finance across the world and Iran threatens that; Israel wants to have the same involvement in Iranian internal affairs that it had before Khomeini took power. Israel needs to meddle in its neighbor’s affair and Iran shuts Israel out.

      • American
        January 30, 2012, 11:06 pm


        Yep, there is no race for control of oil–as a matter of fact last week on NPR there was oil anaylist guy who said two US refineries were shutting down because they weren’t needed, that US consumer demand had dropped off.
        People are curtailing their own use maybe due to price and if prices go up more they will probably cut back more on their usage more.

    • jayn0t
      January 31, 2012, 12:29 pm

      I agree. The phrase ‘race for control of energy resources’ is a bit of a Chomsky-style cliché in an otherwise sound article. Obviously, the USA and the EU are not boycotting Iran’s oil because they are racing to control it. Mondoweiss is right to ‘briefly consider’ factors other than the lobby to explain Western Middle East policy. Very briefly.

  8. American
    January 30, 2012, 5:08 pm

    “The world’s only superpower is no longer credible if it cannot force others to follow its writ. But that scenario is before us. The West has become irrational in its policy and expectations. It is looking to transfer the cost of securing its own geopolitical agenda to others”

    Faster please to the day when the world at large—just says NO to the US.

  9. Justice Please
    January 30, 2012, 6:21 pm

    “Germany has now urged Tehran to “exercise restrain.””

    WTF? Please restrain yourself, Iranians, while we strangle you financially and threaten you with war 24/7?

    Just as the US and NATO contained the Soviet Union, China/Russia/India now need to contain the US to preserve global peace. A sad state of affairs.

    • Chaos4700
      January 30, 2012, 6:32 pm

      Germany is going to look pretty stupid when Israel uses German weapons to kill Iranian civilians.

      • thetumta
        January 30, 2012, 7:31 pm

        I’m not sure “stupid” is the best adjective?

      • Chaos4700
        January 31, 2012, 1:14 am

        But it is one applicable adjective.

      • Daniel Rich
        January 31, 2012, 12:33 am

        @ Chaos4700,

        Germany already helps in killing Palestinians. [See foreign companies].

        @ MW With the EU and US financially out of breath, it will be the Chinese dragon that will have the last roar, once it opens up its $3 trillion reserves cave.

      • Chaos4700
        January 31, 2012, 9:16 am

        Oh I know, Daniel. Israel has forced the US to cut off its own arm and beat the EU with it until they submitted (not that it took much goading).

  10. W.Jones
    January 30, 2012, 6:38 pm

    “As the Iranian parliament debates the bill on banning oil exports to the European Union, Germany has now urged Tehran to “exercise restrain.””

    I am confused. The EU just decided that it will ban Iranian oil imports. Now Germany is urging Iran to show caution as it debates the bill banning Iranian exports to the EU. I am confused- why does Germany, a EU member, care about the Iranians banning oil imports to the EU since the EU has banned Iranian oil anyway?

    • Annie Robbins
      January 30, 2012, 7:31 pm

      did you see this? perhaps someone just wanted to bury Xiaodong’s statement in future google searches.

      China says war over Iran will bring disaster

      BEIJING — A top Chinese diplomat said Tuesday war over the Iranian nuclear issue would bring disaster to the world economy and urged all nations involved to exercise restraint and prevent hostilities.

      The remarks by Chen Xiaodong, a top Chinese diplomat on Middle Eastern affairs, came as Iran’s showdown with the West slid closer to confrontation as alarm over its new uranium enrichment plant and Tehran’s death sentence for a “CIA spy” raised the stakes.

    • thetumta
      January 30, 2012, 7:39 pm

      Because the weakest EU members( Greece, Portugal and Spain) get to pay the price for it. Bad credit! Actually this is not somewhere I would think Germany would want to go? Merkal just proposed today that Greece relinquish economic sovereignty as a condition of further bailouts(yet another German occupation) and now the Greeks are being told they can also expect to walk away from their only current energy supplier? Captain Roberts rides again.

      • Daniel Rich
        January 31, 2012, 12:36 am

        @ thetumta,

        Sorry, it’s Bundeskanzlerin Angela Merkel.

      • lysias
        January 31, 2012, 10:21 am

        It never occurred to me that German still uses a feminine form of “Kanzler” for female prime ministers. We don’t have that in English.

        If Ségolène Royal had been elected, or if Marine Le Pen were to be elected, would the title be “Madame la Présidente“?

    • Walid
      January 30, 2012, 7:47 pm

      “why does Germany, a EU member, care about the Iranians banning oil imports to the EU since the EU has banned Iranian oil anyway?”

      It’s simple, W. Jones, Europe wants to go ahead with America’s and Israel’s tying up of Iran, but not just yet. The ban is set to take effect on July 1st after the winter is over and after the Europeans have set themselves with other suppliers. By jumping the gun now, Iran is playing dirty, according to the Germans.

  11. Walid
    January 30, 2012, 7:58 pm

    $150 for a barrel; great news for America’s friends in Saudi Arabia, UAE, Bahrain, Iraq that need the big bucks. Good new for Iran too. Bad news for consumers everywhere.

  12. Real Jew
    January 30, 2012, 8:24 pm

    It’s unfathomable that the US and Israel is creating worldwide chaos for the sake of Israel’s QME (qualitative military edge) in the region. The manufactured showdown with Iran and the ensuing catastrophe should allow the world to see how disturbing and dangerous the US/Israel “special relationship” is becoming. Israel has no limits in their quest for ME domination and if the world just sits on their hands I’m afraid we are all in for one hell of a ride.

  13. teta mother me
    January 30, 2012, 8:44 pm

    the artwork in the background looks magnificent. wish we could see the whole thing.

  14. dbroncos
    January 30, 2012, 11:11 pm

    Scott Ritter, 1990’s weapons inspector in Iraq, explained that Iraqi military officials were reluctant to let him inspect suspected weapons sites because, in their view, the US was not looking for weapons. No, the Iraqi officers said, The US is using information provided by inspectors for reconnassaince purposes in making plans to bomb and attack Iraq. Based on the info he was asked to collect, Ritter suspected that the Iraqi military was correct: the inspection regime wasn’t about finding WMD, it was about laying the groundwork for regime change in Iraq by way of a bombing campaign and invasion.

    Iranian leadership has been reluctant about giving the IAEA’s inspectors free reign. Based on the Iraqi’s experience, who can blame them?

  15. Joseph Glatzer
    January 31, 2012, 12:24 am

    Excellent article. Thanks Phil and Adam for bringing such a talented and accomplished voice to the site

  16. Scott
    January 31, 2012, 8:00 am

    I’ve been wondering if China had a strategic reason for making Sheldon Adelson one of the richest men in the world, or it’s merely random. Could they be perceptive enough to think, the crazier the US is, the better in the long run for us? I guess no one could have foreseen the Citizens United ruling though.

  17. eljay
    January 31, 2012, 8:19 am

    In West Bank meeting, Canadian ministers take firm line with Palestinians

    It’s really great to see our bulldog icehole Foreign Affairs Minister making obeisance to Israel (Yad Vashem) and playing up Canada’s “shared common values” of religion-supremacism (“Jewish state”), occupation and collective punishment.

    • Chaos4700
      January 31, 2012, 9:20 am

      Canada might as well be Puerto Rico as far as international politics are concerned, and who sets the beat to which they march.

      • patm
        January 31, 2012, 12:06 pm

        … and who sets the beat to which they march.

        Short answer: US

        Long answer: Current pm Stephen Harper is an evangelical Christian and has a solid base of like-minded supporters for his Israel Firster policies.

        Statistics on evangelicals are hard to pin down. Here’s website using the 2001 census that suggests a very high number if you include both Protestant and Catholic evangelicals. Clearly not all of them vote Conservative.

    • patm
      January 31, 2012, 9:26 am

      701 comments so far, and the highest scores are going to the ‘we disagree’ side, eljay.

      The Globe and Mail is not a lefty rag, and for all their “chutzpah” in Ramallah, the Tories didn’t get a majority of votes from Canadians. This government is a serious embarrassment. Four more years of them. ugh!

    • Walid
      January 31, 2012, 9:29 am

      It’s really great to see our bulldog icehole Foreign Affairs Minister ”

      The Minister is only following the lead of his Prime Minister, so there is nothing surprising there and no worse than US politicians. More interesting are the 700 comments that follow the article and almost every one of them is very critical of all this ass-kissing going on.

  18. Theo
    January 31, 2012, 9:25 am

    What makes me very angry is that we discuss an attack on Iran as was it an unavoidable natural disaster and not a willful act of war by power hungry circles.
    Was not the original plan for the UNO to prevent any more wars between nation? Instead we have war after war under the umbrella and blessing of that useless organisation, usurped by the few powerful nations.

  19. Shingo
    February 1, 2012, 5:41 am

    As the Iranian parliament debates the bill on banning oil exports to the European Union, Germany has now urged Tehran to “exercise restrain.”

    That has to go down and the mother of all hypocricies. Iran must exercise restrain, while the US and the EU punishes it with unprecedented sanctions? Un f#%$ing believable!!

    The West has become irrational in its policy and expectations.

    That pretty much says it all.

    Great article Deepak. Keep them comming.

    • DeepakTripathi
      February 1, 2012, 8:02 am

      Many thanks to all those contributing to this discussion. Any comparison between me and Noam Chomsky is flattering, but the phrase “the race for control of energy resources” is certainly not a cliche. The United States would not be the leader of the “Free World” if there were no free (industrialized) world. Whether America needs Iranian oil or not is immaterial. America’s most important geopolitical interest is (has been for a century) control of energy resources and free supply of oil to junior members of the bloc it leads. With the emergence of China, India, Brazil and South Africa, the West was worried that the tide had turned against it. Bringing the energy resources under control is broadly the “race” is about. Then China, India and others can be kept in check. Unconditional US support for Israel is part of that strategy. Anybody interested might care to read my book “Overcoming the Bush Legacy in Iraq and Afghanistan,” particularly Brigadier Jim Ellery’s unguarded and revealing public admission about “heading off the tide of Easternization” (pp 4-5) after the 2003 invasion of Iraq.

      • Keith
        February 1, 2012, 4:42 pm

        DeepakTripathi- Bless you for this comment! It is a point that I have been trying in vain to make for a long time.

      • patm
        February 1, 2012, 6:41 pm

        It is a point that I have been trying in vain to make for a long time.

        I remember you carefully explaining this point to me some months ago, Keith. I thought of it when I read Depak’s essay.

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