Timothy Geithner and Chinese Vice Premier Li Keqiang in Beijing, January 2012.
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.