When OPEC meets later this month for its ministers’ summit, price-hawk Iran will confront a new reality – for the first time since the beginning of international sanctions against the regime in Tehran, oil prices are in free fall.
In the last few days, Brent Crude is finally trading below $100, a barrel benchmark. Crude traded at the New York Mercantile Exchange was trading today around $83 a barrel.
For Iran, this is bad news.
For years, the regime was able to somewhat cushion the combined impact of externally imposed sanctions and self-inflicted economic mismanagement thanks to high oil prices. No more.
The head of the CRIF, the head of the umbrella group representing French Jewry, is coming under criticism for saying a victory for Socialist Party presidential candidate Francois Hollande is a potential disaster for Israel. Richard Prasquier stated in an opinion column published last week in Haaretz that anti-Israel elements within the Socialist Party will be able to exert disproportionate influence in a Hollande administration.
While Prasquier said Hollande had expressed friendship for Israel, he left little doubt that the strong ties between the Jewish community and incumbent President Nicolas Sarkozy left some Jews worried about the consequences if the polls are right and the Socialist wins on Sunday. Of special concern was the fact that while Sarkozy has been the most ardent European opponent of a nuclear Iran, Hollande is untested on the issue and will govern with the support of leftist foes of Israel who will play a large role in his government.
While President Obama and Secretary of State Clinton have attempted to talk tough about the ongoing negotiations with Iran over its nuclear program, by agreeing to the P5+1 talks that were launched last week in Istanbul, the administration has set in motion a process that is clearly lurching out of their control. The Iranians scored a not insignificant victory by convincing the West to wait several weeks until the next meeting in late May. And as Laura Rozen reported in Al Monitor last week, EU foreign policy chief Catherine Ashton, a fierce critic of Israel, is in clear charge of the negotiations and may be steering the talks toward a deal that will fall well short of an agreement that would force an end to the Iranian program. But a key element to the creation of such an unsatisfactory conclusion to this process will be to convince the West that the Iranians are genuinely interested in a deal. And as Rozen notes today, the Islamist regime is working hard to give onlookers the impression that accommodation is their priority.
If all this sounds to good to be true it’s because it almost certainly is. The spin coming out of Tehran is aimed at creating false confidence in their willingness to abandon their nuclear ambitions and sign a deal that would allow the Europeans, as well as Iran’s Russian and Chinese friends to pretend that worries about the ayatollahs getting their hands on a nuke are put to rest. But since the Iranians have already successfully played this cat and mouse game with Western negotiators before, the only reasonable conclusion to be drawn from the “positive signals” coming out Iran is that the regime is aiming at driving a wedge between the United States and the other members of the P5+1 delegation.
It’s all well and good for the Obama administration to brag about how its diplomatic approach has brought European states onboard with sanctions on Iran, but as the White House grants waivers for countries to give them more time to disentangle themselves from their Iran investments, German companies are showing they have no intention to leave the Iranian market. Quite the contrary, German firms are using the space granted them by the Obama administration to flout sanctions and embrace the Iranian market further.
The German NGO “Stop the Bomb” has outed several German firms which participated in last week’s 17th annual Iran International Oil, Gas, Refining, and Petrochemical Exhibition. According to their press release:
Among the German companies that have confirmed their participation at the Iran Oil Show to Stop the Bomb are for example Bopp & Reuther, Helmke, Hova and Schauenburg. The companies Herrenknecht and Pepperl + Fuchs are also present at the Iran Oil Show, according to the exhibition’s homepage.
Secretary of State Hillary Clinton announced today that the United States was granting exemptions to Japan and several European countries from sanctions that are intended to prevent the sale of Iranian oil. However, Clinton represented the waivers as part of the administration’s effort to tighten the vise on Iran. This makes some sense, at least as far as Europe is concerned. The European Union has already forbidden its member nations from signing new oil contracts with Iran and has pledged itself to ending existing obligations by July 1. As for Japan, Clinton said the exemption was a reward for their efforts toward reducing their dependence on Iranian oil.
If these exemptions really part of an integrated strategy aimed at tightening the noose around Iran’s economy then it is fair to say that President Obama is keeping his word to implement the sanctions Congress passed last year over his objections. However, it is worth noting that the administration has history of non-enforcement of sanctions on Iran as well as the possibility that such waivers will be used as a way to prolong negotiations with Iran over its nuclear program. There is also the likelihood that the exemptions have more to do with a desire to stabilize oil prices than a campaign to force the ayatollahs to renounce their nuclear plans.