Commentary Magazine


Topic: oil and gas pipelines

New Pipelines Will Reduce Tehran’s Power

Every time Iran faces increased pressure from the West to terminate its nuclear program it responds with blood-curdling threats to close the Strait of Hormuz. As I have previously argued, while Iran’s threats need to be taken seriously, they should not stop us from effective action: While Iran could disrupt traffic in the strait primarily with mines and speedboats, it could not close this important waterway, and even its disruptions would be effectively ended by the U.S. Navy within a relatively short period of time.

The Financial Times notes this morning that there is further cause not to be overly afraid of Iranian retaliation against the world’s oil supply: “Saudi Arabia and the United Arab Emirates have opened new pipelines bypassing the Strait of Hormuz, the shipping lane that Iran has repeatedly threatened to close, in a move that will reduce Tehran’s power over oil markets.” The Saudi pipeline goes to the Red Sea, the UAE pipeline to the Indian Ocean. Together, the FT notes, “The new links will more than double the total pipeline capacity bypassing the strait to 6.5m barrels a day, or about 40 percent of the 17m b/d that transits Hormuz.”

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Every time Iran faces increased pressure from the West to terminate its nuclear program it responds with blood-curdling threats to close the Strait of Hormuz. As I have previously argued, while Iran’s threats need to be taken seriously, they should not stop us from effective action: While Iran could disrupt traffic in the strait primarily with mines and speedboats, it could not close this important waterway, and even its disruptions would be effectively ended by the U.S. Navy within a relatively short period of time.

The Financial Times notes this morning that there is further cause not to be overly afraid of Iranian retaliation against the world’s oil supply: “Saudi Arabia and the United Arab Emirates have opened new pipelines bypassing the Strait of Hormuz, the shipping lane that Iran has repeatedly threatened to close, in a move that will reduce Tehran’s power over oil markets.” The Saudi pipeline goes to the Red Sea, the UAE pipeline to the Indian Ocean. Together, the FT notes, “The new links will more than double the total pipeline capacity bypassing the strait to 6.5m barrels a day, or about 40 percent of the 17m b/d that transits Hormuz.”

This is yet another reason why the West should not be intimidated by Tehran’s bluster, and why we should proceed with even more punishing sanctions in a last-ditch chance to bring a peaceful halt to the Iranian nuclear program, which, as the chief of Britain’s MI6 warned recently, could result in the production of actual nuclear weapons by 2014.

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Iran Sanctions Pass the Senate

The president in his SOTU virtually ignored the greatest national security threat of our time: the growing danger that an Islamic revolutionary regime will acquire nuclear weapons. Fortunately, the Senate didn’t wait around for the Obami to act. This report explains:

The US Senate voted Thursday to slap tough new sanctions on Iran, targeting its thirst for gasoline imports in a bid to force Tehran to bow to global pressure to freeze its suspect nuclear program.

“The Iranian regime has engaged in serious human rights abuses against its own citizens, funded terrorist activity throughout the Middle East, and pursued illicit nuclear activities posing a serious threat to the security of the United States and our allies,” said Democratic Senator Chris Dodd.

“With passage of this bill, we make it clear that there will be appropriate consequences if these actions continue,” said Dodd, the chairman of the Senate Banking Committee and a key sponsor of the legislation.

The bill will need to be reconciled with the House version. The Senate’s bill contains robust measures, the sort candidate Obama seemed to favor on the campaign trail:

It also requires that the president report to congress when non-US companies become eligible for sanctions, under a 1996 law that punishes investments of more than 20 million dollars in Iran’s energy sector.

Iran gets most of its gasoline imports from the Swiss firm Vitol, the Swiss/Dutch firm Trafigura, France’s Total, the Swiss firm Glencore and British Petroleum, as well as the Indian firm Reliance.

The measure also expands the 1996 law to cover oil and gas pipelines and tankers, and requires the administration to freeze the assets of any Iranians, including members of Iran’s Revolutionary Guard Corps, found to be active in weapons proliferation or terrorism.

It would also enable US investors, including states’ pension funds, to divest from energy firms that do business with Iran.

It would prohibit the US government from purchasing goods from firms that do business in Iran’s energy sector, or provide sensitive communications technology to Iran — a measure that could affect telecommunications giants Siemens and Nokia.

It seems that the Senate is growing impatient with China and Russia, which show no sign of joining in multilateral measures, and also with the Obami, who have made an art of foot-dragging. As Sen. Mitch McConnell pointed out, “The Iranian regime has shown no interest in limiting its nuclear ambitions. And an entire year was lost as Iran moved closer and closer to its goal.”

Let’s see what Obama does when the bill lands on his desk. He has been unable to hold the Congress at bay, no doubt to the disappointment of the pin-prick sanctions set at Foggy Bottom, which searches for those measures that pack the least punch. Obama may be yanked against his will from his engagement cocoon. But make no mistake: there is no consensus in the U.S. Congress for perpetuating the Obami’s current do-nothingism. There’s also only so much engagement fabulism that even liberal Democratic lawmakers can take. Good for them. Let’s see if it shakes them awake at the White House.

The president in his SOTU virtually ignored the greatest national security threat of our time: the growing danger that an Islamic revolutionary regime will acquire nuclear weapons. Fortunately, the Senate didn’t wait around for the Obami to act. This report explains:

The US Senate voted Thursday to slap tough new sanctions on Iran, targeting its thirst for gasoline imports in a bid to force Tehran to bow to global pressure to freeze its suspect nuclear program.

“The Iranian regime has engaged in serious human rights abuses against its own citizens, funded terrorist activity throughout the Middle East, and pursued illicit nuclear activities posing a serious threat to the security of the United States and our allies,” said Democratic Senator Chris Dodd.

“With passage of this bill, we make it clear that there will be appropriate consequences if these actions continue,” said Dodd, the chairman of the Senate Banking Committee and a key sponsor of the legislation.

The bill will need to be reconciled with the House version. The Senate’s bill contains robust measures, the sort candidate Obama seemed to favor on the campaign trail:

It also requires that the president report to congress when non-US companies become eligible for sanctions, under a 1996 law that punishes investments of more than 20 million dollars in Iran’s energy sector.

Iran gets most of its gasoline imports from the Swiss firm Vitol, the Swiss/Dutch firm Trafigura, France’s Total, the Swiss firm Glencore and British Petroleum, as well as the Indian firm Reliance.

The measure also expands the 1996 law to cover oil and gas pipelines and tankers, and requires the administration to freeze the assets of any Iranians, including members of Iran’s Revolutionary Guard Corps, found to be active in weapons proliferation or terrorism.

It would also enable US investors, including states’ pension funds, to divest from energy firms that do business with Iran.

It would prohibit the US government from purchasing goods from firms that do business in Iran’s energy sector, or provide sensitive communications technology to Iran — a measure that could affect telecommunications giants Siemens and Nokia.

It seems that the Senate is growing impatient with China and Russia, which show no sign of joining in multilateral measures, and also with the Obami, who have made an art of foot-dragging. As Sen. Mitch McConnell pointed out, “The Iranian regime has shown no interest in limiting its nuclear ambitions. And an entire year was lost as Iran moved closer and closer to its goal.”

Let’s see what Obama does when the bill lands on his desk. He has been unable to hold the Congress at bay, no doubt to the disappointment of the pin-prick sanctions set at Foggy Bottom, which searches for those measures that pack the least punch. Obama may be yanked against his will from his engagement cocoon. But make no mistake: there is no consensus in the U.S. Congress for perpetuating the Obami’s current do-nothingism. There’s also only so much engagement fabulism that even liberal Democratic lawmakers can take. Good for them. Let’s see if it shakes them awake at the White House.

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