THE ROVING
EYE Europe at war with
Iran By Pepe Escobar
No one ever lost money betting on the
foolishness of European Union (EU) politicos. And
if you are an oil trader, rejoice - all the way to
the bank; as expected, EU foreign ministers -
meekly following the Barack Obama administration -
have given a green light for a full Iranian oil
embargo.
The embargo applies not only to
new contracts but also existing contracts - to be
voided by July 1, and includes extra sanctions
targeting Iran's central bank and petrochemical
exports to the EU. It's always crucial to
remember the embargo - a de facto European
declaration of economic war - was forcefully
proposed in the first place by the neo-Napoleonic
"liberator" of Libya, France's President Nicolas
Sarkozy. The official EU excuse for the
economic war is "serious
and deepening concerns over the Iranian nuclear
program".
It didn't help that Moscow had
already warned the EU to stop acting as mere pawns
of Washington - once again shooting themselves in
their Ferragamo-clad feet. The Russians know all
there is to know about how this embargo may
horribly backfire.
The EU defends its
strategy - or economic war - as the only way to
avert "chaos in the Middle East". Yet the economic
war may end up sparking the full-blown war it is
theoretically trying to avert; talk about an array
of unintended consequences waiting in the wings.
And that leads us straight to the Strait
of Hormuz drama. Tehran has repeatedly said that
it would close Hormuz only if - and we should
repeat - only if Iran is blocked from exporting
its oil. This would represent a deathblow to the
Iranian economy - totally dependent on oil exports
- not to mention the regime controlled by Supreme
Leader Ayatollah Ali Khamenei. Regime change is
the real agenda of Washington and its European
poodles (see The
myth of 'isolated Iran' Asia Times Online,
January 19) - but that cannot be spelled out to
global public opinion.
The tracks of my
tears Of the top five Iranian oil
importers, four are in Asia; two BRICS members
(China and India), plus US allies Japan and South
Korea. It's fair to argue that all these importers
would severely blame the Americans/Europeans for
their provocations (in fact some are already doing
that) should Iran consider blocking - or
activating a series of mines - in the Strait of
Hormuz.
The EU for its part imports around
600,000 barrels of oil a day from Iran; that's
about 25% of Iran's daily exports of 2.6 million
barrels. The top EU importer is Italy. Other key
importers are Spain and Greece. All these Club Med
countries, to put it mildly, are currently mired
in deep economic mess.
The EU insists on
spinning its so-called "dual track" approach
towards Iran. Stripped of spin, dual track
essentially translates in practice as "shut up,
bow to our sanctions, stop enriching uranium and
sit on the table to negotiate on our terms".
So when the EU's foreign policy head - the
stupendously innocuous Catherine Ashton - spins
about the "validity of the dual track approach",
serious diplomats across the developing world can
only interpret it for what it is; a joke. That's
not exactly an incentive for Iran to renew nuclear
negotiations with the "Iran Six" group (permanent
United Nations Security Council members the US,
Britain, France, Russia, China, plus Germany).
Meanwhile, the Lord of the European
poodles - the Obama administration - is applying
all sorts of pressure over Asian powers to stop
buying Iranian oil. Fat chance. For all of them -
including Japan and South Korea - it will remain
business as usual; they need Iran's oil even more
than the West.
Even BP - the sterling
polluter of the Gulf of Mexico - has asked the
Obama administration for an exemption from
sanctions. It all has to do with a key
Pipelineistan chapter - the development of the
immense Shah Deniz II gas field in Azerbaijan.
There's no way Europe can benefit from
Caspian Sea gas without a massive $22 billion
investment to develop Shah Deniz II - of which
Iran holds a 10% participation. Shah Deniz II
would be essential to supply the Nabucco pipeline
- if it ever gets built. Nabucco bypasses Iran's
strategic ally Russia - which happens to maintain
a stranglehold over Europe's gas supply, as
Europeans themselves never cease to complain in
Brussels.
If Iran blocks it, the deal
dies. So we have a post-surrealist situation of
Britain's Big Oil - via BP - imploring for the US
to exempt it from sanctions, otherwise European
energy security will be at risk. Britain also
happens to be an implacable foe of Tehran's
regime, but still relies on Iran to "save" Europe
from the claws of Gazprom. You can't make this
stuff up.
The City never sleeps
The name of the game in Iran will always
be regime change because the perennial wet dream
of Washington and the European poodles is to grab
Iran's fabulous oil (12.7% of global reserves) and
gas wealth. And the fact is that wealth is
increasingly profiting the Asian Energy Security
Grid - and not the West.
The huge North
and South Azadegan fields - 26 billion barrels -
are being exploited by - who else - China; China
National Petroleum Corporation is developing both,
investing $8.4 billion over the next 10 years. As
for the Yadavaran field, it is being developed by
the China Petroleum & Chemical Corporation; in
four years, it will be producing almost 200,000
barrels a day. And all this without even
mentioning the largest gas field in the world -
South Pars, of which Iran holds a great portion,
alongside Qatar.
And then there's the
crucial petrodollar front. Dominique Strauss-Kahn
(DSK), slightly before he was forced to resign as
the International Monetary Fund's director general
over a sex scandal, was insisting on the end of
the US dollar as the world's reserve currency,
proposing instead the IMF's special drawing rights
- the IMF's virtual currency including the US
dollar, euro, pound, yen and yuan.
Well,
it's already happening, via other means. Memo to
an asleep at the wheel Washington/Brussels axis;
China and India are already bypassing US/EU
sanctions on Iran.
Three BRICS members
(Russia, India and China), plus Japan and Iran - a
mighty mix of the world's largest producers and
consumers of energy - are already trading, or
about to trade, in their own currencies. Russia
and Iran have just started trading in rials and
roubles. All of these powers have bilateral
agreements - inexorably surging to multilateral;
and that translates as the US dollar slowly fading
as the global reserve currency, with all the
seismic consequences this implies.
It's as
if a stunned world was watching a ritual
seppuku in slow motion committed by the
Washington-dominated West.
There is also
the auspicious orange in this Year of the Dragon
pie - the upcoming foreign exchange bourse trading
in yuan in the City of London. Beijing wants it -
and the City badly wants it. Tehran already sells
oil to Beijing in yuan. Think of Iran using the
City foreign exchange to use their yuan and thus
keep access to all global markets - no matter the
US/EU sanctions/embargo avalanche.
Obviously, City players are aware that a
"free trade" yuan bourse in London may play to
Iran's advantage; but unlike those morons in
Brussels, at least City slickers are aware that
business is business.
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