THE ROVING
EYE The
Iranian oil embargo blowback By Pepe Escobar
If the sorry parade of
European poodles - or what analyst Chris Floyd
delightfully dubbed Europuppies - had any
understanding of Persian culture, they would have
known that blowback for their declaration of
economic war in the form of an Iranian oil embargo
would be nothing short of heavy metal.
Better yet; death metal. The Majlis
(Iranian parliament) will discuss this Sunday, in
an open section, whether to cancel right away all
oil exports to any European country that approved
the embargo - according to Emad Hosseini, the
rapporteur of the Majlis Energy Committee. And
that comes with the requisite apocalyptic warning,
relayed via the Fars news agency, courtesy of
member of Parliament Nasser Soudani: "Europe will
burn in the fire of Iran's oil wells."
Soudani expresses the views of the whole
Tehran establishment
when he says that "the
structure of their [Europe's] refineries is
compatible with Iran's oil", and so Europeans have
no alternative as replacement; the embargo "will
cause an increase in oil prices, and the Europeans
will be compelled to buy oil at higher prices";
that is, Europe "will be compelled to buy Iran's
oil indirectly and through intermediaries".
According to the EU sanctions package, all
existing contracts will be respected only until
July 1 - and no new contracts are allowed. Now
imagine if this pre-emptive Iranian legislation is
voted within the next few days. Crisis-hit Club
Med countries such as Spain and especially Italy
and Greece will be dealt a deathblow, having no
time to find a possible alternative to Iran's
light, high-quality crude.
Saudi Arabia -
whatever the oily spin in Western corporate media
- does not have the spare capacity; and on top of
it, the absolute priority for the House of Saud is
high oil prices, so it can bribe - apart from
repressing - its own population into forgetting
about noxious Arab Spring ideas.
So yes,
already broken European economies would be forced
to keep buying Iranian oil, but now from the
winners of choice - middlemen vultures.
Not surprisingly, the losers lost in these
Cold War tactics anachronistically applied to a
global open market are the Europeans themselves.
Greece - already facing the abyss - has been
buying heavily discounted oil from Iran. The
strong possibility remains of the oil embargo
precipitating a Greek government bond default -
and even a catastrophic cascade effect in the
eurozone (Ireland, Portugal, Italy, Spain - and
beyond).
The world needs a digital
Herodotus to decode how these European poodles who
claim to represent "civilization" were able, in a
single stroke, to inflict simultaneous pain on
Greece - the cradle of Western civilization itself
- and Persia - one of the most sophisticated
civilizations in history. In an astonishing
historical replay of tragedy as farce, it's as if
Greeks and Persians were bonded together at the
Thermopylae facing the onslaught of North Atlantic
Treaty Organization armies.
Hit the
Eurasian groove Now compare it with the
action all across Eurasia. Russian Foreign
Minister Sergey Lavrov said, "Unilateral sanctions
don't help matters". The Ministry of Foreign
Affairs in Beijing, exercising immense tact,
nevertheless was unmistakable; "To blindly
pressure and impose sanctions on Iran are not
constructive approaches."
Turkey's Foreign
Minister Ahmet Davutoglu said, "We have very good
relations with Iran, and we are putting much
effort into renewing Iran's talks with the 5+1
[Iran Six - the United Nations Security Council
permanent members plus Germany] mediators' group.
Turkey will continue looking for a peaceful
solution to the issue.”
BRICS member India
- alongside Russia and China - also dismissed
sanctions. India will keep buying Iranian oil and
paying in rupees or gold. South Korea and Japan
will inevitably extract exemptions from the Barack
Obama administration.
All across Eurasia
trade is fast moving away from the US dollar. The
Asian Dollar Exclusion Zone, crucially, also means
that Asia is slowly disengaging itself from
Western banks.
The movement may be led by
China - but it's irreversibly transnational. Once
again, follow the money. BRICS members China and
Brazil started bypassing the US dollar on trade in
2007. BRICS members Russia and China did the same
in 2010. Japan and China - the top two Asian
giants - did the same only last month.
Only last week, Saudi Arabia and China
rolled out a project for a giant oil refinery in
the Red Sea. And India more or less secretly is
deciding to pay for Iranian oil in gold - even
bypassing the current middleman, a Turkish bank.
Asia wants a new international system -
and it's working for it. Inevitable long-term
consequences; the US dollar - and, crucially, the
petrodollar - slowly drifting into irrelevance.
"Too Big to Fail" may turn out to be not a
categorical imperative, but an epitaph.
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