Refined Petroleum Sanction Pass the Senate

Published on January 28, 2010 in Energy. 2 Comments

sanctions

In what seems like a calculated follow-on from Obama’s warnings to Iran in last night’s State of the Union, the U. S. Senate passed a broad sanctions bill (by unanimous voice vote)  aimed at businesses that supply Iran with gasoline.  The House has already passed similar legislation, and the two will have to be reconciled in conference before becoming law.

It is impossible to tell how biting the sanctions will actually be until the final text is in hand since very minor changes in wording can make a big difference.  The administration has been seeking a greater degree of flexibility in how these sanctions are enforced and the procedures for granting exceptions to them.

The image above is from today’s Dunya-ye Eghtesad (World of Economics) with the main headline “American private sector against sanctions ” — a reference to the recent letter (PDF) signed by several American business and trade groups protesting that the sanctions are overly vague and:

could prohibit any U.S. company from transacting routine business with critical partners from around the globe even if these transactions have no bearing on business with Iran. These provisions could encompass a very large portion of the global trade community with consequences that in our view have not been adequately assessed. The proposals could have a large impact on the U.S. Export-Import Bank, precluding it from partnering with counterpart agencies abroad to co-finance U.S. exports that have no relation to Iran’s energy sector.

Meanwhile, the National Iranian-American Council has been making the case that gasoline sanctions would put undue pressure on the people of Iran (and less so on the intended target of the regime) and I’ve argued elsewhere that another overlooked drawback to the sanctions is the potentially destabilizing effects they could have on the region by encouraging smuggling of heavily subsidized gasoline from the GCC states.

At present its still too early to tell how “crippling” these sanctions will be, but it seems few of the bill’s opponents were prepared for it to sail through quite this fast.   -WW

Trouble in the Arvand Free Zone?

Published on January 27, 2010 in Free Trade Zones. 0 Comments
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Iran’s Tabnak news website reports (Persian) that customs workers, labor activists and merchants in the Arvand Free Zone have stopped cooperation with the zone’s management and are forcing commercial goods to be re-routed to the nearby port of Khorramshahr.   At issue is a 2% discount in rates that the Free Zone management claims to be the result of a directive from the High Secretariat of Free Zones – a claim the workers deny.

The piece dances around larger problems afoot in Khuzestan, Iran’s southwestern province along the border with Iraq, home to the bulk of the country’s Arab population.  Residents are said to be resentful that Ahmadinejad has brought in members of his clique to run the Free Zones at the expense of locals, and there are intimations that dealings in the zone are far from transparent.

While there is nothing in the piece that would suggest that this is anything other than a local dispute, Mohsen Kashmirian, the president of the Khorramshahr Worker’s Rights Organization, is quoted lamenting the economic mismanagement that is a central critique of Ahmadinejad’s presidency:

While in past years the Arvand free Zone had been a huge source of income thanks to the customs and trade workers, unfortunately we see that the zone’s management  – especially the present administration – have not shown the commitment necessary to building a platform for growth of trade and commerce at the port – only a neutral and ineffective organization.

-WW

Iran-Kuwait Gas Talks Underway

Published on January 25, 2010 in Natural Gas. 0 Comments

After tensions we reported in October, there seems to be increasing cooperating between Iran and Kuwait on natural gas.   Payvand reported in November that Iran was in talks with Kuwait and Saudi Arabia for joint development of the Arash/Durra gas field the three countries share.  Today, Press TV reports (excerpt below) that talks with Kuwait are progressing over linking Kuwait’s gas network to Iran’s South Pars field.  -WW

“Iran’s gas transportation network has already expanded to Khorramshahr in southern Iran and it’s possible to further extend the network to Kuwait,” said Reza Almasi in an interview with Mehr News Agency on Monday.

He said that the plan to link the two countries’ gas networks includes building a submarine pipeline to Kuwait’s border, which is possible in a short time considering the infrastructure of the southern Iranian province of Khuzestan.

The issue of annually exporting 3-4 billion cubic meters of natural gas pumped from Iran’s South Pars gas field to Kuwait was the one of major topics raised in a meeting in November, 2009 between Iranian Oil Minister, Masoud Mirkazemi, and his Kuwaiti counterpart, Sheikh Ahmad Al-Abdullah Al-Sabah, in Tehran.

Water Problems Hit Iranian Pistachio Yields

Published on January 7, 2010 in Water. 0 Comments


We have been following Iran’s increasingly severe water shortage over the past year.  This problem hurts agricultural yields in Iran and also contributes to cross-border tensions with Iraq.  Today’s FT has an article chronicling how water shortages have hurt the Iranian pistachio crop, both in terms of absolute output and output per hectare compared with its closest rival in the market, the United States.   The most shocking statistic comes towards the end, that Iranian farmers pick about 800kg of nuts per hectare against 3,200kg in the US.

Pistachios are Iran’s biggest non-oil export and the source of politician Ali Akbar Hashemi Rafsanjani’s family fortune, so these changes could have serious political repercussions.

The clip from Al-Jazeera English above gives a bit more background on Iran’s pistachio industry and its rivalry with the U.S. and a  snip from the FT article follows:

-WW

Pistachios are one of the Islamic republic’s leading commodities, constituting 11 per cent of non-oil exports – more than Iran’s famous hand-woven carpets, saffron and dates.

They generated $1.2bn in export earnings in 2007 and $800m in 2008, according to the Pistachio Association. It is predicting a figure of $1.2bn for 2009.

The relatively poor showing of the nuts is a symptom of the wider problems afflicting Iran’s agricultural sector, which accounts for about 17 per cent of gross domestic product. Farming suffers from a shortage of investment by the government and the private sector.

Limited funding by banks, under-mechanised systems and the high costs of water make Iranian produce uncompetitive.

Most of the pistachio industry is private and controlled by small-scale farmers. The government does not set prices but it sometimes steps in to buy crops to support farmers.

Imam Khomeini Port to be Privatised

Published on January 4, 2010 in Uncategorized. 0 Comments

Roger Haily of Lloyd’s List reports (Dec. 17, 2009) that Iman Khomeini port (IK), will soon be privatised.  The statement was delivered by Iran’s Minister of Roads, Hamed Bahbahani at a conference in Tehran. IK, which is located near the Iran-Iraq border, currently handles an estimated 38% of Iran’s trade, including most of the country’s grain imports.   Conceived under the Rafsanjani presidency, Iran’s privatisation program slowed considerably under Khatami.  Ahmedinejad has increased nominal investment in ports and free zones, while transfering control of facilities from Rafsanjani-era ‘technocrats’ to IRGC stalwarts.   The Ahmedinejad government claims to have sold/delivered $63 billion of state-owned equity to the private sector since 2005. –EDC

Amid Bickering, GCC Says Wants To Be Heard on Iran

Published on December 19, 2009 in Uncategorized. 1 Comment

According to an Op Ed in Friday’s Pan Arab Al-Hayat (”Gulf Doubts Continue on Iran Intentions, Request Participation in Dialogue”, 18 Dec.), GCC members last week called for the West (5+1 countries) to actively include the body in its decision-making on Iran.

According to statements issued during the event, the GCC as an organization has no interest in negotiating with Iran on nuclear issues directly (most of the GCC states have acknowledged Iran’s right to peaceful nuclear energy), but called on the West to incorporate Gulf Arab views, and on Iran to respect international laws and obligations. Bahraini Minister of Foreign Affairs was quoted at another event on the opening day of the Summit as saying “strengthening sanctions on Iran was ‘not a fair measure’”, given the dialogue itself had been severely handicapped by the lack of active participation by the Arab Gulf States. Even as Congress voted to implement penalties on foreign companies found to be selling Iran refined fuel, many in the US Administration are thought to be looking for a way to back down on implementing immediate sanctions, for fear that this will further harden Tehran’s already highly defensive position, and accelerate enrichment.  U.S. Asst. Secretary for NEA, Jeffrey Feltman, responding to the GCC statements said from the region (paraphrased) that the US recognises there are some differences in views with respect to Iran policy, and that he would make sure the message was heard in Washington.

All of this underscores the continued chaos and cross-currents that characterize the international response to Iran’s nuclear activities, whether within the US government, the West, or locally.  One might be tempted to give the GCC somewhat more credit as a policy organ if summit proceedings hadn’t been taken up with certain member states’ mutual recriminations, and failed attempts to decide the venue of the next summit. –EDC

Note from Djibouti

Published on December 13, 2009 in Uncategorized. 1 Comment

Iran continues to deploy soft power in the Horn, sponsoring a recent Iranian trade fair (October), and offering some 1m in loans to finance the building of a new Parliament building and Commercial Centre (2004).  In the wake of the departure of Royal/Dutch Shell and Total from the Djiboutian/Ethiopian market, local service stations now bear the insignia of OiLibya, a marketing arm of Libya’s National Oil Company. Neither country is a stranger to the Horn, but a strange juxtaposition, next to American and French forces, and loads of Gulf businesses.  Further indication of how everything is connected…–EDC

Candid Questions at Azad U.

Published on December 13, 2009 in Uncategorized. 0 Comments

Tabnak.ir carried a piece last week describing a particularly candid Q&A between Hashemi Rafsanjani and students at Azad Islamic University in Mashad.  During the meeting, Rafsanjani was asked why he had remained ’silent’ on events of the last few months.  “I did not remain silent”, Rafsanjani replied, ”my positions are well known.” Rafsanjani expressed dismay at the ‘extremism’ that has enveloped all sides of the political spectrum in the wake of elections. The Chairman of the Assembly of Experts and the Expediency Council, said further he had faith in the power of the Iranian people, as it was they who accomplished the Islamic Revolution–but that in deciding their course of action, all sides must act within the context of the law.   –EDC

Tabnak on Iran-Iraq Water Tensions

Published on December 9, 2009 in Uncategorized. 0 Comments

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Water resources shared between Iran and Iraq are becoming a serious source of tension between the two countries.  An article (Farsi) published yesterday on Iran’s Tabnak site gives an Iranian take on the increasingly sharp conflict over claims that runoff from Iranian oil refineries and petrochemical plants at Abadan is polluting the shared waterway, known to Persian speakers as the Arvand River and Arabs as the Shatt al-Arab.

Tabnak’s efforts to paint the Saudi-owned Al-Arabiya story as biased (translated excerpts below) seem to belie a genuine Iranian sensitivity to Iraqi public opinion, particularly in the heavily Shia south.  In October, Al-Jazeera reported on an Iranian shipment of fresh water to Basra citizens, no doubt also an attempt at damage control with Iraqis.  While Iran hardly bats an eye taking on the west over its disputed nuclear program, Tehran seems much more sensitive to criticism closer to home.

-WW

Iraqis blame Arvand River Pollution on Iran

Medical and university officials in the Iraqi province of Basra have accused Iran of polluting the Arvand River. According to the Tabnak correspondent in Iraq, medical and university officials in Basra have accused Iran of polluting the waters of the Arvand River.  These officials announced that “Very dangerous petrochemical poisons from the Abadan refinery running into the Arvand river, and entering Iraqi waters have seriously polluted the Shatt al-Arab / Arvand River to the point where its name should be changed to “The Poisoned River.”

Dr. Malik Hassan, a representative of the Basra Ocean Sciences University, stated: “The deadly poisons that have entered the Arvand River and Shatt al-Arab waterway in Iraq are very dangerous, and we have seen an increase in cancers, and diseases of the liver, spleen, digestive tract, and other serious diseases in the southern parts of Iraq, especially Siba, Sayhan, Faw, Zabir, and Basra.”

Despite the pollution and cancer cases of more than 50,000 people in Basra as a result of American use of depleted uranium weapons in the 1991 and 2003 wars, Dr. Hassan asked high-ranking Iraqi officials to put pressure on Iran, and stop rising pollution levels in the Arvand River.

Likewise, Dr. Faris ‘Omara, a doctor in this southern Iraqi province, speaking on an al-Arabiya talk show stated, “With its two petrochemical and oil facilities on the Abadan shores, Iran has poisoned the Arvand River, resulting in the increased the deaths of fish.”…

This [Al-Arabiya] report was broadcast without any mention of the massive pollution that flows from the Iraqi side of the Arvand River.  Iraqis, with their own worn down petrochemical plants, have been severely polluting the two waterways that run into the Persian Gulf since the early 1990s….

Friday Fun

Published on December 4, 2009 in Uncategorized. 0 Comments

pishnehad

Found this on the Kayhan website (the London-based opposition Kayhan, not the conservative Iranian paper of the same name).  The  caption reads “The Islamic Republic’s suggestion to Google”  For Farsi speakers, the author, reformist blogger Farhad Heyrani, has some more cartoons on his site.

-WW