Israel Matzav

EU bans Iranian oil imports - will it help?

On Monday, the European Union adopted sanctions that ban the import of Iranian crude oil and place barriers in the way of Iranian financial transactions. Will they help? Benny Weinthal sees three possible outcomes.

First, the EU sanctions, until now, have produced a positive result in raising European unity toward Iran’s failure to adhere to six UN Security Council resolutions demanding that it stop work on its illicit uranium enrichment program.

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The second, less positive result of EU sanctions is they are staggered.

The EU chief diplomats agreed that EU countries with ongoing agreements to purchase oil and gas products can maintain those contracts until July 1. A measured imposition of oil sanctions can allow Iran to market its petroleum elsewhere. The lucrative Chinese and Indian markets have not cut ties with Iran’s energy sector.

The EU decision to place restrictions on the Central Bank of Iran fall short of the US and British measures to sever all ties with Iran’s major bank. It is unclear what the restrictions are at this stage because the EU has not published the full text outlining its penalties.

According to a Dow Jones Newswire report on Sunday, the EU and the UK lobbied the US to insulate the “Iranian national oil company Naftiran Intertrade Co.’s 10 percent stake in the Shah Deniz II natural gas project” from sanctions.

The British energy giant BP and other European countries are developing oil in Azerbaijan at the Shah Deniz II enterprise.

The final possible outcome is that the sanctions prove ineffective. The nuclear weapons program might be so integral to the regime’s existence in Tehran that the ruling political class is willing to absorb a North Korea-style economic meltdown in exchange for nuclear weapons.

Unfortunately, the third result is the most likely one. It's not like there's going to be a fair ballot on the issue. Other measures will be needed if Iran is to be stopped.

Labels: European Union, Iran sanctions regime, Iranian nuclear threat

posted by Carl in Jerusalem @ 12:18 PM