Oil Sanctions on Iran

by Jahanshah Rashidian (Iran/Germany)

October 15th, 2007
21 Comments

Some analysts of Iranian opposition believe that oil, instead of military attack or economic sanctions, would be an effective weapon, both for the West and Iranian people, to confront the plague of the IRI.

Iran holds 11% of the world’s oil reserves. Government revenue of oil is 70%. A great proportion of this national revenue is not invested to improve the cause of people, but is mainly set aside to finance the repressive organs and internal security services of the Mullahs’ regime. In short, Oil income does not play an important role to improve national economy; rate of inflation, and unemployment increases while line of poverty sinks.

The IRI is precarious, unpopular mullahs hold onto power by all means of repression. If the oil revenue were suddenly to drop, the repressive regime would lose its steady income and would have serious problems to invest its repressive machine to repress domestic population and finance international terrorism.

Mullahs do not care about the extraction of Iranian oil wealth and hike the production — the Organization of the Petroleum Exporting Countries (OPEC), to which Iran belongs, agreed to hike output by 500,000 barrels per day from the next November.

Mullahs know the risk of an international oil sanctions; they try to use the relatively expensive oil price, a barrel for 84 dollars, to export as much as possible. They are buying oil tankers from South Korea to increase their transport fleet and consequently oil transportation capacity to 11 million tons by 2010 which would put it at fourth position in the world.–the IRI will also increase its gas production over 80 million tons of liquefied par annum, according to National Iranian tanker Co (NITC).

We know that interconnected global economies vitally depend on oil. The industrialised world, especially the US, is the main consumers of fuel. “Despite the deep economical interconnections, they are not always in harmony; the EU because of its intensive trade with Iran is not opposed hard sanctions on the IRI because of the following reasons are the:

–Thanks to Iraqi occupation, US oil import can easily be achieved by opening the Iraqi oil spigot for as long as the US need. The occupation seems to ensure that Iraq will end up as an American oil exporter for the next decades, a guarantee for the US, but not the EU.

– The EU remained cooperative with Iran after the Iranian revolution. The EU’s share of Iran’s total imports increased to 45%. EU trade with Iran has even expanded since Iran’s secret nuclear programme was exposed. The EU imports 40% Iran’s oil—the rest goes to Japan, China and other Asian countries.

Under such economic considerations, the perspective of non-economical factors, IRI’s sponsored terrorism, and nuclear programme, did not seem to play an important role for the EU. European firms which supplied Saddam’s machine war, especially chemical weapons which were used against both Iranian troops and civilian Iraqi Kurds, went into trade with both countries after the war to rebuild the damaged infrastructures.

Because of IRI’s nuclear ambitions, the U.N. Security Council has previously passed two sanctions resolutions against Iran for failing to halt uranium enrichment. The West and IRI’s friends, China and Russia offered a package of civil nuclear and, economic incentives if the Mullahs suspend the enrichment, but the regime stubbornly continues its atom ambition and very likely plans to build the bomb for its military ambitions.

Now, we stand before new UN and, separate, EU sanctions against the IRI, and this time it seems more serious for Mullahs. The EU seems to approach the US policy vis-a vis Iran. It is likely that new sanctions will be more serious and from now on oil seems to play an important role in the regime sanctions.

Although Iran is the world’s fourth-largest crude oil exporter, it lacks refining capacity to meet domestic demand for gasoline. Rationing was introduced in an effort to curb consumption and cut the rising cost of importing fuel. In the light of international oil sanctions on Iranian, India has already shown ready to join the West, India imports Iranian crude oil and after refining it exports it to Iran. By avoiding the trade, India can play a curtail factor to paralyse Mullahs’ regime.

According to Iran’s Oil Ministry, the country needs to import up to 15 million litres of gasoline a day for domestic consume. Before rationing was imposed, the domestic consume was estimated 75 million litres a day of gasoline, of which about 36 million was imported. Since June, consumption has dropped to a little more than 60 million litres day, Iranian officials have said. In the case of gasoline sanctions Iran’s domestic consummation can be hardly affected.

Germany which is the European partner number one with the IRI seems to approach French position to join US / UK ones towards Iran. The German chancellor, Angela Merkel, told recently German daily Die Welt (a conservative German newspaper) “the Islamic Republic threatened the whole world and had to be contained”. She continued “I’m emphatically in favour of solving the problem through negotiations, but we also need to be ready to impose further sanctions if Iran does not give ground”.

If oil sanction, as a new weapon of sanction, is imposed as a result of IRI’s nuclear row with the West, and it can render the IRI more vulnerable, it is also at the same time a lack of resource in the hand of the Mullahs to finance their repressive organs and a fair occasion for Iranian people to challenge the plague of the IRI, some Iranian analysts believe.

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Mohammad Memarian (Iran)

October 15, 2007

Government revenue of oil is 70%. A great proportion of this national revenue is not invested to improve the cause of people, but is mainly set aside to finance the repressive organs and internal security services of the Mullahs’ regime. In short, Oil income does not play an important role to improve national economy.

those who try to prove that any sanction would effect only “Mullahs’repressive machines” not the people, are either stupid or dumb. almost 20% of oil revenues go directly to the pocket of the people in the form of payment for subsidies or employee of the governmental organizations (about 3 million iranians are direct employees of governmental organizations…. I guess that Jahanshah will say that all of them are mmebers of IRI militia or relatives of Mullahs); 20% goes directly for public educations; and another 20% for health and medical care purposes.

heads of the regime and their so-called repressive machine will be the last ones who will suffer from any sanction, if they ever suffer any.

Dawoud (Bahrain/Japan)

October 15, 2007

Sanctions… I am tired of sanctions… has anyone proved a sanction really works? As with most sanctions, it’s the lowest income people who feel the pinch, not the power brokers or those who control the juice. In turn, it will fuel any propaganda machine to abate the tension felt at home and will mask any real blame for why a sanction was imposed in the first place. The only thing that happens is escalation of tensions and we definitely do not need that right now. I think we should all just drop the guard, and yeah, that will throw off any adversary, and just say “Hey! I am tired of this. Let’s just be friends and work some things out.” Has anybody even tried this approach? The USA should know better that sanctions don’t really work in their favor. For example, Cuba. The sanctions placed on Cuba are old, archaic and definitely not conducive to friendly relations. Venezuela’s Chavez uses this to keep himself in power with little to no resistance. If the USA were to drop sanctions against Cuba, opened up free trade and worked fast to build up good diplomatic relations with Cuba and work towards image improvement as a good neighbor and friend (sincerely), this would definitely throw Chavez off and would isolate him and would lead to the cease of rising tension in South America. Just my 2 fils, and I am sure a lot of you have somehing on the contrary to say.

Me

October 15, 2007

It’s one of the best option, full sanction except food and medicine to Iran. the sanction should include banning International flight specially for Iranian politicans and mullahs. The full boycott of Islamic republic of Iran will work.

Mohammad Memarian (Iran)

October 15, 2007

The full boycott of Islamic republic of Iran will work.

hit the mark… it will work, exactly the same way it worked in the case of Saddam.

Jahanshah Rashidian (Iran/Germany)

October 15, 2007

My Reply to all Comments

The IRI cannot be reduced to a simple dictatorial system like the recent or today’s existing ones; no, this a bonus of alleviation. In fact, the IRI is an extremely brutal totalitarian system, emulated from the archaic models of a clan society of Arab pagans.

IRI’s criminal records go beyond of any standard of today’s imagination, i.e., with one Khomeini’s fatwa, several thousands political prisoners, some of them minors, were killed in summer 88.

Hundreds of thousands of Iranians have been jailed, tortured, forced to repent, or summarily executed. Millions of Iranians have been forced to leave the country looking asylum in the West.

The brutal face of Mullahs’regime is camouflaged by the censured or state run media in Iran. Furthermore, in the light of any Göbbels-like propaganda system of totalitarian regimes, a crowd of sold intellectuals, paid journalists and Islamic media-networks do the job to create an international apathy towards the depth of Iranian people’s plight.

Oil is not only a mafia wealth of IRI’s corrupt Mullahs—Rafsanjani-clan, mushroomed Islamic foundations and institutions, but also is a high resource of financing the repressive organs in Iran– hundreds of thousands of pasdars, Basijis, masked hooligans, bearded / veiled thugs of “Morality Police” murderer- militias… Plus IRI’s financing measures for international Islamist terrorism.

What I prefer to be immediately tackled by the international community is more inspired from the wishes of most Iranians who are the daily victims of the IRI’s atrocity; therefore, apart from any sanctions or bargain of the international community with the IRI over its atom ambitions, Iraq’s issue, international terrorism…The following measures seem me more effective:
–The IRI must be international wide isolated; practically, all diplomatic relations, cultural / sport contacts with it must be banned.

–All foreign accounts of IRI’s seniors and their related institutions must be internationally frozen.
–Their mafia activities in the Persian Gulf and in the region, especially Iraq, must be under strict scrutiny.

–International mandates must be issued against IRI’s officials for their crimes against humanity.

–The UN and the Council of Europe should be demanded to approve resolutions putting the IRI and the political Islam on an equal status of fascist, racist, and criminal organisations.

Such resolutions are not either beyond the legal competency of these organisations nor the judicial facts. This is an active contribution to elaborating a charter of principles for an IRI’s isolation.

Dawoud (Bahrain/Japan)

October 15, 2007

Well, I think one of you hit on one thing, the EU… They’ve been historically lukewarm with regards to sanctions and honestly, the UN isn’t looked at as an organization that can throw weight around. As long as there is a parallel world that current Iran can maneuver around in and conduct daily business transactions with those who don’t care about the politics… it’s a very steep wall to climb. I sound pessimistic, I am sure, but I would like to see a more free Iran, just as you do.

Mohammad Memarian (Iran)

October 15, 2007

–The IRI must be international wide isolated; practically, all diplomatic relations, cultural / sport contacts with it must be banned.

–All foreign accounts of IRI’s seniors and their related institutions must be internationally frozen.
–Their mafia activities in the Persian Gulf and in the region, especially Iraq, must be under strict scrutiny.

–International mandates must be issued against IRI’s officials for their crimes against humanity.

–The UN and the Council of Europe should be demanded to approve resolutions putting the IRI and the political Islam on an equal status of fascist, racist, and criminal organisations.

as long as your suggestions are like those montioned above, which are less likely to kill several hundreds of thousands of kids and others for no reason (like what happened in Iraq during those stupid sanctions as well as that dumb attack), I see no reason to oppose it as might-be-justified measure.

but be aware: most of the things ‘modern civilized world’ (the term used by columbia university head in his introduction speech before Ahmadinejad’s turn) is going or willing to do, our counter-productive strategies proved inefficient…. exactly similar to what the head of Columbia university did. I mean, these matters are less likely to do a good to your cause…. but if you still insist on this trial and error, go on. “we learn from the history that people do not learn from the histoy”.

Mohammad Memarian (Iran)

October 15, 2007

sorry: “are counter-productive strategies proved inefficient”… lack of edit options…. Esra’a!

Jahanshah Rashidian (Iran/Germany)

October 15, 2007

True, the EU’s public objections remain in a demain of critical dialogue towards the IRI. As mentioned, the EU with more than 45% bilateral trades is the first partner of the regime. But the EU’s people are not satisfied with complaisance.

Dawoud (Bahrain/Japan)

October 15, 2007

Ok, what can we do to get word to the people of the IRI that what we would do in basically isolating them from the rest of the world is good for them in the long run? You left one important person out of the framework- Vladimir Putin. Russian/Iranian relations go back hundreds of years, and from the way Mr. Putin put it down in Iran recently, it sounds like they have a solid ally in their corner (Russia being the ally). Goods/finished/semi-finished products and other raw materials can be easily transported through Russia, so if you are going to get a lasso on the IRI, you better be prepared to get a bigger one on Russia, and Russians don’t care because they know big business will win out with major trading going on between them and the EU and with Asian nations. Russia is also a conduit for stolen goods and crime-related activities. Also, you’ve got a hell of a large Persian community in Russia and the former Soviet states. What the latter has to do with anything is unknown to me and I don’t know why the hell I put it out there, but family is family, and if some family is feeling the pinch in Iran, they will turn to their family in Russia and the surrounding nations of Central Asia to help them move product in and out.

Yes, I sound like a wet rag, but I’m just thorwing out some other bits to contemplate.

Jahanshah Rashidian (Iran/Germany)

October 15, 2007

Yes, Russia or China are new obstacles for Iranian freedom. Putin was now in Iran to abuses the international pressure on the IRI to grab the big portion.
Putin was in Iran to realise an old dream of Russian Czars to conquer the lumewarm Caspian! The Iranian coast reduced to only 10%! The warm waters come into view if the IRI exists.

Dawoud (Bahrain/Japan)

October 15, 2007

I think he would have a very hard road to travel if he (Putin) ever tried to set this (take control of the Caspian) in motion. Iran could never be held, as the lessons of the Soviet invasion of Afghanistan proved. A theoretical push to the Indian Ocean and a warm water port was what they (Soviets) were aiming for. I suppose Pakistan would have given in if the Soviets actally gained positive control of Afghanistan by going into concessions with the Soviets in order to keep them from invading. Wow… I hope that made some kind of sense.

Mohammad Memarian (Iran)

October 15, 2007

The Iranian coast reduced to only 10%!

you would better try to be updated with the latest news…. that nothing important happend in the Putin’s trip tp Iran with regards to the Caspian Sea’e legal status…. but Iran confessed that Putin had a special message for Iran, a message worthy of such a landmark trip.

before Putin’s arrival, Iran’s foreign affairs spokesman announed that ‘good news about Bushehr atomic reactor will be released as soon’. not only after his arrival nothing happened in the case of Bushehr, but also Supreme Leader’s office announced that Ayatollah Khamenei said to Putin: “we will contemplate your idea and suggestion”. Iran’s top nuclear negotiator (secretary of national security council) approved the news, though refused to provide any hint to the “details of Putin’s message”. all are waiting to know more.

and you would better open your eyes as well as ears…. do not make news of your own just to portray everything in Iran with a black pencil.

eric/canada

October 15, 2007

Just a small note on this: I have a friend who is an importer/exporter based in China, living in Canada, who just expanded his operations into Iran, as a partner with an Iranian expat. He is only concerned about possible sanctions affecting shipping. When I got into a conversation about trade and Iran’s nuclear and human rights issues his attitude is: “So what? Who cares? If the Americans and their friends won’t buy oil, then China can get it cheap!” Basically, I don’t think that China will agree to any economic sanctions, and will simply use an oil sanction to their own advantage, leaving the US and allies with the option of confronting or confiscating China bound oil tankers in international waters, a scenario that I think the US would want to avoid. Also, Japan has a history of being ‘ahem’ sensitive about its crude oil supply lines, and probably would not take well to giving up an important source only to watch it’s main rival in the Pacific buy it up. In principle, this is a good idea, but China has proven with the Sudanese that it does not mix business with moral principle, particularly where oil is concerned.
P.S. on the Russia invades Iran scenario: Pretty far-fetched, but Mr. Putin has certainly been building his military and nationalistic rhetoric up for something…certainly the US hasn’t got the capacity to oppose such a move right now. And wouldn’t it be to Iran’s advantage to announce a NATO-like military alliance with Russia, who is feeling a bit ‘defensive’ about missle programs? After all, why invade a country when they may just invite you to build a base or two?

Jahanshah Rashidian (Iran/Germany)

October 15, 2007

Dear Eric
I agree with you that oil sanction remains a difficultly realisable option. Oil proved the most immoral affairs of conspiracy, treachery, mafia trade, and smearing corruption in the region. Look at the corrupt Sheiks and Mullahs who form the client states of international oil consortiums.

What I propose at best is Mullins’s human rights records which are not so complicated. Most high ranking members of the IRI are under investigation and wanted for their criminal and terrorist activities by different judges in the world. This seems to be the most vulnerable Mullins’s Achilles heel.

Islamic regime mainly spends oil money on crushing angry people in Iran and supporting terrorists in Middle East and else where.
Your Iranian friend, who does trade with China, knows it very well. He is a one of many “let’s survive” of a totalitarian culture which forces the citizens to consciously be blind and deaf.

Jahanshah Rashidian (Iran/Germany)

October 15, 2007

Dear Eric
I agree with you that oil sanction remains a difficultly realisable option. Oil proved the most immoral affairs of conspiracy, treachery, mafia trade, and smearing corruption in the region. Look at the corrupt Sheiks and Mullahs who form the client states of international oil consortiums.
What I propose at best is Mullahs’s human rights records which are not so complicated. Most high ranking members of the IRI are under investigation and wanted for their criminal and terrorist activities by different judges in the world. This seems to be the most vulnerable Mullas’s Achilles heel.

Islamic regime mainly spends oil money on crushing angry people in Iran and supporting terrorists in Middle East and else where.
Your Iranian friend, who does trade with China, knows it very well. He is a one of many “let’s survive” of a totalitarian culture which forces the citizens to consciously be blind and deaf.

eric/canada

October 15, 2007

True enough..I met him 8 years ago, and he’s a great guy, but the first time I mentioned Tiananmen Square and the massacre there he looked at me blankly. I then had to spend about an hour showing him what happened there…he had not idea! The Chinese authorities completely closed off all reporting of it within the country! And this guy is far more computer and internet savvy than me. It was my first real encounter with that level of government censorship, and I was floored. Up until then I just took it for granted that the media would completely exploit disasters and tragedies of that scale to such an extent that they would be common knowledge, and since, I’ve found more and more that the West is doing it also. It’s not that my friend is cruel or uncaring, though. He just doesn’t understand the connection between doing business with the Mullahs, and supporting their regime. And, to a large extent, I think that, strangely enough, is a part of the Chinese mindset right now: that the affairs of other nations are their business, for better or worse, and they should treat China the same way. It’s such a weird attitude from a nation that had a Marxist revolution 6 decades ago… Perhaps the political focus of the Olympics will usher in a new realization of global conscience on their part…

Nadia

October 15, 2007

I agree with a lot of the above commenters, there will always be someone willing to buy and besides that, what harm did sanctions ever do to Saddam Hussein? And then, where do you stop, Venezuala, Bolivia, China, Turkey, Russia? Personally I’m just as concerned about the Saudi government(and it’s actions both in and outside its borders), but as far as we’ve seen with Iraq and North Korea there isn’t much proof that isolation is effective.

Jahanshah Rashidian (Iran/Germany)

October 15, 2007

Nadia

There is a fundamental difference between the Shiite IRI and Sunnites of any Islamic state. In Shiite concept of Velayt-e-Faqih “Supreme Religious Guardian”, the absolute power is given to a Sayyed, a descendant of the Prophet Muhammad, who rules the Supreme Leader in Iran.

The interpretation of Islam of this instance holds that Muslims (Sunnites and Shiites) throughout the world constitute a single community – the Ummah – who must be ruled by a single Supreme Leader. The Mullahs assert that by virtue of the Iranian revolution they have acquired the status of “guardians” of all Muslims throughout the world. The other Sunnite Islamic states can be despotic, corrupt, and backward, but not an institutionalised instance to expan “Dar-al Islam” (house of Muslims).

This is the core difference between the political Shiites and Sunnites which can end up with a war within the Islamic world.

Mohammad Memarian (Iran)

October 15, 2007

how wise was the man who suggested: “let them speak… they will uncover their stupidity” (dont look for this quote anywhere; it was said by an Iranian, who knew his compatriots better than any other intelligent/academic service/agent. though, it applies to many people, like Ahmadinejad himself)

In Shiite concept of Velayt-e-Faqih “Supreme Religious Guardian”, the absolute power is given to a Sayyed, a descendant of the Prophet Muhammad, who rules the Supreme Leader in Iran.

in Iran’s constitution, the absolute power is given to a Grand Ayatollah, whether he is a Sayyed or not.

The other Sunnite Islamic states can be despotic, corrupt, and backward, but not an institutionalised instance to expan “Dar-al Islam” (house of Muslims).

Dar-al Islam!!! do you know who first stages such a slogan? if Jahanshah knew this, he would never:
1- attribute it to Shiite (for this quote is originally from…)
2- exclude Sunni extermists from the list of those who claim the world power

to me, all of the extermists are equal… whether from a religious background or a liberal one. (yeah, I think that liberals may sometimes turn into extermists.)

Me

October 15, 2007

Nadia:

We should extinct all religious polity in all states, Iran, Saudi Arabia and so on. There is no exception in this area. Saudi Arabia, Pakistan and Afghanistan extremists is dangerous too whole world too but there is a difference between their rules and Islamic Republic Rules. At the end of the day, we should get rid of all of them to bring back peace of mind to region.

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