Insider news & Analysis in Iran


By Iran News Update Staff 



Late Wednesday, shortly before the announcement of the short lived cease fire between Israel and Gaza, Major General Qassem Suleimani, the commander of the Iranian Revolutionary Guards’ Quds Force, dismissed notions of ceasefire or disarmament and called upon Palestinian militants to “turn the land and skies into Hell” for the Israelis, The National reports.

This firm commitment to the fighting reflects not only the traditional anti-Semitism and regional intrusions of the Islamic regime, but also the growth of distinct factions spanning the entire Middle East region. CNN quotes Fareed Zakaria as saying that the current conflict between Israel and Hamas is “a proxy war for control or dominance in the Middle East,” with Iran and other supporters of extremism facing off against the more moderate Muslim powers, which have been less inclined to support the fighting.

In this context, when Iran urges other Muslim nations and non-government organizations to participate in arming Hamas and encouraging a broader war, it is not just acting against Israel. It is also striving to radicalize those nations and groups. This is apparently the case with its recent efforts to pressure Egypt, which remains somewhat on the fence between the leadership of its current, moderate Muslim president and the radical Muslim leadership of the Muslim Brotherhood, which was voted into power but then overthrown last year.

Middle East Monitor reports that Iran’s Deputy Foreign Minister Hussein Amir Abdullahian on Thursday condemned Egypt for delaying Iranian shipments of what it claims is humanitarian aid to Gaza. Iran has formerly helped to supply Hamas with missiles and other military components, and the effort to speed supposedly humanitarian shipments through Egypt may double as an effort to open up a more direct channel for arms shipments.


According to Reuters, US Vice President Joe Biden spoke to the Prime Minister of Japan on Thursday, in order to discuss cooperation over key foreign policy issues, including Iran nuclear negotiations. The two officials reportedly agreed to coordinate closely, thus extending Japan’s former support for the negotiations and for American activities more generally.

Japan was a loyal backer of US-led sanctions on Iran, having slashed its imports from the Islamic Republic after those restrictions were put in place. The promise of close coordination going forward could mean the continuation of this policy, or it could mean following the American lead in opening up to Iranian business. The Obama administration’s actions during nuclear negotiations indicate that officials believe that sanctions relief and extensive good will provide significant incentives for Iranian cooperation. The truth of this claim has certainly been called into question by US congressmen, citing an apparent lack of compromise from Iran.

If Japan was coordinating closely with the United States on Iran trade policy last month, then the United States is in favor of expansion. Japan reported nearly 50 percent more imports of Iranian oil over the previous month, according to Gulf News. And these figures contribute to a more general increase in exports of Iranian oil to Asia. The four main buyers in that region – China, India, South Korea, and Japan – reportedly took in 25 percent more Iranian oil in the first half of this year, as opposed to the last.

China, typically an ally of the Islamic Republic, has naturally led the way on this increase. This may be indicative of more general expansions of trade and economic relations between the two countries. The Brookings Institution points out that Iran has reportedly increased its Chinese imports by 122 percent under the presidency of Hassan Rouhani.


Thanks in part to the above figures, the outlook for the Iranian oil and gas industry is apparently inconsistent for the time being. While some exports increase, the website Companies and Markets claims that the continuation of sanctions will prevent Iran from being able to fulfill its rising domestic energy needs even though the size and value of its oil reserves has increased in the past two years.

The oil and gas sector may also be having an impact on Iran’s relationship with Iraqi Kurdistan. This relationship is also being impacted by the threat of Iran losing its grip on Iraq as militants from the Islamic State continue to put pressure upon the Shiite, Iran-backed government of Nouri al-Maliki. Despite its historical repression of its own Kurds, Iran has reached out to the Kurdish government in northern Iraq in an attempt to gain their help in fighting the Sunni uprising. Now Iran may be using Kurdish oil as an incentive to that cooperation.

Iraq Oil Report indicates that Iran has just reopened its border to Kurdish oil imports. The former ban on tanker truck transit across the border highlighted the Kurdistan Regional Government’s dependence on Iran as an export market. The re-opening provides even greater relief to that government in light of the fact that it is unable to sell its oil to most other markets. Baghdad has disputed the KRG’s rights to sell Iraqi oil, and foreign governments are largely unwilling to make oil purchases that may later been deemed illegitimate.

According to Reuters, Iraqi Kurdistan is currently paying 75,000 dollars per day to keep three oil tankers at sea without ports to which they can deliver their 300 million dollars’ worth of oil.


If Kurdish and other sources of additional crude help Iran to meet its domestic energy needs, oil exports continue to increase, and sanctions continue to be alleviated by the Obama administration, the Iranian petrochemical industry will be an increasingly attractive new market for European entities that expect Western sanctions to be dropped.

Many reports have suggested that governments and businesses are angling to position themselves to be among the first to enter that market. But the continuation of sanctions and the uncertainty of negotiations still contribute to overall cautiousness. In an example of both of these tendencies, reports that Austrian President Heinz Fischer has developed preliminary plans to visit Tehran, but that this visit will wait until after nuclear negotiations are completed in November.




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