Home News Economy Iran News Digest- May 9, 2014

Iran News Digest- May 9, 2014

At the Geneva talks, Iranian chief negotiator Abbas Araqchi, expressing either pessimism or intransigence, said on the fourth day of negotiations, “It is not clear whether we can reach an agreement tonight,” according to the New Straits Times. Foreign Minister Mohammad Javad Zarif elaborated by saying that Iran would not bow to what he called “excessive demands.”

 In general, US demands have been anything but excessive. The P5+1 have required that Iran keep new uranium enrichment below 20 percent. The media has general accepted that the regime is holding to this agreement, but since it is not abiding by the Additional Protocol to the Nuclear Proliferation Treaty, which would allow unfettered access to atomic energy authorities, it is difficult to know whether unexplored facilities are concealing illegal activities.

This aside, Iran has been asked to keep its oil exports below 1 million barrels per day on average until the final deadline for a deal in July. This week, Oil Minister Bijan Zanganeh explicitly rejected that aspect of the agreement, saying that the country would export as much as possible. The move reflects the same confident defiance that President Rouhani expressed on Wednesday when he said that Western powers were negotiating with Iran because the “great and resistant” Islamic nation would not bow to the pressure of sanctions, leaving the West with no choice but to make a deal.

 The exact same sentiment was expressed by Ayatollah Mohammad Ali Movahedi Kermani on Friday when he addressed a congregation at Tehran University. “The enemies thought in vain that they could compel Iran to hold talks under sanctions,” Kermani said, according to Fars News Agency. He reiterated Iran’s commitment to its nuclear program, and referred to Western nations as enemies at several points in the speech, singling out the United States as “Satan.Although Kermani and Rouhani both insist that Iran remained unshaken by sanctions, the US has released 2.55 billion dollars’ worth of frozen Iranian assets under the terms of the interim nuclear agreement. Independent reports generally agree that the sanction relief has helped Iran’s economy on the way towards significant recovery.


China Losing Footing

Amidst that recovery, foreign investment is a major theme of Iranian regional policy. And in those policies, some stand to lose and some stand to gain. The AFP reports that China may stand to lose as European and American businesses begin to feel comfortable returning to Iran now that sanctions are being removed. The increased competition threatens to squeeze out China, which is one country whose firms took advantage of Iran’s isolation to set up business relationships with the oil-rich country.

 Last week, Zanganeh canceled a major petroleum deal with a Chinese company, and this week the International Oil, Gas, and Petrochemical Fair allowed representatives of many transnational companies to visit Tehran and look into their prospects for investment in the Iranian theocracy.

The threat to China’s economic position may be a driving factor in Chinese efforts to establish closer military ties with Iran. It is possible that Chinese interests may further complicate what are apparently increasingly difficult nuclear negotiations. As a permanent member of the UN Security Council, China is one of the six nations in talks with Iran.

 On one hand, an expanded foreign presence in Iran may threaten China. But on the other hand, the AFP quotes a representative of a Chinese supplier as saying that “business will be even easier” for them if sanctions are removed. It seems that China stands to benefit from either failed negotiations or from successful negotiations, just as long as political and military efforts can keep it closely allied with Iran, whatever else happens.


Oil Grab

In the event that Iran continues to receive sanctions relief, certain nations’ desires for close alliance or expanded business relations will only grow stronger. The obvious reason for this is Iran’s tremendous oil reserves – the third largest in the world. The strategic importance of the resource is obviously not lost on the Iranian regime, as recent developments make clear.

This week has marked a flurry of regional activity by Iranian officials and envoys, who have been working to expand diplomatic and trade relations with a number of other Asian countries, including Russia, Turkmenistan, Armenia, Kuwait, and Tunisia. Many of these discussions have reportedly emphasized virtually sanction-proof barter arrangements, but many have also touch upon oil in one way or another.

Now, Fars News Agency has reported that Iranian experts are ready to assist with oil drilling in Tunisia and Turkmenistan, following conversations with officials from both of those countries. This announcement comes amidst the news that Pakistani Prime Minister Nawaz Sharif will be visiting Iran in the coming week, in part to discuss a stalled oil pipeline between the two countries.

 Pakistan’s Express Tribune indicates that the pipeline has become a point of contention between the two nations, with Pakistan being loath to go ahead with the project until US sanctions no longer seem to be a threat. Iran, meanwhile, is insisting that the pipeline be completed quickly, in spite of Pakistani objections.

Furthermore, it was reported on Thursday that Iran had announced plans to build two oil and gas pipelines to the Kurdish region of Iraq. The pipelines would supposedly factor into both the import of unrefined crude and the export of liquefied petroleum gas.


Considering all of these plans in context with one another, it may appear that Iran is striving to not only profit from a resurgence in its own oil exports, but to also take control of the petroleum resources of other nearby nations, to whatever extent possible.