The oil embargo against Iran promised by the EU came into force on July 1. Neither the Iranian threat to block the Strait of Hormuz nor the dubious promises of "progress" in negotiations on Iran's nuclear program in the format of the Group of Six, which includes Russia, China, USA, France, Britain and Germany, had any effect on the EU's decision to apply further sanctions against Tehran. The leaders of the 27 EU countries approved the decision to impose an embargo on Iranian oil imports to the EU from July 1, Herman Van Rompuy, the President of the European Council, said on June 29. According to Van Rompuy, the summit participants called on the Iranian authorities to take a constructive position in negotiations with the six international mediators on Iran's nuclear program, RIA Novosti reports.
Earlier, the Tehran authorities repeatedly stated that the EU sanctions against Iran would cause it absolutely no damage. Rostam Kassem, the Iranian oil minister, expressed this position again after the entry into force of the oil embargo: "Although the EU is seeking to attack the Iranian economy, fortunately the situation is developing in such a way that there are even first-time buyers of Iranian oil now, the Iranian news agency Fars quoted the words of the minister.
Kassem, however, has not listed the countries which are these "new buyers" of Iranian oil. The IRI, of course, is actively looking for new markets, but progress in this path is an open question. Anyway, a few days ago it became known that at least one of the "new customers" that Minister Kassem hoped for had decided to decline supplies of the "black gold" from the IRI under pressure from the West. Kenya has decided to abandon the agreement to purchase Iranian oil because of the international sanctions against the IRI, Patrick Nioyke, the secretary of the Kenyan Ministry of Energy, announced, according to ITAR-TASS
"We have signed a memorandum of understanding, but we are willing to abandon it," representative of the ministry said in an interview with Reuters. "There is an embargo on Iranian oil supplies. We do not want to be involved in the intricacies of international governmental problems."
Indeed, Kenya apparently recently approved annual imports from Iran of 4 million tons of crude oil, equivalent to 80 thousand barrels per day. However, the British Foreign Office insisted on a revision of these agreements by Kenya. "Kenya should carefully consider the contradiction between its plans and the measures (of pressure on Iran), or the breaking of these measures," the British Foreign Ministry warned. It seems that Nairobi has heard these warnings and rightly judged that Iran actually is not a monopoly on the world oil market.
In addition, some "old" customers of Iranian raw materials have abandoned their cooperation with Tehran. Thus, Reuters cites sources in the Japanese government as saying that Japan will decline Iranian oil supplies in July. This loss is quite significant. Japan, with its advanced and energy-intensive economy, is not just one of the major Asian importers of "black gold" from various countries, including Iran. After the accident at the nuclear power plant "Fukushima-1" in Japan, almost all nuclear reactors are closed, and attempts to resume their operation cause severe public protests. If in these circumstances Japan renounces Iranian oil, this will be a very bad sign for Tehran. Earlier, South Korea declined Iranian oil at the insistence of the West. As a result, Iranian oil exports continue to decrease rapidly: Iran currently exports only 1.2-1.3 million barrels of oil per day, Reuters reports. In contrast, in May 2012 the export of Iranian oil, according to the same agency, was 1.5-1.6 million barrels daily. Last year, Iran exported 2-2.2 million barrels of oil per day. The reduction of exports by one million barrels means that the treasury of the Islamic Republic is losing about $90 million a day.
The fact that there will be a certain negative effect on the economy of the IRI caused by the European sanctions is confirmed by the specific responses of Tehran, which are more and more nervous. For example, the Iranian authorities announced the creation of a stabilization fund of $14 billion for development of the oil industry in the conditions of the EU oil embargo, according to Fars.In addition, in February Rostem Kassemi, the Iranian Oil Minister, sent a letter to Abdul-Karim Luaibi, the head of OPEC, when a number of Arab countries expressed interest in replacing Iran as a supplier of oil to European countries, the news agency Mehr reported. In his letter, Kassemi called on the OPEC members not to support the oil embargo against Iran.
Iran has essentially disavowed its own statements about the ineffectiveness of the new EU sanctions by these “responses”. Indeed, why does Iran need to create a stabilization fund, to try to keep the OPEC countries not supplying their oil to Europe instead of Iran, and even to threaten the overlap of the Strait of Hormuz (this will apparently provoke a reaction from the U. S. and its allies), if the EU sanctions will have no effect on its economy? Was it not easier for Tehran to proudly ignore these "inefficient" Western sanctions, which are a "mosquito bite for Iran," to use the terminology of President Ahmadinejad? But now, the Iranian president has still publicly urged his people to "resist the heaviest sanctions imposed on our country."
As might be expected, the U.S. State Department has already responded to Tehran's newly-voiced threat to block the Strait of Hormuz, which accounts for about 40% of global oil exports by sea. Any attempt by Iran to impede shipping in the Strait of Hormuz would be a violation of international law, Victoria Nuland, State Department spokesman, said. According to her, this is not the first time the threat of closing the Strait of Hormuz has been heard by the U.S., but shipping in this strait is governed by international law and not by the resolution of any one country.
But most importantly, immediately after the entry into force of the oil embargo of the EU, the commission of the Iranian parliament on national security and foreign policy produced a bill suggesting a ban on transportation of oil through the Strait of Hormuz. This looks like blackmail. Let us recall that almost all the oil exports of the countries of the Gulf are carried out by passing through the Strait of Hormuz. And Iran already has the experience of a "tanker war” after its conflict with Iraq.
"The Strait of Hormuz has an international status, and all countries can use it. On the same grounds, war and merchant ships can pass through the strait. Any attempt by Iran to close the strait or to force ships to get permission from the Iranian authorities to pass would be contrary to international law and will not be recognized by the United States," Nuland warned, according to RIA Novosti. "I will not go into hypothetical details, but we have been giving a clear message for years and decades that we intend to do everything necessary to ensure the openness of the strait," she said.
Many analysts believe that the blocking of the Strait of Hormuz by the Iranian Navy or its mining could become a classic casus belli. In recent months, the U.S. has stepped up its military forces in the region. Iran is also sabre-rattling, conducting exercises and testing sea-launched and anti-ballistic missiles. Of course, the United States is not actively looking for a suitable "reason" for a very expensive and difficult war against the IRI, taking into account that it is not very difficult to justify an intervention. In the end, it is being observed repeatedly in the modern times. But Washington is not interested in the beginning of a new war in the Gulf now. Another thing is that if the strait is blocked, the U.S. will not have many alternatives.
In this case the threat of Iran to block the Strait of Hormuz has already provoked “fever” on the global oil market. Thus, the stock price of the oil in New York on July 3 increased by 4.6% to 87.57 dollars p/b, reaching its top price since 30 May. However, the Strait of Hormuz has not yet been blocked. And this gives us hope that a final turn to the "use of force scenario" will not take place, and the Iranians are also aware that the consequences of a military strike by the sole superpower will be extremely difficult for them. It is also possible that Tehran will try to play the "Hormuz" card in the negotiations regarding its own nuclear program.
However, it is clear that the situation in the region is developing according to a quite dangerous scenario. The talks in the format of the Group of Six continue, but each successive fruitless meeting leaves fewer and fewer hopes. The sanctions, both the UN ones and the sanctions imposed by the United States and the European Union, erode the ruling regime of the IRI. But they can also push it into the most unexpected adventures, especially if Tehran misunderstands the restraint of the West and comes to the conclusion that Washington and Brussels just do not dare to resort to a "military response." In short, the Gulf still looks like a "time bomb"
