Something to laugh about:
the TEPIX (Teheran Stock Price Index) is up almost 30 % since January 2011. This isn´t really a surprise because it´s basicly a derivative of crude oil.
http://www.businessweek.com/news/201...aft-shows.htmlEU to Consider More Sanctions on Iran, Summit Draft ShowsDec. 9 (Bloomberg) -- European Union governments will consider imposing stiffer sanctions on Iran amid “serious and deepening concerns” over the country’s nuclear program, according to a draft EU summit statement.
The bloc will “proceed with its work related to extending the scope of EU restrictive measures and broadening existing sanctions by examining additional measures against Iran as a matter of priority,” it said in the draft.
The statement didn’t spell out a possible ban on the purchase of Iranian oil, a measure Greece blocked last week. Foreign ministers will decide on the next set of sanctions on Jan. 30, according to the EU draft, which will be completed when the summit ends today. The bloc is weighing a boycott after a Nov. 8 report from the United Nations’ International Atomic Energy Agency said Iran was working on a nuclear weapons program as recently as last year, a charge the Islamic republic denies.
Stricter sanctions against Iran, the second-biggest producer in the Organization of Petroleum Exporting Countries, may raise the nation’s oil exports to Asia and increase prices for similar-quality crudes from Russia and the Middle East, Barclays Plc said.
If the EU halts dealings with Iranian lenders, including the central bank, Iran would lose customers who buy 500,000 to 800,000 barrels a day of its crude exports, which total about 2.3 million barrels, the bank said.“
Spain, Italy, Greece, Turkey and France are significant buyers of Iranian crude,” Helima Croft, a Barclays analyst in New York, said in the report. “Should an oil embargo and the associated displacement of supplies go ahead, Mediterranean refiners would likely face a noticeable increase in costs, as the heavy nature of the Iranian crude that comes into Europe can only be substituted by Russia and Saudi Arabia.”
In the op, I named Statoil and Petrobras as two possible profiteers from the Iran story. Here is one of the possible big loosers, a candidate for short selling. Italian oil giant ENI. Keep in mind that the company´s valuation is already cheap, though.
http://www.ogj.com/articles/2011/12/...-billions.htmlTighter sanctions on Iran could cost Eni 'billions'
LOS ANGELES, Dec. 9
12/09/2011
By Eric Watkins
OGJ Oil Diplomacy Editor
Eni SPA Chief Executive Officer Paolo Scaroni said tighter sanction on Iran could cost the Italian firm as much as $2 billion in crude oil owed to it by National Iranian Oil Co.
“We are a little bit more worried about the payments of crude that NIOC are making to us for our previous activities,” said Scaroni, referring to billions of dollars worth of contract work undertaken by Eni during 2001-09.
However, Scaroni also expressed the belief that the payment in kind would be exempt from any sanctions regimes at the moment, saying, “We feel that this will be exempt from any ban. We feel there is a difference between importing crude and receiving crude.”
Scaroni also said he doesn't see major problems for Eni's refineries in Italy if the European Union does strengthen the sanctions regime on Iran.
“Yes, there is a problem in the quality of crude so we should make some shifts, but our refineries should be able to cope with this issue,” Scaroni said, adding that Iran’s crude makes up about 15% of Italy’s oil imports.
Scaroni’s view differs from other analysts who said EU sanctions on Iran's oil exports will hurt European refiners that rely on the country’s crude, particularly Greece, Italy, and Spain.
Analyst Manouchehr Takin of the Centre for Global Energy Studies (CGES) research group said the absence of Iranian oil exports would hurt Europe more than it would Tehran. Takin said the Europeans are importing nearly 500 million b/d, with refineries in Greece, Italy, and Spain being the main customers. Takin said these refineries would suffer financially because they cannot easily replace Iranian crude with other crude.
Takin noted in particular that refineries in Europe—especially those in Italy, Spain, and Greece, which are having financial problems—would suffer more than Iran would in its search for other customers.
In the event of EU sanctions, Takin said Tehran could find customers elsewhere for its oil but would probably have to accept lower prices.
He noted in particular that Iran has about 2.3 million b/d in exports, mostly in Asia, the Far East, and China, and that the Middle Eastern country would try to sell more oil into those markets.
However, Takin said Iran's bargaining position for its customers would be a bit weaker, especially if the Chinese and Indians know that the European refiners are not competing with them.
That makes something of a loss for Iran, Takin said, but he insisted that the financial loss would be more immediate and larger for the refiners in Europe.
Analyst Eugen Weinberg of Commerzbank said sanctions would most affect Italy, Spain, and Greece, the three Euro-zone nations that are in the grip of severe debt problems.“There is allegedly consensus in the EU about the need to impose an oil embargo on Iran,” Weinberg wrote in a research note, adding that it remains to be seen whether this step is actually taken.
“After all, crisis-ridden Italy, Spain, and Greece rely on oil from Iran; an embargo would force them to source their oil requirements elsewhere at considerably higher prices,” Weinberg said.
“Maybe the aim of sanctions is to help Italy, Spain, and Greece to collapse and make the EU a smaller club,” said one trader, as efforts toward an EU-wide ban on Iran oil supply come under continued debate.
EU foreign ministers imposed sanctions on an additional 143 firms and 37 individuals in Iran, after last month’s report by the International Atomic Energy Agency charging Tehran with efforts to produce a nuclear weapon.
However, the ministers have also threatened to extend the scope of punitive measures against Iran, including new measures by late January next year that would target the financial system as well as transport and energy.
Last month, Iran’s Oil Minister Rostam Qasemi said sanctions recently imposed against his country by the US, the UK, and Canada will present global oil markets with problems in securing oil of equal quality and quantity. “Taking into account the quality of Iranian oil and Iran's second top ranking in terms of oil production, the consumers cannot be provided oil with such a quality. So, there is no alternative for Iranian oil supply,” Qasemi said (OGJ Online, Nov. 29, 2011).
IRAN MP SAYS MILITARY TO PRACTISE CLOSING STRAIT OF HORMUZ TO SHIPPING; IRANIAN MILITARY DECLINES TO COMMENT - RTRS
http://www.zerohedge.com/news/iran-m...hormuz-closure
Brent crude spiked massively on this news.
Last edited by swissaustrian; 12-12-2011 at 08:30 AM.
Iran has closed the strait of Hormuz for a military exercise according to zerohedge:
WTI Crude oil
Gold
Another reason to short ENI
http://ransquawk.com/headlines/192076S&P places ENI (ENI IM) A+ long-term rating on watch negative
Intesting development in the UAE:
http://www.washingtonpost.com/busine...PVO_story.htmlUAE official: Crude pipeline to bypass Strait of Hormuz almost ready, but no opening date set
DOHA, Qatar — The oil minister of the United Arab Emirates says a new crude oil pipeline that will bypass the strategically sensitive Strait of Hormuz is almost finished.
Mohammed bin Dhaen al-Hamli made the comments on Monday. He spoke to reporters on the sidelines of an oil industry meeting in the Qatari capital Doha.
He declined to say when the pipeline would open, though his comments suggest it could become operational soon.
The Abu Dhabi Crude Oil Pipeline project aims to ship crude from the UAE’s main oil producing region to the port of Fujairah on the country’s Gulf of Oman coast.
That would allow some of the OPEC member’s oil to avoid the Strait of Hormuz, access to which is shared by Iran and Oman.
Story about the war game is beeing confirmed by Bloomberg
Oil Surges as Iran Plans Drills to Close Strait of Hormuz
Oil surged above $100 a barrel as Iran's military prepared to hold drills for closing the Strait of Hormuz, a bottleneck for oil exports from the Persian Gulf.
The military maneuvers will be "soon," the state-run Fars news agency reported, citing Parvis Sorouri, a member of the parliament's national security and foreign policy committee. "If the world wants to make the region insecure, we will make the world insecure."
Crude for January delivery gained $2.53, or 2.6 percent, to $100.30 a barrel at 10:02 a.m. on the New York Mercantile Exchange. Earlier, futures touched $101.25 a barrel. Prices have risen 9.8 percent this year.
Read more: http://www.sfgate.com/cgi-bin/articl...#ixzz1gQjmAMd8
HORMUZ STRAIT IS NOT SHUT: IRAN FOREIGN MINISTRY SPOKESMAN - BLOOMBERG
Lew Rockwell on Iran and oil
AGRO, CRESY, and POT are farm stocks I am looking to buy at the moment.
What I say is for entertainment purposes only!
Mark 10:45 The Son of Man did not come to be served, but to serve, and to give His life as a ransom for many.
"If you want to make a lot of money, resist diversification." - Jim Rogers
exc website to see what is going on in the middle east , things you will not see on our news very much, it's the Debka files.
http://www.google.com/url?sa=t&rct=j...SPbbSo7uLfSgvA
That was a great little piece with Lew ROCKWELL. One of the main reasons I started farming, because food is priceless.
Agriculture is our wisest pursuit, because it will in the end contribute most to real wealth, good morals, and happiness.
-Thomas Jefferson
http://www.reuters.com/article/2011/...7NK3BX20111220Rome meeting analyses Iran oil embargo
Dec 20 (Reuters) - Diplomats from a so-called "group of like-minded nations" met in Rome on Tuesday to discuss further sanctions against Iran, diplomatic sources said.
The closed-door meeting is taking place under the auspices of the Italian foreign ministry and participants considered it a "technical meeting," an Italian diplomatic source said.
Diplomats said it would consider the arguments around a possible EU oil embargo against Iran. A decision may be made when EU foreign ministers next meet in January.No decisions are expected to emerge from Tuesday's meeting.
Participants are countries that have imposed bilateral sanctions on Iran over its nuclear program that go beyond U.N. Security Council sanctions.
The group includes the United States, the European Union and several European nations, Australia, Japan, South Korea and other countries but it was not clear if all of them were represented. The United States is attending.
The small informal group has been meeting for two years and its goal is to share information and discuss the next steps in the sanctions process.
The United States has long banned Iranian crude imports and last week Congress voted through restrictions on dealing with the Iranian central bank. The White House must decide whether or not to grant waivers to major Iranian oil importers like China, India and South Korea that need to deal with the bank to pay for Iran's crude.
http://online.wsj.com/article/BT-CO-...13-702460.htmlIEA: Iran Oil Capacity Seen Below 3M B/D By 2016 Due To Sanctions
LONDON (Dow Jones)--Iran's oil production capacity is forecast to decline by 890,000 barrels a day to just under 3 million barrels a day by 2016 due to tighter U.S. and European Union oil sanctions targeting the country's upstream oil and gas sector, the International Energy Agency said Tuesday.
A separate mooted E.U. ban on Iranian oil imports would leave Mediterranean refiners confronting higher prices for replacement crude from producers such as Saudi Arabia, Iraq and Russia, the IEA said.
However, Saudi Arabia's spare oil capacity may not be a precise match for the significant volumes of Iranian heavy crude involved, the IEA said in its monthly oil market report.
Mediterranean refiners are believed to have already approached Saudi Aramco to enquire about extra cargoes of Arab Light, the closest quality match for Iranian Heavy, although much of the current Saudi spare capacity may instead be held in the form of less suitable Arab Medium or Arab Heavy, the report added.
http://kingworldnews.com/kingworldne..._to_Spike.htmlRickards sees war with Iran, big price impact on oil and gold
With investors concerned about the recent plunge in gold and silver and questions about what is going to happen with Iran and the Straits of Hormuz, today King World News interviewed KWN resident expert Jim Rickards. Rickards has gained international recognition for his deadly accurate predictions regarding moves by central planners. Rickards let KWN know that the US is headed to war with Iran: “Yeah, it’s very serious, Eric, actually grave. The big thing to get right in this case is that Iran will not be allowed to have a nuclear weapon, period. That’s just not going to happen. Now we know they (Iran & its allies) are pushing towards it and so there is going to be a train wreck.”
“The Obama administration has pursued diplomacy very vigorously. My view is it has failed. (The other possibility) would be a regime change. I say the war has already begun. There’s a lot of sabotage, there have been assassinations, strange things blowing up, rebellion. So there is enormous pressure being put on the Iranian regime from many directions. All of this is designed to destabilize the regime.But I think the regime is too entrenched, the Iranian Revolutionary Guard Corp are to ruthless. They actually buy cranes, they hang people not from scaffolds, but from cranes, and they are buying more cranes because they are hanging more people. They’ll do whatever it takes, so I don’t see regime change.
What’s left? Well, what’s left is war and that is, unfortunately, where I see this heading. There is a lot of maneuvering going on already. The Iranians have a submarine fleet that’s kind of interesting because they run on battery power, so they are extremely quiet and hard to detect. They could take out one or two US vessels.They also practice these swarm techniques. They have these speed boats, like in Miami Vice, that type of boat that can go 50, 60 knots. (They are) much faster than any naval vessel. They load them up with explosives, they put suicide crews on them....
“If you send out one or two, you (the US) would swat them like flies. But if you send out fifty of them, even with these kind of laser guided gatling guns they have on some of the vessels, you can’t take all of them out. So the chance that one of them sinks one of our vessels is not insignificant.
They (Iran) could close the Straits of Hormuz. The (US) Navy would come in and clear it, but that’s not like moving traffic cones on a highway construction site. That would probably take weeks because there are mines and minesweeping is a very tedious and dangerous thing that takes a long period of time.
So it could get much messier, much uglier and much more deadly than I think a lot of people realize. Of course we all know what would happen to the price of oil. It would be up at $200 a barrel of higher. So, let’s hope it (war) doesn’t happen, but that’s one we could see happening in 2012, maybe even by the summer.”
When asked about the call, from Egon von Greyerz, for gold to move into the $3,000 to $5,000 range in 2012, Rickards responded, “Well, it’s certainly possible, I would not rule it out. I definitely see it in that range, so I agree completely with Egon that’s where it is heading.
Timing is always tricky. I have the direction and the magnitude right, but I see it as 2013, then going into 2014, I can definitely see it (gold) getting to that level. 2012 might be a stretch, but it could happen. Look, I would absolutely not rule it out, but it’s probably more in the next two years, rather than in the next year.”
Rickard's "Deadly accurate predictions"? Like when he said in 2009 that gold would go to $10,000 an ounce (gold was $1140 at the time)?
https://www.caseyresearch.com/gsd/edition/76
A year ago he revised that down to $4,000 to $11,000.Jim Rickards' Gold Price Prediction Tops $10,000
http://www.resourceinvestor.com/News...edictions.aspx
These 6 analysts see gold price going parabolic to +$10,000:
1. Mike Maloney, $15,000
2. Ben Davies, $10,000-$15,000
3. Howard Katz, $14,000
4. Dr. Jeffrey Lewis, $7,000-$14,000
5. Jim Rickards, $4,000-$11,000
6. Roland Watson, $10,800
Last edited by Zippyjuan; 12-31-2011 at 02:43 PM.
Zippy, I´ve followed your first link and I´ve taken the time to read the entire article. I don´t see a difference between the first and the second statement. The headline doesn´t cite Rickards correctly. The text itself says:Originally Posted by Zippyjuan
Yesterday, Jim Rickards, director of market intelligence for McLean, Virginia-based consulting firm Omnis, was allowed onto CNBC again to make gold-friendly comments. The first time he was on CNBC back in September, he said When you own gold, you're fighting every central bank in the world. This time he said that gold should easily reach $2,000/ounce next year... and if gold should start being considered money again, it would have to rise to between $4,000 and $11,000 to support the big increase in the world's money supply. This GATA dispatch contains his original September CNBC interview... along with the new one. Both are absolutely worth watching... and you can hear a pin drop in the studio when he's talking about gold and where the price is going... and the link is here.
Oil is up big time today on USD weakness and intensifying harsh rhetoric from both the Iranians and the US.
WTI is up 4 % at $ 103
Brent is up 4.6% at $ 112
Gold is also rebounding from it´s dip in late 2011: + 2.1 % at $ 1604
Here is what the always behind the curve mainstream media has to say about this today:
http://www.cnbc.com/id/45857310Iran Oil Tension Boosts Prices: The New Libya?
Oil prices surged nearly $4 per barrel on Tuesday morning on concerns about supply disruption ensuing from a possible confrontation between the U.S. and Iran. Front month WTI crude prices reached a intraday high of nearly $103 a barrel. Technically, February WTI crude futures need to breakout past the most recent high of $103.37 for a drive to $104 and higher.
Brent crude oil prices remain in an upswing as well, hitting a session high of $111.58 per barrel, and a close above $109.59 signals an emerging bull run advance, according to technicians. For Brent crude, the next key level to watch is $112.70, the 200-day moving average.
Traders say Iran is the new Libya. Just as civil war in Libya caused crude oil prices to spike to near $115 a barrel in 2011, escalating tensions between the Iran and the West could cause oil prices to reach those levels again early this year. Iran is the world's fourth largest oil producer, with production at 4.245 million barrels daily in 2010, according to the 2011 BP Statistical Review.
Earlier on Tuesday, Iran's army chief warned the U.S. Navy not to return an aircraft carrier back to the Persian Gulf after it was removed due to Iran's naval exercises in the area. Iran's threat comes after it test fired missiles in the Strait of Hormuz over the weekend and the U.S. formalized extending sanctions on any entity dealing with the Iranian Central Bank. The euro-zone nations should decide by the end of the month whether to place an embargo on Iranian oil imports.
"Some of the rhetoric can at times be part of a PR show but it can quickly spin out of control," said Petromatrix energy analyst Olivier Jakob. "Iran asking a departing U.S. aircraft carrier not to return is almost forcing the US Navy to send it back to the Persian Gulf."
Iran has said it could shut the Strait of Hormuz, a major waterway that the EIA calls "the world's most important oil chokepoint due to its daily oil flow of almost 17 million barrels in 2011."
Iran's currency is already feeling the pinch of a possible oil ban — with the rial falling 40 percent vs. the dollar in the past month.
"In this environment of increasing tensions and rhetoric, global asset managers are unlikely to give up their long exposure to oil ... at least until we can have a clearer idea as to what the Eurozone decides on an Iranian import ban and the Iranian reaction to the Eurozone decision," Jakob said.
He recommended buying the very back of the curve in Brent crude oil, buying December 2016 Brent at $90 in the current Iranian geopolitical environment.
Some traders said they're hedging Iranian risk to oil prices by buying "out of the money" calls. Call options from $110 to $130 have been trading, said Paramount Options president Ray Carbone, on concerns about Iran as well as possible strikes in Nigeria.
Crude Surges On News Europe Agrees To Ban Iran Oil Imports
http://www.zerohedge.com/news/crude-...an-oil-imports
IDIOTS, China is gonna buy it all. European consumers are going to pay more at the pump.
Last edited by swissaustrian; 01-04-2012 at 08:57 AM.
Here we go:
http://www.presstv.ir/detail/219268.htmlChina rejects US-led sanctions on Iran
http://www.presstv.ir/detail/219297.htmlS. Korea disregards US oil sanctions
EU politicians want higher gas prices for their citizens:
http://ransquawk.com/headlines/196312Germany's foreign minister says sees oil embargo in the coming days
The fall of the Iranian rial: too much of a good thing?
In Tehran’s volatile currency market the rial fell to its lowest level ever today (January 2, 2012), the US dollar closing above 17,000 rials. The devaluation of the rial that started at a gradual pace over a year ago, and was largely expected and welcomed by economists, accelerated, going from less than 11,000 to around 15,000 rial per dollar in a matter of weeks. The additional fall in rial of about 10% in the last two days raises the question if the correction has gone too far. To answer this question one needs to have some idea of what is the right rate of exchange for Iran’s currency, something that you are unlikely to find in standard economics textbooks. There are two reasons why the market clearing price is not a good guide to the value of the rial: sanctions and oil.
Financial sanctions against Iran, which intensified this week with the signing into law of the latest bill by President Obama extending them to transactions with Iran’s Central Bank, essentially create a segmented market for foreign exchange in Iran. One market is for foreign currencies held in various accounts belonging to Iranian banks, and the other is for foreign currency notes or paper money. Because of the sanctions, there is demand for paper money for certain transactions for which dollars or euros in foreign banks are of little use. Iran has reportedly about $80 billion in bank accounts around the world, which it cannot easily spend. So, for most transactions people are forced to buy paper currency in the Tehran market, or buy it in Dubai and have it shipped in. For example, to send money to your daughter in Malaysia, these days you have to find a trustworthy traveler to take it for you because the Central Bank cannot make the transfer. So much for smart sanctions.
This market is relatively small, however, so its price can fluctuate rapidly. Some of the increase in the value of foreign currency reported in recent weeks is probably of this kind, reflecting the tightening of sanction. As more people in need of dollars enter this market –, manufacturers in need of imported parts, parents paying for their children’s education abroad, and the like — the price can shoot up quickly.
So, the two tier exchange rates system that has recently emerged is in part the result of sanctions, not policy. It is therefore not to be confused with the policy-induced multiple exchange rate system that existed before 2000-2001. At least a part of the current gap between the two rates is because there are two types of foreign currencies, paper money and electronic bank accounts. The government has little control over this gap, unless it can find a way to bypass the sanctions and enable Iranian importers to use its holdings of foreign currency. We do not know what the equilibrium exchange would be if sanctions did not exist because we do not know the size of the market for paper currency.
The second reason why it is difficult to determine the right exchange rate lies at the heart of Iran’s oil-based economy. Roughly speaking, and ignoring capital accounts, in a normal economy the exchange rate reflects two productivities, the productivity of workers producing for exports at home relative to the productivity of workers in countries from which imports originate. Since in a balanced economy productivity in the export sector is close to the average level of productivity in the economy, the exchange rate reflects relative productivity levels in the two countries. So, if in one country demand for imported goods expands in line with increase in productivity, its currency need not depreciate; higher productivity would help pay for the additional imports because it would make the country’s exports more competitive.
But if exports are mostly oil or oil related products, this mechanism would fail to work. (Iran’s non-oil related exports amount to less than 5% of total exports.) The oil sector produces a lot of value with relatively few workers, as if these workers were much more productive than their fellow workers in the rest of the economy. But “productivity” in the oil and oil-related sectors such as petrochemical depends on the price of oil and on how much the government decides to extract from its reserves, two variables that have nothing to do with average productivity. The world price of oil is beyond government’s control, but how much it decides to extract (or more precisely how much of its oil revenues it decides to inject into the economy) does affect the exchange rate. The fact that governments of oil-exporting countries can influence the equilibrium exchange rate by merely selling more oil suggests that the textbook case of supply and demand is not all that relevant. The market for foreign exchange is dominated by a monopolist –the government — which has to decide on its oil exports and the exchange rate simultanously.
I do not know how one would go about finding the optimal level at which the government should set the exchange rate (by extracting more or less oil or by brining more or less of the oil money into the economy). But I do not need to know the optimal rate to know that, until a few weeks ago, Iran’s currency was highly overvalued. The oil boom of the last decade that brought $80-$100 billions a year in oil revenues prevented the rial from falling in value despite rising inflation in Iran. As a result, imports became increasingly cheap, undermining domestic production.
The figure below shows that while Iran’s price level was rising fast (the line in green) its exchange rate remained rather steady (red), causing the real effective exchange rate (EER, in blue) to increase; that is, Iran’s currency appreciated relative to the currencies of its main trading partners. Iran’s consumer price index more than doubled during 2005-2010 while the rial lost less than 15% of its value, causing the EER to increase by 50%. If we take these numbers as our main guide for deciding how far is too far for the rial to fall, 50% would be about right. This simple analysis then suggests a band between 15,000-16,000 rials per dollar.
This adjustment is long overdue and the impact of the real appreciation of the rial on the real economy has been quite severe. Because Iran’s economy is rigid and workers move slowly between sectors, the shock to the tradable sectors has caused loss of output and increased unemployment in tradable sectors, such as textiles. If the oil boom hurt Iran’s tradable sectors, can sanctions do the opposite by protecting domestic production from foreign competition? The answer is yes and no. Yes, because as Iran finds it increasingly difficult to pay for imports using its oil money deposited in foreign banks, and has to resort to barter and other special arrangements for tis import, domestic production will gain shelter from foreign competition. No, because much of domestic production depends on imports of intermediate goods, which will be also cut as a result of tougher trade conditions.
The fall in rial is just one part of this process of adjustment. As it falls it sets both forces into motion: the good (more protection) and the bad (costly inputs for industry and agriculture). To answer the question that I posed at the outset for this post more accurately – has rial fallen too much? – requires knowing which of these two factors is stronger.
Today, EU countries actually agreed on an oil embargo:
read moreEuropean Union diplomats agreed to place an embargo on the import of Iranian oil with a phase-in period to July 1, an EU official said.
http://www.bloomberg.com/news/2012-0...anian-oil.html
http://en.rian.ru/world/20120129/171014353.htmlIran Warns Oil Prices May Jump to $150 after EU Sanctions
The EU oil embargo is backfiring at Europe. EU leaders are digging a hole for themselves:
http://www.washingtonpost.com/busine...QyQ_story.htmlIranian lawmakers call for cutting off oil supply to EU over Europe sanctions
More than two-thirds of Iran’s lawmakers have endorsed a statement calling for cutting off oil sales to the European Union before EU sanctions on their country go into effect.
...
On Saturday, Iran’s oil minister said the country would “definitely” cut off oil to “hostile” European countries.
http://www.presstv.ir/detail/225692.htmlIndia increases Iran oil imports
India has increased oil imports from Iran to become the Islamic Republic's largest customer last month, ignoring recent sanctions imposed by US and EU on importing Iran’s oil.
According to The Wall Street Journal Iranian crude exports to India rose to 550,000 barrels a day in January, up 37.5 percent from December 2011.
As you can see below, sanctions are isolationist actions.
http://af.reuters.com/article/energy...120210?sp=trueIndonesia says would study any barter approach from Iran
* Indonesia says not averse to barter trade with Iran
* Might consider gas-for-food deals
* India trying to work around sanctions (Adds quotes, background)
By Yayat Supriatna and Niluski Koswanage
JAKARTA/KUALA LUMPUR, Feb 10 (Reuters) - Indonesia, the world's top palm oil producer, would study any approach by Iran to trade by barter, it said on Friday, as tightening sanctions hurt Iran's ability to pay for basic staples.
Western financial sanctions have crimped Iran's purchases of grain, cooking oil and tea, and barter could provide one way to resume shipments. Iran may turn to countries that have large Muslim populations and resources, such as Indonesia and Malaysia, for its needs. Commodities traders have told Reuters Iran is offering gold bullion in overseas vaults or tankerloads of oil to secure food for its 74 million people, but could not give specific details on deals. Barter deals are often between governments rather than companies.
Indonesian Trade Minister Gita Wirjawan said the government would consider proposals but had not received any overtures from Iran. Trade officials said such deals have proved troublesome in the past.
"We have not got barter trade proposals from the Iranian government so far. If they really want to have barter trade with Indonesia and ask us to do so, then we have to study it first before doing the barter," Wirjawan told reporters, adding if any barter trade was discussed gas would be preferable to oil.
New sanctions imposed by the United States and European Union to punish Iran for its nuclear programme do not bar firms from selling Iran food but they make it difficult to carry out the international financial transactions needed to pay for it.
Iran has not approached Malaysia for barter deals to keep its palm oil supplies flowing, two Malaysian government sources told Reuters on Friday, after traders said the country has stopped shipping the vegetable oil to Iran this year.
One said Malaysia is no longer keen to do barter trades after facing problems in a deal with North Korea in 2009 when $20 million worth of palm oil was to be exchanged for cash and fertiliser components.
"No matter how you do it, these countries don't have enough to barter. So Malaysia is not going to do barter trades for the time being," said the source, who had direct knowledge of the matter. Malaysia is the world's number two palm oil producer.
"We are more concerned if there are declines in exports in our top markets like India and China rather than Iran," the source added, declining to be identified due to the sensitivity of the issue.
DUCKING FOR COVER
Barter deals have grown more likely as foreign banks find it too difficult -- or simply not worth the chance of damaging their links to the United States -- to trade with Iranian banks.
U.S. sanctions have also sought to isolate Iran's central bank as a way of choking off hard currency flows.
Singaporean firms have stopped supplying Iran with Indonesian palm oil on concerns over the country's ability to make payments in the wake of Western sanctions, trading sources in Singapore have said.
Singapore banks will not risk getting cut off from access to U.S. dollar flows as that will kill their business.
"For most financial institutions, they'll run away the moment they see Iran," a senior banking source said on Friday.
Barter trade isn't without its difficulties, Indonesian officials said.
"We have some experience in doing counter-trade with several countries although we were not so successful on the trade," said Deddy Saleh, Director-General of Foreign Trade at the Trade Ministry, pointing to the complexity of past deals.
"It should be arranged under a government to government agreement umbrella although the goods which will be counter traded are in the hands of private companies," Deddy said.
CHALLENGES
Barter trade for Indonesia's palm oil sector was a clear example of the challenges, said Fadhil Hasan, Executive Director of the Indonesian Palm Oil Association (GAPKI).
"It is rather difficult to do barter trade, and normally there should be a government role. However, especially for palm oil, I think it would be difficult because palm oil is a high demand commodity. Indonesian palm oil producers, I suppose, will be reluctant to participate in the barter trade."
The Malaysian government has had a longstanding barter trade facility and more than 20 countries have used this scheme including Iran, North Korea, Pakistan, Myanmar, Iraq, Cuba and Russia. About half a billion U.S. dollars is allocated by the Malaysian government for the scheme and about half has been used up, local media reports show.
Indonesia has done barter type trades before at a government level. In 2003-2004, Indonesia swapped palm oil and rubber for fighter planes from Russia, and it has also exchanged civilian planes for rice from Thailand.
"We don't have political problems with Iran and in principle we are very open if there is a trade-off offer," said Mahfuz Shidik, of the Islamic Prosperous Justice Party and head of the Indonesian parliamentary group handling foreign affairs.
"Also, if due to sanctions the impact is felt by the food supplies of the Iranian people, Indonesia must respond by sending humanitarian aid."
India, too, has a long history of barter trade involving food for military equipment during the Soviet era and the government says it is not bound by U.S. and European sanctions.
Rahul Khullar, trade secretary of India, one of Iran's main trade partners, said on Thursday: "If the EU and the U.S. both want to stop exports to that country, please tell me why I should follow suit? Why shouldn't I take up that business opportunity?"
Under U.S. pressure, India shut down a payments system for trade with Iran last year. Under a new system, Indian firms are expected to pay for 45 percent of their Iranian oil imports in Indian rupees to avoid going through international banks. Implementing the system has been stalled while Indian authorities work out whether to subject such payments to tax.
The Saudis are doing their part to support the war efforts against their arch enemy, I doubt they could actually keep oil (WTI, not Brent) below $100:
Video at link: http://www.cnbc.com/id/46285933Saudi Arabia Will Not Let Oil Go Above $100: Prince
An "element of fear" is playing into the price of oil despite higher supply and decreasing demand, Saudi Prince Alwaleed bin Talal al Saud told CNBC Monday.
Bin Talal, the billionaire member of the Saudi Arabian royal family who runs the Kingdom Holding Co., said the fear comes from "what may happen with Iran and the possibility of closing the Hormuz Strait."
But Saudi Arabia has already said it will not let the price of oil [WTI, not Brent], which closed Monday around $97 a barrel, go above $100, bin Talal said.
"We can use our leverage, our excess capacity to be sure to pump more [oil] if needed so it will not impact the consumer countries while they’re getting out of their recessions slowly but surely," the prince said.
As for Iran, he said it is important for the U.S. and other nations to put sanctions on the "renegade country" to force its government to negotiate. Issuing an ultimatum of war would push Iran to the "desperate move" of blocking the vital oil shipment waterway.
"I believe a solution is not impossible with them," bin Talal said of Iran. "A dialog is the best way to do it."
But if the strait is blocked he believes the U.S. can reopen the strait "very quickly." He added he wants a "nuclear-free" region, which means Israel should give up its nuclear arsenal, too.
He said the European debt crisis is "pulling down the growth of the world economies" and it is important for the European Union countries to "get their house in order because this can't go on indefinitely." Greece leaving the EU would set a bad precedent, he added, and could lead to the disintegration of the euro.
The prince, Citigroup's [C 32.91 -0.75 (-2.23%) ] biggest shareholder, said CEO Vikram Pandit has brought the bank "out of the wilderness" and expects the company to pay a dividend or buy back shares sometime this year, once it gets clearance from the Federal Reserve .
Bin Talal, also a major shareholder in News Corp [= FOX] . [NWSA 19.18 -0.03 (-0.16%) ]and Apple [AAPL 494.744 1.574 (+0.32%) ], said he recently invested $300 million in Twitter, saying the huge number of its users makes it a "force to be reckoned with." He hasn't invested in Facebook, he said, but "we never say no to anything."
And here comes another important headline
http://www.globalpost.com/dispatch/n...ear-weapons-ifReport: Saudi Arabia to acquire nuclear weapons if Iran tests bomb
Iran now launches an attack on the Petrodollar, we know how this ended for IraQ...
http://www.telegraph.co.uk/finance/c...ar-attack.htmlIran presses ahead with dollar attack
Last week, the Tehran Times noted that the Iranian oil bourse will start trading oil in currencies other than the dollar from March 20. This long-planned move is part of President Mahmoud Ahmadinejad’s vision of economic war with the west.
"The dispute over Iran’s nuclear programme is nothing more than a convenient excuse for the US to use threats to protect the 'reserve currency’ status of the dollar,” the newspaper, which calls itself the voice of the Islamic Revolution, said.
“Recall that Saddam [Hussein] announced Iraq would no longer accept dollars for oil purchases in November 2000 and the US-Anglo invasion occurred in March 2003,” the Times continued. “Similarly, Iran opened its oil bourse in 2008, so it is a credit to Iranian negotiating ability that the 'crisis’ has not come to a head long before now.”
Iran has the third-largest oil reserves in the world and pricing oil in currencies other than dollars is a provocative move aimed at Washington. If Iran switches to the non-dollar terms for its oil payments, there could be a new oil price that would be denominated in euro, yen or even the yuan or rupee.
India is already in talks with Iran over how it can pay for its oil in rupees.
Even more surprisingly, reports have suggested that India is even considering paying for its oil in gold bullion. However, it is more likely that the country will pay in rupees, a currency that is not freely convertible.
Last week, Indian state-owned group Hindustan Petroleum said that Indian businesses could not pay for Iranian crude imports in rupees unless the federal finance ministry exempted such payments from crippling withholding tax. This issue remains unresolved.
India and Iran have agreed – but not yet started – to settle 45pc of payments for Iranian oil in rupees. Iran will then use the currency to buy imports from India.
New Delhi currently spends about $12bn (£7.6bn) on Iranian oil each year, importing 12pc of the country’s needs from the country.
India pays for its oil in dollars, routed through a bank in Turkey after a previous mechanism was shut down in 2010. The Indian government has been resisting calls to stop importing oil from the pariah state.
“There have been problems with regard to Iran’s nuclear programme,” Manmohan Singh, India’s prime minister, said on Friday. “We sincerely believe that this issue can be and should be resolved by giving maximum scope to diplomacy.”
All of this means that the EU ban on Iranian oil imports, which comes into force on July 1, could hit Europe harder than it does Iran.
The country currently supplies 500,000 barrels of oil per day to the EU and there is a potential oil price spike in the offing should Iran pre-emptively stop the flow of oil to Europe, which it has threatened to do.
This could be disastrous to businesses that are already finding the economic climate tough.
“While Iran may be able to find markets for much of its oil output in Asia, the alternative sources of supply to Europe are still unclear,” Caroline Bain, a commodities analyst at the Economist Intelligence Unit, said.
“Until the supply outlook stabilises, the oil price is expected to continue to reflect this uncertainty rather than the likelihood of lower growth in global oil consumption in 2012.”
The worries are already sending ripples of concern around the world.
“While we have been listing the Iranian situation as a source of upside risk for a decade, there are some new factors that can make for a far more dangerous outcome, as the current drift of policy on both sides is creating the risk of a significant escalation,” Sudakshina Unnikrishnan, an analyst at Barclays Capital, said.
“Iran may close the Strait of Hormuz, causing an anticipated 50pc rise in crude oil prices, resulting in widespread economic havoc,” the Tehran Times columnist noted.
So the EU ban could be counter productive, as it keeps the oil price high. However, as long as President Ahmadinejad’s economic war doesn’t escalate into an actual war, we may manage to avoid a crippling oil spike.
Lol @ Europe.
The Chinese will just buy the oil and Europeans will foot the bill.
Politicians are so $#@!ing stupid. Either stupid or proactively seeking a war. Stupidity.
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