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Dow Jones: "More than a dozen foreign companies were engaged in the development of Iran's oil and natural-gas sectors during a 15-month period that ended in May 2011, according to an investigative group for the U.S. Congress. In a report released this week, the Government Accountability Office said 16 non-U.S. companies--hailing from China, India, Venezuela and other countries-- had been conducting commercial activity in the development of Iran's energy sector. The GAO said it didn't try to determine whether the activities violated U.S. sanctions against Iran. U.S. law has restricted U.S. and foreign companies from investing in Iran's energy sector, which provides a big source of revenue for the Iranian government. The sanctions are aimed at blocking the transfer of weapons and technology to Iran's prohibited nuclear and missile programs, and targeting sectors of the Iranian economy relevant to its proliferation activities, the GAO report said. Of the 16 companies that were identified as having commercial activities in Iran's energy sector, two of them have contracts with the U.S. government, totaling about $4 million, the report said. The GAO found that a number of foreign companies have recently stopped, or are in the process of stopping, their commercial activity. In the months since the GAO last reported on the activity of these foreign companies, in March 2010, 20 of the 41 companies identified then as having business in Iran 'have withdrawn or are withdrawing from commercial activity in Iran's energy sector,' the report said." http://t.uani.com/n6RisB
Reuters: "Italy's imports of crude oil from Iran, one of its main suppliers, spiked in May helping to offset a lack of crude from Libya, data from industry body Unione Petrolifera (UP) showed on Thursday. Italy, which depends heavily on energy imports because of scarce natural resources, boosted crude imports from Iran to 1.19 million tonnes in May from 765,700 tonnes in April, the data posted on UP's site, showed. Imports from Iran accounted for 11.6 percent of Italy's total oil imports in the first five months of 2011 which rose 3.7 percent year on year to 29.31 million tonnes." http://t.uani.com/r83D1E
WSJ: "Venezuela signed a $1 billion deal with Iran to build 10,000 houses in the South American country, according to a statement on the Venezuelan Foreign Ministry's website. The houses will be constructed over the next 18 months in the Venezuelan states of Yaracuy, Lara and Carabobo and are expected to house 45,000 people. The deal is a part of President Hugo Chávez's Gran Misión Vivienda Venezuela project, the socialist leader's plan to build 2 million housing units for the country's poor over the next seven years. Mr. Chávez has made the project one of his top priorities ahead of next year's presidential election. To meet its housing deficit, Venezuela is working with companies from China, Iran, Turkey and Belarus for construction as well as financing." http://t.uani.com/qKuLBE
Nuclear Program & Sanctions
UPI: "There are at least six international investors ready to back Iran's plans to build a natural gas pipeline through Iraq to Syria, the deputy oil minister said. Iran, Iraq and Syria last month signed off on the proposed 3,480-mile natural gas pipeline from the South Pars gas complex in the Persian Gulf. Iranian Deputy Oil Minister Javad Oji told the official Islamic Republic News Agency that international lenders were lining up to support the multimillion-dollar project. 'Six to seven international investors have announced their readiness to finance, design and construct the pipeline carrying 3.8 billion cubic feet of Iranian natural gas to Iraq, Syria and European countries per day,' he was quoted as saying." http://t.uani.com/nkCCVY
Domestic Politics
AP: "An explosion struck an oil pipeline in Iran's oil-rich southwestern province of Khuzestan early Friday, triggering a blaze that took firefighters hours to put out, news agencies reported. Abdohossein Rezaeizadeh, spokesman for the provinces' branch of the Iranian national oil company, told the official IRNA news agency that the causes of the blast and the subsequent fire were under investigation... Iran's oil and gas sector has been hit by an increasing number of explosions recently but authorities rarely provide any explanation for them." http://t.uani.com/pmEpLP
Opinion & Analysis
Stanley Reed, Pratish Narayanan & Ayesha Daya in Bloomberg News: "It's no secret that Saudi Arabia and Iran are bitter rivals. The Sunni Saudis are deeply suspicious of Iran's influence in Arab countries such as Bahrain and Iraq and want to weaken the Shiite republic, especially when it comes to both nations' most important export: oil. 'Iran is very vulnerable in the oil sector, and it is there that more could be done to squeeze the current government to join the world efforts toward peace,' said Prince Turki Al-Faisal, the ex-Saudi intelligence chief, in a speech at a Royal Air Force base on June 8. Now the Saudis are showing how serious they are about hitting Iran where it hurts. Iran has long supplied four refiners in India, yet thanks to U.S. sanctions, the Indians have encountered ever-tougher obstacles to paying for their Iranian crude. Indian refiners used to settle payments with Iran through a regional organization called the Asian Clearing Union. Late last year the Indian central bank scuttled that arrangement out of fear Indian banks would be barred from doing business in the U.S. By this summer the Indians owed Iran $5 billion and the Iranians said enough was enough, according to three executives at Indian refiners, who asked not to be named because, they say, the Indian government has told the companies not to talk. In mid-July, when the Indians still hadn't received details about the dates or amounts of their August shipments from Iran, they contacted Saudi Aramco, the Kingdom's national oil company, which also supplies India. The Saudis were glad to help. Saudi Aramco is expected to send around 3 million additional barrels to India in August, on top of the usual 12 million. The Saudis are trying for even more Indian business, according to the refinery executives. 'Because of sanctions Iran seems unable to provide the reliability a refiner wants,' says Bhushan Bahree, an analyst at IHS CERA, the energy consultants. 'The Saudis are benefiting from that.' In the past, the Saudis might have been hesitant to take business from Iran, which like Saudi Arabia is a member of the Organization of Petroleum Exporting Countries. Now, as they scramble to contain the fallout from seven months of political turmoil in the Arab world, the Saudis have no such reluctance. The Saudis also have grown weary of OPEC. As the member who has invested the most in increasing production, Saudi oil executives and policymakers view OPEC as overly influenced by misfits such as Iran and Venezuela, which are unable to increase output and almost invariably try to restrain members who do. The failure of the most recent OPEC meeting in May to agree on a production limit has freed the Saudis to produce whatever they want. Since then their output has risen rapidly from 9 million barrels per day to about 10 million." http://t.uani.com/mRSOm3
Martin Fletcher in The Australian: "What most upset the joyless Iranian regime - people having fun, or citizens organising themselves through a potentially subversive social networking site? Late last week, when temperatures in Tehran approached 40C, a notice was posted on Facebook inviting all and sundry to a giant water pistol fight in the Ab V Atash (Fire and Water) park in the north of the capital. Hundreds of men, children and women in black, all-enveloping chadors turned up. They gleefully soaked each other for two or three hours. Pictures showed families enjoying themselves. Finally the park managers turned the taps off and everyone went home. Nobody was hurt. Nobody complained. The event was reported in Tehran newspapers the next day, which is when the trouble began. A local official named Behnam Atabaki condemned the gathering as 'immoral'. Mohamad Taghi Rahbar, an MP from Isfahan who chairs the parliament's legal and judicial committee, took up the cry, insisting that the authorities 'should not show indifference to those who are endeavouring to dilute our Islamic values'. He added: 'We are pursuing more information on those who organised this and will deal with them severely'. A similar event later was swiftly suppressed by the police, and several alleged participants were rounded up and paraded on state television to condemn their own behaviour. 'The girls had mostly ignored the dress code and their headscarves were not properly covering them,' one man said. Another claimed that the organisers were trying to turn the event into something political. 'We have asked the judiciary to deal with these wrongdoers as severely as possible. We cannot tolerate such public events anywhere in the country,' an official from the so-called morality police added. Tehran's fun-starved youth are not impressed. They are now trying to organise water pistol fights in other Iranian cities, and a number of angry and sarcastic messages have been posted on Facebook. One proposes a list of new crimes including the playing of hide-and-seek and paper-rock-scissors, but says that throwing acid into women's faces is acceptable - a reference to the pardoning on Sunday last week of a man who blinded his victim by doing just that. Another displays a picture of an infant girl carrying an outsized water pistol with the caption: 'The main threat to state security has been arrested'. In truth, it is Facebook that the regime regards as the main threat to state security. It was widely used to mobilise the opposition during and after President Ahmadinejad's disputed re-election in 2009. Ostensibly it is now banned, but Iranians find ways to access it. Today's water pistol fights could become tomorrow's uprising, the regime fears." http://t.uani.com/n2WDGA
Dina Esfandiary in The Diplomat: "Mention of the words 'structural reform' these days usually conjures up images of the unrest in Greece. But according to a new report from the International Monetary Fund, Iran has also been restructuring its economy, introducing changes that have resulted in an unexpected growth rate of 3.2 percent in 2010-11. Maybe. Following a two week visit to Iran and discussions with Iranian officials in the spring, the IMF reviewed its initial criticisms, and applauded the regime's removal of its decade-long subsidy programme. But economic mismanagement by Tehran has prompted scepticism of these findings - and is threatening to wipe out the potential for long-term growth. Until December 2010, Iran was spending about a quarter of its GDP on food, fuel and electricity subsidies, and the dismantling of the subsidies system therefore removed a major financial burden for the government. The promise of $40 per month, deposited straight into the accounts of registered lower income families, has supposedly raised disposable income and acted as a stimulus to the Iranian economy. Iran was also able to open up its economy and adjust prices to market level. The rise in global oil prices has, according to the IMF report, improved current account and budget surplus, and helped 'maintain comfortable international reserves.' The jump in energy costs from the removal of the subsidies has reduced wasteful demand and lowered pollution in big cities. And all of this occurred without a peep from the opposition, allowing the government to publicize it as a major success. But the IMF's findings should be taken with a sizeable pinch of salt. Following the removal of the subsidies, the fear that consumers would change their spending habits and switch to buying foreign goods, which were not affected by the rise in prices, is being realised. This means that the publicized rise in disposable income isn't being spent on Iranian goods, and so is not being re-injected into the Iranian economy. The $40 compensation scheme is controlled by the Revolutionary Guards, which means cash transfers can and have been blocked when the receiver is not in their good books. Industrial and agricultural producers, meanwhile, haven't always received the financial aid promised to them, leading many of them to shut down. Some within the regime have also questioned the provenance of the funds needed for the cash transfers, saying that the subsidies haven't led to the anticipated hike in government revenues. In addition, Iran's economy has been performing poorly. Unemployment is high, stagnating just below 15 percent for the past few years, leading to criticism of President Mahmoud Ahmadinejad, who said in March that his government had created 1.7 million jobs in the past year." http://t.uani.com/r22Pjd
Anne Bayefsky in The Weekly Standard: '"While the United Nations is doing its best to legitimize the forthcoming Durban III 'anti-racism' bash, Iranian president Mahmoud Ahmadinejad appears intent on blowing the U.N.'s cover. Each year for the past five years, Ahmadinejad has chosen to speak on the opening day of the General Assembly's so-called general debate, when all the presidents, prime ministers, and foreign ministers annually descend on New York City. According to a U.N. schedule, however, this year the Iranian president will speak on a different day - the same day as Durban III. This one-day conference is the General Assembly's 10th anniversary celebration of the hatefest held back in 2001 in South Africa, scheduled for New York City on September 22, 2011. Americans are used to Ahmadinejad speaking at the U.N. - on their dime, since a quarter of the tab for the global platform is coming out of U.S. taxpayer pockets. They are also familiar with the content of his remarks - having heard his unadulterated hate speech every year since 2005. In 2010, he treated the audience to a speech claiming that 9/11 was an inside job 'to save the Zionist regime.' In 2009, he complained that 'a small minority dominates the politics, economy and culture of major parts of the world by its complicated networks.' But this year he will be able to dress up his brand of anti-Semitism as part and parcel of championing the Durban Declaration, a document which charges Israel - and only Israel, among 192 states - with racism. Ahmadinejad was the sole world leader to show up for Durban II, a 2009 meeting which took place in Geneva. He was not going to let the opportunity provided by Durban III go to waste. His sense of entitlement is hardly surprising, given that the U.N. has elected Iran a vice president of the General Assembly starting in September... Organizers have decided that all participants in the round tables, states and NGOs alike, are 'invited to make brief remarks that do not exceed three minutes.' Most self-respecting heads of state take three minutes to settle in. Ahmadinejad has responded by simply signing up to speak for 30 minutes in the segment directly after the opening session in the General Assembly Hall." http://t.uani.com/prKN9J
ISIS: "Russia's Foreign Minister Sergei Lavrov visited Washington last month and presented a proposal to settle international concerns regarding Iran's nuclear programs. Under the proposal, Iran would answer various International Atomic Energy Agency (IAEA) questions regarding its program, and in return Iran would receive progressive easing of sanctions. ISIS assesses that this proposal has several important characteristics that will need to be incorporated into any action on the Iranian nuclear issue, including addressing IAEA concerns and creating a step-by-step process. It is not clear if the proposal includes a halt to production of 19.75 percent enriched uranium. The proposal, however, does not appear to include any requirement for a halt to Iran's enrichment program in general before these actions are taken. Without such a halt, Iran's enrichment program would continue to grow in capacity and increase Iran's ability to quickly, and perhaps secretly, make highly enriched uranium (HEU) for nuclear weapons in its centrifuge plants. Legitimizing enrichment is unlikely to be worth the benefits offered by the Russian proposal. However, these benefits could be greatly expanded if the proposal were modified. The key is to insist that Iran come clean on its alleged nuclear weaponization activities before any sanctions are reduced. If Iran admitted to having a nuclear weapons effort and allowed the IAEA to verify this effort's halt and dismantlement, international confidence could grow to the extent that a small enrichment program could be tolerated... The Russian proposal risks offering Iran enrichment under greater supervision, a minimal condition that is unlikely to have any significant impact on Iran's move toward a nuclear weapons capability or, ultimately, nuclear weapons. Moreover, this offer ignores that Iran is steadily developing the capability to rapidly make HEU mostly under IAEA supervision. It is difficult to argue anymore that if Iran moves to make HEU for a nuclear weapon, it would do so only with a parallel, covert enrichment program. With the development of the Fordow enrichment plant and advanced centrifuges, Iran may or may not use a small covert plant to further enrich low enriched uranium to weapon-grade. It may do so in the Fordow plant, which is largely impervious to aerial military strikes. There is no longer much of a distance between a military and civilian enrichment program in Iran; perhaps that difference has always been less important than often assumed. So, the benefits of additional supervision would likely be marginal if the goal is to reduce the chance of Iran dashing to produce HEU in the future." http://t.uani.com/pzugdo |
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