Eye on Iran: Iran's Support for Syria Tested by Oil Price Drop

Join UANI           Top Stories Reuters: "Syrian businessmen and trade officials say they are worried the economic lifeline provided by Iran is under strain from plunging oil prices, despite public messages of support from Syria's strongest regional ally. Syrian President Bashar al-Assad has relied on oil-producing Iran to help him fight insurgents in a nearly four-year-old civil war and also prop up a currency under pressure. 'If it had not been for Iranian support we could not have survived the crisis,' a senior Syrian trade official said from Damascus, requesting anonymity. 'It was Iranian support that has been the most important. In return, we are promising them more and more, and opening more and more doors for them to invest in Syria.' Oil production in Syria, which is under U.S. and European sanctions, has dropped sharply since the start of the conflict and as insurgents have taken over energy installations. In July last year, Iran granted Syria a $3.6 billion credit facility to buy oil products, according to officials and bankers at the time. Another $1 billion went for non-oil products. But with the global oil price down 50 percent since June, Syria - where rebels have seized up to a third of the country - has sought reassurances Tehran will maintain the status quo. The public message has been an overwhelming 'yes'. Syrian Prime Minister Wael al-Halqi visited Tehran this week to boost Iranian support for Syria, in particular ensuring Iranian petroleum products reach the Syrian market, Syrian state news agency SANA reported. 'Iran's economic support for Syria will continue incessantly,' Iranian Vice President Eshagh Jahangiri said on Tuesday after meeting Halqi, according to Iran's state news agency IRNA." http://t.uani.com/13w4TGL Reuters: "A big oil price slide will hurt Iran's attempts to rescue battered living standards, but economic pain is unlikely to soften its stance in nuclear talks or end aid to allies such as Syria, matters seen by its ruling clerics as strategic priorities. Economic misery due to sanctions and mismanagement has been a reality for years, and while social strains in the 76 million population are deep, the clerics will seek to contain them, say experts examining Iran's budget plans for 2015. The largest drop in oil prices since the 2008 financial crisis means more budget pressure for the OPEC member, already bereft of tens of billions of dollars in oil revenue due to Western sanctions and years of economic mismanagement... 'Our support to our brother Assad will never change,' said a senior Iranian official, referring to Syrian President Bashar al-Assad. 'Because of (declining) oil prices we face economic hardship ... but we will mange to continue our support to Syria, militarily and financially.'" http://t.uani.com/1CuLHWe AFP: "Iran has seized on Washington's historic rapprochement with Cuba after five decades of Cold War standoff as proof that big power sanctions do not work. 'The defence by the Cuban government and people of their revolutionary ideals over the past 50 years shows that policies of isolation and sanctions imposed by the major powers against the wishes of independent nations are ineffective,' foreign ministry spokeswoman Marzieh Akfham said. The statement, released late Saturday, was Iran's first official reaction to the rapprochement announced by the two governments on Wednesday." http://t.uani.com/1wBGPy8     Nuclear Program & Negotiations FT: "Tehran will not seek a resumption of diplomatic ties with Washington even if a comprehensive nuclear deal helps to defuse tensions between the two, Iran's top security official has said. In his first interview to the international media, Ali Shamkhani, secretary of the Supreme National Security Council, said Iran's position in the region had been strengthened by its role in facilitating a peaceful change of government in Baghdad last summer, and by the survival of Bashar al-Assad, Syria's president, in Damascus. Iran and the US 'can behave in a way that they do not use their energy against each other [in the region]. A nuclear agreement can be very crucial in this regard,' Mr Shamkhani said in his office in central Tehran. 'Everything will depend on the honesty of the Americans in the nuclear talks.' But when asked whether regular meetings between Iranian and American diplomats during the nuclear talks with six powers - the US, UK, France, Russia, China and Germany - could lead to a rapprochement between the two countries, he replied: 'No. Negotiations are only for the nuclear issue.'" http://t.uani.com/1sQduKU Reuters: "Iran has appointed a backstage strategist in nuclear talks with world powers as chief of foreign petroleum contracts, the oil ministry said, a job that will hinge largely on any settlement of its atomic dispute with the West. Amir-Hossein Zamaninia is a veteran diplomat who was sidelined under hardline former president Mahmoud Ahmadinejad before resurfacing as adviser on the nuclear negotiations revived by moderate President Hassan Rouhani. Zamaninia will replace former Deputy Oil Minister for International Affairs Ali Majedi, who left three months ago to become ambassador to Germany, the ministry said on its website. The U.S.-educated Zamaninia will keep his present portfolio as adviser to the nuclear negotiating team, a post he also held under Ahmadinejad's predecessor, reformist president Mohammad Khatami, when Rouhani himself was the chief negotiator. " http://t.uani.com/1vgCNGW Sanctions Relief Reuters: "China's crude oil imports from Iran fell 2.6 percent in November from a year ago but were up more than half from October, customs data showed on Monday. November imports hit 2.13 million tonnes, or 517,560 barrels per day (bpd), up 53 percent from 338,635 bpd in October. As Iran's largest oil client, China brought in 24.9 million tonnes, or 544,100 bpd, in the first 11 months of the year, up 29 percent over the same period last year, the highest level since 2011. Forecasts by Thomson Reuters Oil Analytics show that imports in December could once again top 2 million tonnes." http://t.uani.com/13UYJB4 Terrorism Haaretz: "Iran is willing to arm Palestinians in the West Bank, in addition to Hamas elements in the Gaza Strip, an official in Tehran told a Hamas news website over the weekend. Nasser Al Sudani, head of the Iranian Parliament's Palestine committee, told alresalah.net - a known Hamas mouthpiece - in an interview published Saturday night. Al Sudana told the website that even during the recent chill in relations between Tehran and Hamas over the latter's support of the Syrian opposition Iran had not ceased its military aid to Gaza. Now, the Islamic Republic intends to bolster those relations with monetary aid as well, says Al Sudani, and a visit by Hamas political chief Khaled Meshal to Tehran in the near future will be aimed at shoring up relations as well... According to the article on Al Resalah, Al Sudani said that Iran considers Hamas to be the 'front line' in the struggle against Israel. 'Destroying Israel will only be possible by arming Palestinians, including in the occupied West Bank,' said Al Sudani, adding that his country will stand beside the 'Palestinian resistance,' despite Israeli threats of attack." http://t.uani.com/1vgF4lv Human Rights NYT: "Amir Hekmati, a former Marine who began a hunger strike and wrote to President Obama this week in despair over his prolonged incarceration in Iran, also has protested to Iranian officials over the apparent paralysis of his case, untreated lung infections, and the prison's cold cells, power blackouts and vermin. In a letter to the ministers of justice and intelligence, Mr. Hekmati also said that he had been warned by the authorities at Evin Prison in Tehran, where he has been held for more than three years, to quit the hunger strike or he would be placed in solitary confinement. The case of Mr. Hekmati, 31, has become a festering irritant in the estranged relations between Iran and the United States. He was arrested while visiting relatives in Iran in August 2011, convicted of espionage and sentenced to death, but the conviction was overturned. He was then convicted of helping a hostile country, a reference to the United States, and sentenced to 10 years." http://t.uani.com/1vgDO1O Opinion & Analysis Nader Habibi in TNI: "On November 24, the five permanent members of the UN Security Council and Germany (the P5+1) and Iran agreed to extend the negotiations regarding the latter's nuclear program for another seven months. If the performances of Iran's stock market and (informal) currency market since November 24 are any indications of public sentiment, they point to a general disappointment with the outcome of the nuclear talks. In the past few weeks Tehran's stock market index (Tipex) has declined by more than 8 percent (and 20 percent in 2014) while the exchange rate of rial against the dollar has suffered a 10 percent decline. Iran's private sector was anticipating a nuclear agreement that would have gradually removed the devastating economic sanctions and put an end to current uncertainties. What they received instead was a continuation of the uncertainty surrounding the negotiations. Over the past two years, this uncertainty has sharply increased the risk of business investments in Iran for both domestic and international investors. After suffering a sharp economic downturns in 2012 and the first half of 2013, the interim accord in November 2013 gave Iran some relief from sanctions in the form of a portion of its blocked oil revenues and allowing it to continue selling one million barrels of oil per day (bpd)- a significantly smaller amount than the average daily level of 2.3 million bpd that it exported before Western sanctions against its oil and financial sectors. This limited relief, in combination with better economic management by the new cabinet of President Hassan Rouhani and growing optimism about the negotiations, had a positive effect on economic conditions. The economic growth rate, which had been negative in 2013, rose to an annualized rate of 4.6 percent in the second quarter of 2014 (first quarter of Persian calendar). The inflation rate also declined significantly, from near 40 percent in 2013 to under 25 percent in 2014. Despite these marginal improvements, however, Iran's economy remains under considerable stress. Industrial activity, in particular, is operating below capacity and unemployment remains high. Under such conditions the extension of the negotiations - instead of the hoped for final agreement - will impact the industrial sector more than other sectors. In anticipation of a nuclear deal, industrialists and investors have spent recent months signing a large number of trade agreements and joint investment contracts with international partners, and must now place these deals on hold for at least another seven months. This interim period will prove extremely difficult for many industrial units, and their representatives have repeatedly warned of the high risk of bankruptcies in the industrial sector. All of this will be exacerbated by the simultaneous decline in oil prices. The price of oil has declined by over 40 percent since June and there are no indications that this drop will end anytime soon. The combination of the oil sanctions against Iran and the steep decline in the price of oil could, within months, lead to fiscal distress and a budget deficit. This will force the Rouhani government to make some difficult choices in next year's fiscal budget. Specifically, in order to keep the budget deficit under control it will have to choose between cutting capital expenditures and expenditures on wages and various types of subsidies." http://t.uani.com/1CuQiaM      Eye on Iran is a periodic news summary from United Against Nuclear Iran (UANI) a program of the American Coalition Against Nuclear Iran, Inc., a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code. Eye on Iran is not intended as a comprehensive media clips summary but rather a selection of media elements with discreet analysis in a PDA friendly format. 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