The European Union [EU] announced earlier today that it is going ahead with the oil sanctions against Iran w.e.f July 1, as originally planned. That is, all contracts by EU countries for import of Iranian oil will be terminated on Sunday. Greece, which is a major buyer, apparently resisted but was overruled.
Britain was apparently in the driving seat with British Foreign Secretary William Hague virtually announcing the EU decision
and annotating it with regard to its implications for the Iran nuclear issue. Britain could only have been following the US’ agenda. This would mean that the Barack Obama administration is ‘hardening’ its stance apropos the P5+1 talks with Iran. (By the way, P5+1 is also nowadays called ‘Sextet’, which sounds good.) Iran has warned that any further western pressure tactic will be counter-productive. Russia also feels that way. It seems the expert level talks between the Sextet and Iran scheduled for Sunday at istanbul is taking place in cloudy weather, to put it mildly.
India will be affected by the EU decision
insofar as EU countries will not anymore extend insurance cover for transporting Iranian oil. The government has apparently taken a decision to allow Tehran to arrange shipping and insurance w.e.f July 1. India is following China’s lead in this aspect. How it works remains to be seen, though.
The point is, western powers are finding all sorts of means to see that other countries find it extremely difficult to trade with Iran. The message is: ‘So long as we can’t trade, you too shouldn’t.’ One method is to withhold certificates for Iranian ships to enter foreign harbors. Interestingly, what the Iran issue has exposed is also that the West can hold to ransom to a great extent
the international maritime traffic.
All the same, what matters is the broad policy orientation, which seems to favour development of India-Iran economic ties. The latest report of Iran supplying electricity to India is a telling example of how if there is political will, much can be done. The proposal is that Iran can produce electricity out of its gas reserves and export
the same to India via transmission lines across Pakistan.
Clearly, India also stands to benefit from China’s ’strategic defiance’ of the western sanctions against Iran. Not only has China refused to heed the US demarche to reduce oil imports from Iran, the figures for May show a whopping increase
of imports by 35%.
Don’t forget that yet another interesting deadline is coming up on July 1. That is the day Washington is called upon to punish China for flouting the US’ sanctions against Iran. China is the only country that the US has so far withheld from giving a so-called ‘waiver’. Will Washington chicken out and give the waiver? If CNN Money is to be believed, US is in no position to trigger a trade war with China
and will find some alibi to give a ‘waiver’.
At any rate, China is hanging tough. A commentary in the Global Times
said the US demarche to China to reduce oil imports from Iran is an affront to China’s sovereignty and it would “infuriate” the public opinion if China succumbs to the US pressure.