Date :Sunday, October 21st, 2018 | Time : 17:18 |ID: 74959 | Print

Iran may reap gains over Khashoggi case as US-Saudi ties are tested

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SHAFAQNASaudi Arabia’s alleged involvement in journalist Jamal Khashoggi‘s murder could sour U.S-Saudi bilateral relations and increase oil prices and that could lead to economic and political gains for Iran.

US President Donald Trump in May withdrew from the 2015 nuclear accord with Iran, reimposing economic sanctions against the Persian Gulf nation.

Some sanctions took effect from August 6, while those affecting the oil and banking sectors will start from November 4. Those sanctions would block banking channels, making payment for oil bought from Iran difficult as well as stop re-insurance cover to refineries processing such oil.

Oil prices hit a four-year high of USD 86.74 a barrel earlier this month as the market grapples with the expected loss of Iranian exports due to the US sanctions.

Rates have cooled to around USD 81 in hope that the US may extend deadline for imposing sanctions on Iran by a couple of months, DNA noticed.

U.S. officials have said they aim to cut Iran’s oil exports to zero to force its leaders to change their behaviour in the region. U.S. sanctions on Iran’s oil exports are scheduled to kick in on Nov. 4.

According to a report published by Tasnim news agency, statements by the United States that it would reduce Iran’s oil exports to zero are a “political bluff”, the head of state-run National Iranian Oil Company (NIOC) said.

NIOC head Ali Kardor said U.S. President Donald Trump had been trying to reduce Iran’s oil exports for months.

“The president of America has done whatever he can and he knows very well that getting Iran’s oil exports to zero was a political bluff,” Kardor said.

Kardor said Iran did not have any difficulties receiving payments for oil exports and said the Islamic Republic could accept payments in euros instead of dollars if necessary.

“There is no problem on this issue,” Kardor said, Iran’s ISNA news agency reported. “With European support there will not be a problem.”

Kardor said Iran was scheduled to sign a new oil contract with a foreign company within two weeks. He did not provide any additional information.

The U.S. administration has been pushing its allies to cut Iranian oil imports and encouraging Saudi Arabia, other OPEC states and Russia to pump more oil to meet any shortfall, Channel news Asia reported.

Saudi Arabia, the world’s largest oil producer, promised Trump that it would hike oil supplies to help offset supply losses from Tehran and ease prices. But if the U.S. punishes Riyadh, that could push the kingdom to withhold oil supplies and allow prices to spike — a move that may boost Iranian coffers.

Iranian crude is already selling at more than $80 per barrel, Iranian Vice President Eshaq Jahagiri told local media this week. “That means even with crude exports halved, the country will still have the same income as before”, he added.

Saudi Arabia’s alleged involvement in the disappearance of U.S.-based journalist Jamal Khashoggi could place Iran at an advantage.

A linchpin of America’s foreign policy in the Middle East, Saudi Arabia is a crucial component of President Donald Trump‘s plan to isolate Iran. The White House needs Riyadh to stabilize the energy market when U.S. sanctions on Iranian oil production take place in November.

But if the U.S.-Saudi relationship turns sour over accusations that Riyadh killed Khashoggi, Trump’s strategy may not go as planned — and that could lead to economic and political gains for Tehran.

The fallout from Jamal Khashoggi’s disappearance is the latest political misstep from Saudi Arabia that will geopolitically benefit Iran,” Sanam Vakil, a senior consulting research fellow at U.K. think tank Chatham House, wrote in a note this week. “Saudi Arabia has already threatened to retaliate against [U.S.] sanctions by using its leverage here, and oil prices have accordingly risen, thereby benefiting Iran in its last few weeks of oil sales before sanctions take effect.”

Growing calls for the U.S. to punish Riyadh

There have been growing calls for the U.S. to punish Riyadh if the allegations were found to be true. “What I would do, I know what I’m going to do, I’m going to sanction the hell out of Saudi Arabia,” Republican Senator Lindsey Graham from South Carolina said on Tuesday. Trump, whose close links to the kingdom has been scrutinized, may now be forced to act amid international and domestic pressure, cnbc reported.

Trump may be going soft because meaningful sanctions could affect Saudi oil exports, which Trump is unusually dependent on at the moment. Saudi Arabia is an important U.S. ally not only because it’s the world’s biggest oil producer, but because it’s a staunch foe of Iran, America’s principal Middle East nemesisyahoo mentioned

As the world learnt about Khashoggi’s disappearance, Secretary of State Mike Pompeo criticized Iran’s “malign behavior” in a Foreign Affairs magazine op-ed, accusing the Islamic Republic of terrorism and identifying it, alongside Pyongyang, as two of Washington’s top threats.

Pompeo’s article “came just at the moment when America’s ally in the region was caught with its pants down regarding Khashoggi,” Robert E. Hunter, a former U.S. ambassador to the North Atlantic Treaty Organization, said in a note published on analysis website Lobe Log, part of the Institute for Policy Studies.

“If that isn’t ‘malign behavior’ and ‘terrorism,’ what is?” Hunter wrote, referring to Riyadh’s alleged involvement in the Khashoggi case.

The EU is in talks with Iran to find the best way to channel oil revenues to Iran

Member of the Iranian Parliament’s National Security and Foreign Policy Commission Morteza Saffari Natanzi said that Iran and the EU are still negotiating the future of the 2015 accord between Iran and the six world powers, Fars News Agency reported.

According to the lawmaker, the reason that the talks have been delayed so far is that the European countries are trying to make the conditions ready for export of Iranian oil to Europe.

He quoted European officials as saying in the meeting with the Iranian side that they are seeking ways to maintain banking transactions between Iran and the EU.

Safari described the trend of talks with the EU as ‘satisfactory’, noting, “We must seek diplomatic ways to isolate the US and put up a serious front against the country’s efforts to sanction Iran.”, Iran daily noticed.

Huge Iranian oil armada heads to China before US sanctions kick in

An unprecedented volume of Iranian crude oil is set to arrive at China’s northeast port of Dalian this month and in early November before US sanctions on Iran take effect.

More than 20 million barrels of oil have been shipped to Dalian by the National Iranian Tanker Company (NITC), Reuters reports, citing an unnamed Iranian shipping source.

“As our leaders have said, it will be impossible to stop Iran from selling its oil,” the source said, adding: “We have various ways of selling our oil and when the tankers reach Dalian, we will decide whether to sell it to other buyers or to China.”

Dalian typically receives between one million and three million barrels of Iranian oil each month, according to statistics. The port has some of the biggest refineries and commercial oil storage facilities in China.

OPEC’s third-largest producer, Iran is finding fewer takers for its crude ahead of the sanctions on its oil exports that will take effect on November 4.

The Islamic Republic has previously stored oil at Dalian during the last round of sanctions in 2014. The oil was later sold to buyers in South Korea and India, RT reported.

The furtive shipments from Iran to India demonstrate the limits of U.S. power. Discounts, off-the-books shipments, bartering and other clandestine maneuvers should keep some Iranian oil flowing even after November 4. For instance, Iran has discounted its oil by the most in 14 years, according to Bloomberg, making it hard to pass up for would-be buyers.

India had contracted to import about 25 MT of crude oil from Iran in 2018-19, up from 22.6 MT imported in 2017-18.

Indian Petroleum and Natural Gas Minister, Dharmendra Pradhan, said on October 1 Indian Oil Corp (IOC) and Mangalore Refinery and Petrochemicals (MRPL) have together placed orders for import of 1.25 MT of crude oil from Iran.

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