China’s crude oil imports from Iran up: Report

Source: Islamic Republic News Agency

 China's crude oil imports from Iran have amounted to 28 million tons in 2011, which marks a 30-percent growth compared to the same period last year.

The figure shows China traded in nearly 557,000 barrels of oil from Iran on a daily basis last year, The Wall Street Journal reported.

Customs data showed that China's full-year crude imports totaled 253.78 million tons, up by 6.1 percent in 2011.

China's overall crude imports for December 2011 stood at 21.92 million tons, up 5.1 percent in comparison with the same period in the previous year.

Chinese Prime Minister Wen Jiabao said on January 19 that his country would continue oil trade with Iran in defiance of proposed US and European sanctions which aim to stop Iran's oil exports.

'China's oil trade with Iran is a normal commercial activity,' he added.

China's prime minister said, 'I believe that China is not the only country to buy oil from Iran... Legitimate trade has to be protected if global economic chaos is to be avoided.'

China's rapid growth in recent years has seen a surge in demand for oil in the country.

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With EU On Board With Iran Oil Sanctions, Western Eyes Turn To Asia

AppId is over the quota

By Charles Recknagel, RFE/RL

The decision by European Union foreign ministers to stop taking deliveries of crude oil from Iran might well represent a momentous change and a blow to Tehran.

But by most accounts such a move -- even in conjunction with a host of other punitive steps -- is insufficient to force Tehran to stop what the West says are efforts to develop nuclear weapons.

The 510,000 barrels per day (bpd) of oil that the EU imports from Iran represent less than one-fifth of the more than 2.6 million bpd Iran ships out daily.

Still, what the West hopes is that the EU's example will create pressure for Asia's energy-hungry economic giants to follow suit.

China, Japan, India, and South Korea account for a combined 53 percent of Iran's total exports. If they join the sanctions, there is little chance Iran's regime -- which depends on energy exports for nearly half its budget revenues -- could survive.

That makes the EU's latest action a milestone on a still-long journey to muster economic pressure against Tehran, with no end in sight because nobody knows whether the Asian giants will join the campaign or not.

Customer Loyalty

"Both China and Russia, China in particular, have very strong and strengthening commercial ties [with Iran]," David Knott of the Middle East Economic Survey (MEES) says, noting that China is Iran's biggest oil customer at 543,000 bpd. "And while the Western...world has been withdrawing from Iran because of the tightening U.S. and international sanctions, China has not been so much bound by those."

China gets 10 percent of its imported oil from Tehran. It also has important business interests in Iran, including projects to develop oil and gas fields and drilling work.

Beijing has repeatedly said sanctions will not resolve the nuclear issue and signaled that finding a substitute supplier is not on its agenda.

The other three biggest Asian importers of Iranian oil -- India, Japan, and South Korea -- are also reluctant but may be easier for the West to woo. Unlike China, which is America's biggest creditor, they are all to varying degrees U.S. allies.

India shows no signs of cutting back on Iranian oil. The country gets 11 percent of its crude oil from Iran, or 341,000 bpd, making Tehran its second-largest supplier.

Japan, a close U.S. ally gets 6 percent of its oil from Iran, or 251,000 bpd. It has signaled reluctance to halt those imports, though it might cut them back. When Japan's finance minister earlier this month said Japan would join sanctions, other officials raced to backtrack, indicating nothing is decided.

South Korea, which gets 7.5 percent of its crude from Iran, or 239,000 bpd, says it would be difficult for it to find alternative supplies quickly. Seoul is in bilateral discussions with Washington to find a compromise as it tries to maintain its energy security without alienating the U.S., its key trade partner.

Cat And Mouse

All this suggests Western powers have much work ahead to re-route Iran's customers to other suppliers. The most obvious alternative is Saudi Arabia, which this week affirmed it has the capacity to fill any drop in the world's oil supply that may result from sanctions on Iran.

But Iran can equally be expected to do everything it can to hold onto its customers, including making it easier for them to stay ahead of the sanctions effort.

Knott says that while the most effective sanction on Tehran is Washington's ban on countries doing business with the Central Bank of Iran, even that is not foolproof.

"One of the things that might happen is that the American targeting of the Central Bank of Iran," Knott says. "The rules are going to get tighter around June when the next swath of sanctions come in, what might happen then, people are thinking, is that the Iranians might be more open to barter deals for oil."

Could some Asian countries play a cat-and-mouse game with Washington, observing U.S. bans to the letter but going around them in practice?

Tehran clearly hopes so. And that means Western capitals will continue to seek real commitments from their Asian partners to reduce Iranian oil imports.

Copyright (c) 2012 RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036. www.rferl.org

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EU Ministers Adopt Iran Oil Embargo

AppId is over the quota

Source: RFE/RL

European Union foreign ministers have agreed to ban the import of Iranian oil as part of sanctions designed to pressure Iran to end its alleged pursuit of nuclear weapons.

The measures approved in Brussels include an immediate ban on the signing of new supply contracts for Iranian crude oil and petroleum products, while existing contracts would be phased out by July 1.

British Foreign Secretary William Hague called the measures part of "an unprecedented set of sanctions."

The EU currently buys around one-fifth of Iran's oil exports -- Iran's most valuable asset.

EU foreign policy chief Catherine Ashton has said sanctions were designed to persuade Iran to return to talks on its nuclear program that Western powers fear is aimed at producing atomic weapons.

"We will be discussing and finalizing additional sanctions [on Iran], particularly focused on the central bank and on oil exports," Ashton said. "But I do want to, again, reiterate that this is part of trying to get a twin-track approach. The pressure of sanctions in designed to try and make sure that Iran takes seriously our request to come to the table and meet."

Ashton said world powers had yet to receive a reply from Tehran to an offer in October to hold new talks.

German Foreign Minister Guido Westerwelle said it was critical that action again Iran be taken, saying it was not a question of security in the region alone, but "a question of security in the world."

Iran says its nuclear program is exclusively for peaceful purposes, but Western powers and many international officials fear it is aimed at producing atomic weapons.

Four rounds of UN sanctions have targeted Iran's nuclear activities, and the UN's International Atomic Energy Agency (IAEA) recently accused Tehran of work "specific to nuclear weapons."

The EU and the United States are working to persuade countries in Asia to reduce their oil purchases from Iran as well.

Iran has threatened to retaliate over new sanctions by blocking the Strait of Hormuz in the Persian Gulf, through which some 20 percent of the world's oil exports pass. The United States has vowed to keep the trade route open.

Photos: Iranian Navy's parade in the Strait of Hormuz

The United States says one of its aircraft carriers as well as a British and a French warship have recently sailed through the Strait of Hormuz and into the Gulf without incident.

A spokeswoman for the U.S. Fifth Fleet said the "USS Abraham Lincoln" had completed what she called a "regular and routine" passage through the strait.

EU foreign ministers also planned at the January 23 meeting to widen sanctions against Alyaksandr Lukashenka's regime in Belarus. The bloc has so far frozen personal assets and imposed visa bans on more than 200 individuals linked to the regime after the violent crackdown on demonstrators that ensued after the flawed presidential election in 2010.

compiled from agency reports

Copyright (c) 2012 RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036. www.rferl.org

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E.U. Formally Adopts Iran Oil Embargo

 Iran's President Mahmoud Ahmadinejad speaks during the 1st International Islamic Awakening Conference in Tehran September 18, 2011.

(BRUSSELS) —The European Union formally adopted an oil embargo Monday against Iran and a freeze of the assets of the country's central bank, part of sanctions meant to pressure the country to resume talks on its nuclear program.

Diplomats said the measures, which were adopted in Brussels by the EU's 27 foreign ministers, include an immediate embargo on new contracts for crude oil and petroleum products, while existing contracts will be allowed to run until July.

EU diplomats are calling the measure part of a twin track approach toward Iran: increase sanctions to discourage what they suspect is Iran's pursuit of nuclear weapons but emphasize at the same time the international community's willingness to talk. Iran says its nuclear program is exclusively for peaceful purposes.

British Foreign Secretary William Hague called the embargo part of "an unprecedented set of sanctions." (See the top 10 players in Iran's power struggle.)

"I think this shows the resolve of the European Union on this issue," Hague said.

The EU also agreed to freeze the assets of the Iranian central bank. Together, the two measures are intended not only to pressure Iran to agree to talks but also to choke of funding for its nuclear activities.

In October, EU foreign policy chief Catherine Ashton sent a letter to Saeed Jalili, Iran's top nuclear negotiator, saying her goal was a negotiated solution that "restores international confidence in the exclusively peaceful nature of Iran's nuclear program."

She says she has not yet received a reply.

In advance of Monday's decision, negotiators worked hard to try to ensure that the embargo would punish only Iran — and not EU member Greece, which is in dire financial trouble and relies heavily on low-priced Iranian oil.

The foreign ministers agreed to a review of the effects of the sanctions, to be completed by May 1, a diplomat said. He spoke on condition of anonymity to discuss the subject before the official announcement. They agreed in principle to make up the costs Greece incurs as a result of the embargo.

"It is important to know what will happen to individual countries as a consequence of the sanctions," Ashton said before the meeting.

The National Council of Resistance of Iran, an exile group opposed to the country's clerical regime, welcomed the new sanctions and called for their implementation without delay.

"For over two decades, the Iranian Resistance has called for comprehensive oil and financial sanctions against the religious and terrorist dictatorship ruling Iran," Maryam Rajavi, the organization's president-elect, said in a statement.

The council, founded in 1981, is considered a terrorist organization by the United States, but not by the European Union.

"While the clerical regime is all out to obtain nuclear weapons, a five-month delay in putting these sanctions in full force provides a significant amount of time for this regime to implement its ominous plots," Rajavi said.

German Foreign Minister Guido Westerwelle said it was critical that action be taken.

"This is not a question of security in the region," he said. "It is a question of security in the world."

Raf Casert contributed to this report.

See pictures of people around the world protesting Iran's election.

See pictures of terror in Tehran.

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Oil Tumbles as Iran Premium Fades

Oil has fallen below $99 a barrel on reports that "major powers" are expected to issue a statement Friday on the possibility of resuming nuclear talks with Iran.

View of Iran's oil industry installations in Mahshahr, Khuzestan province, southern Iran.

As of mid-morning trading, prices on the February WTI contract—which expires Friday at the end of the floor session—and nearby March contract had reached session lows of $98.05 and $98.18 a barrel, respectively.

Since November of last year, U.S. oil prices have hovered around $100 a barrel on heightened geopolitical risks in Iran. Controversy over Iran’s nuclear program, followed by Iranian military drills in the Strait of Hormuz—a key waterway that carries 30 percent of the world’s seaborne oil—helped send prices above $100 a barrel. That's until now.

"We are ready to take off some of our Iranian premium," Petromatrix energy analyst Olivier Jakob wrote in a note to clients on Thursday and he reiterated that call Friday, saying Iran has "started to have a softer voice about potential action in the Strait of Hormuz, a voice that was later welcomed by the United Arab Emirates. Iran also claims that it is ready to take part again in nuclear negotiations."

Also European Union officials are expected to announce an agreement on the embargo of Iran oil on Monday, analysts and traders say these may prove to be toothless sanctions.

"The EU embargo on Iran to be decided on Monday is basically useless until the first review in three months from now. If new negotiations are to take place between Iran and the West then the EU will want to officially announce an embargo, then claim that the negotiations are a result of the announced embargo and in three months the EU will have the option to cancel or not the embargo directive," Jakob wrote.

India and Iran have also reportedly agreed to settle some oil sales in rupees, so that would be another way to circumvent EU and U.S. sanctions. "This is one of the first times oil has been settled in a currency other than dollars. It's a major coup for the Iranians," says Again Capital founder John Kilduff, adding its also another reason for an unwinding of the Iranian risk premium in oil prices.

Also pressuring prices, the U.S. Energy Department on Thursday announced that U.S. oil demand is at a 15-year low and gasoline demand is at an 11-year low, highlighting the fragility of an economic recovery in the world’s largest oil consumer.

March WTI futures are the most active contract (Feb expires today), and is now trading below 50-day moving average ($99.10).

Analysts say the next key technical level is in the $97.80-$97.90 a barrel range.

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Police: Assailants kidnap US citizen leaving bank in Nigeria oil delta, ask for $333k ransom

LAGOS, Nigeria - Assailants kidnapped a U.S. citizen leaving a bank in Nigeria's oil-rich southern delta Friday, the first such attack targeting foreigners in the restive region for several months.

The attack happened in Warri, the capital of Delta state, local police spokesman Charles Muka said. Investigators believe the assailants trailed the man to the bank and waited outside before kidnapping him, Muka said.

Kidnappers later made contact with authorities and demanded a $333,000 ransom, he said.

The attack occurred in Nigeria's oil-rich Niger Delta, where foreign firms have pumped oil out of the country for more than 50 years. Despite the billions flowing into Nigeria's government, many in the delta remain desperately poor, living in polluted waters without access to proper medical care, education or work.

In 2006, militants started a wave of attacks targeting foreign oil companies, including bombing their pipelines, kidnapping their workers and fighting with security forces. That violence waned in 2009 with a government-sponsored amnesty program promising ex-fighters monthly payments and job training. However, few in the delta have seen the promised benefits.

While foreign workers have become harder to target, local kidnapping gangs have begun seizing middle-class Nigerians as well.

Deb MacLean, a spokeswoman for the U.S. Embassy in Nigeria's capital Abuja, said diplomats there were aware of the kidnapping.

"We continue to monitor the situation closely and assist," MacLean said Friday night.

In 2011, there were five reported kidnappings of U.S. citizens in Nigeria, according to a recent U.S. State Department travel warning about the country. The most recent occurred in November when two U.S. citizens and a Mexican were kidnapped from a Chevron Corp. offshore oil field and held for about two weeks, the State Department said.

___

Associated Press writer Jon Gambrell contributed to this report.

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European Bank Debt Grows Even Less Appealing to Investors

European Pressphoto Agency

Troubling signs for the euro zone: Investors are getting more?averse to the region’s bank debt, except that of German lenders.

Following?France’s recent loss of its AAA credit rating by Standard & Poor’s, 80% of investors polled by TD?Securities indicated they were still not buying French bank paper, and those?that did were only involved in overnight paper.

That was a spike from 47% in a?previous survey in December. Investors continue not to purchase bank paper in Spain, Portugal, Ireland and Greece.

Instead, 74% said they?were willing to buy German bank paper, up from 57% last time; 46% were willing to?invest for terms of 1 to 3 months, compared with 42% last time.

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