Iran’s sanctions make China, Russia winners
TEHRAN - Bloomberg
Wednesday, August 18, 2010


Sanctions punishing Iran for its nuclear program are deepening the country’s ties with China and handing Russia opportunities to sell more gasoline while hurting suppliers in Europe and India.

Iranian Oil Minister Masoud Mir-Kazemi and Chinese officials pledged for their countries to cooperate more closely in the energy industry during talks in Beijing on Aug. 6, Iran’s government-run Press TV reported. Russia’s state-controlled Rosneft and Gazprom Neft may step up fuel shipments to the Islamic republic this month, the Iran Commission of the Moscow Chamber of Commerce and Industry said in July.

“These countries have long-term interests in the region,” said Gary Sick, a member of the U.S. National Security Council under Presidents Ford, Carter and Reagan and the principal White House aide for Iran during the 1979-81 hostage crisis. China wants “to maintain relations with Iran for the sake of maintaining some access to the oil,” he said.

While sanctions against Iran are denting the country’s fuel imports, squeezing supplies to the country’s 73 million people, they are forcing refiners including India’s Reliance Industries Ltd. to pay higher costs to ship gasoline to more distant markets. Sanctions also translate into lost profit for Paris- based Total SA and other European refiners, which are facing their lowest returns on processing crude since December.

Rations reduction

Iranian President Mahmoud Ahmadinejad’s government cut gasoline rations by one-fourth on June 22 and may reduce fuel subsidies. The country, which has the second-biggest reserves of oil and gas, said in July it may stop exporting naphtha and use the petrochemical as a blending agent to increase gasoline production. National airline Iran Air was forced to redirect jetliners “for a period of time” when BP Plc refused to refuel them last month, Chairman Farhad Parvaresh said on July 28.

That’s giving China and Russia opportunities. Even before Iran’s Mir-Kazemi arrived in Beijing last week, his deputy, Alireza Zeighami, was meeting Chinese officials to press for investment in refineries in the Persian Gulf country, the Oil Ministry’s Shana news agency reported. The two sides committed in the talks to expand their cooperation, and Chinese Vice Premier Li Keqiang said afterward that China is “Iran’s main economic partner,” Press TV reported on Aug. 7, citing official China Central Television.

Russian companies are discussing “serious deliveries” to Iran in late August or September, Rajab Safarov, head of the Iran Commission of the Moscow Chamber of Commerce and Industry, said July 29.

“Looking at the political situation, I’m not sure if Europe and the U.S. were 100 percent sure about the possible responses from places like Russia and China,” said Alexander Poegl, an analyst at JBC Energy in Vienna. “Iran will find partners supplying them gasoline.”

The United Nations Security Council imposed a fourth set of sanctions on Iran June 9, curbing financial transactions and tightening an arms embargo. The U.S. introduced measures on July that target foreign suppliers of gasoline and block access to the American financial system for banks doing business in Iran. The European Union on July 26 banned investment and sales of equipment to the nation’s oil and natural-gas industries. UN spokesman Farhan Haq in New York declined to comment.

http://www.hurriyetdailynews.com/n.php?n=iran8217s-sanctions-make-china-russia-winners-2010-08-18