Free Iran:  Another article that highlights the futility of trying to gain Chinese cooperation against this regime.  America needs a more realistic policy – one which doesn’t depend on Chinese or Russian cooperation for its success.

State-run Chinaoil has sold two gasoline cargoes for April delivery to Iran, industry sources said on Wednesday, stepping into a void left by fuel suppliers halting shipments under threat of U.S. sanctions. Go to Reuters.

As Iranian oil industry needs an upgraded technology and employs a complex method in producing oil from Soroush and Norouz oil fields, it has lost more than US$2 billion in three years.

It is reported that the export of ultra heavy crude oil produced in these fields purchased earlier by Reliance Industries, India’s top private oil company has been halted. About 136,000 barrels of such oil are produced there mostly for export. Go to original article.

Free Iran:  Lots of good stats…

The following are some details about Iran’s principal energy partners and joint projects:

* CHINA – Iran is the third-largest crude oil supplier to China. For the whole of 2009, China imported some 460,000 barrels per day (bpd) of crude from Iran, about 15 percent more than contracted supplies.

- In 2010, Zhuhai Zhenrong Corp, the world’s largest single lifter of Iranian crude, agreed to purchase 240,000 bpd from the OPEC member. The levels were similar to the 2009 supply deal. Go to Reuters.

SAO PAULO (Dow Jones)–Despite a lack of current investments in Iran, Brazilian state-controlled oil giant Petrobras (PBR, PETR4.BR) will keep its office running in that country for the foreseeable future, Petrobras President Jose Sergio Gabrielli said Monday. Go to WSJ.

.

Free Iran:  Based on the quotes below from the Economist, does this mean that the Green movement is now being held back by Mousavi & even Karroubi – people who want to work within the confides of the Islamic’s republic’s repressive, bankrupt and failed constitution – and people who believe that Khomeini was somehow a democrat and a humanitarian?  Up to now, one could have given these gentlemen the benefit of the doubt – despite their history and in the belief that the enemy of my enemy is my friend.  But going forward, such reasoning and deference to these gentlemen becomes increasingly more difficult.

Given these difficulties and as this site has repeatedly argued in the past, for the Iranian people to become free, the US needs to help cut off the regime’s oil income. Without its oil income, the regime will be nothing but a paper tiger. The US needs to start with unilateral sanctions against the insurance and shipping companies that help the regime sell Iran’s oil. It’s the oil income, stupid! (For those that may not be aware, “It’s the oil income, stupid!” is a play on Bill Clinton’s 1992 comment that “It’s the economy, stupid.”  I don’t mean disrespect to anyone.)

From the Economist:

…Mr Bakiyev made two decisive mistakes. First, he had almost all the country’s opposition leaders arrested by the morning of April 7th, which left the protesting crowds without any sense of direction or moderating influence. The leaders were almost all released later in the day but by then it was too late. Second, he miscalculated by using brutal force to hang on to power, which ultimately made it impossible for him to stay. The police were also clearly outnumbered by protesters.  Free Iran:  Not sure about either arguments and especially the second one.  The regime in Tehran is a lot more competent about using force than the government of  Kyrgyzstan.

…But the abrupt change in Kyrgyzstan is also being closely watched in the rest of Central Asia. This was the second time that as few as 5,000 demonstrators succeeded in overthrowing an unwanted government in Kyrgyzstan—an example that the no-less authoritarian neighbours fear could be emulated elsewhere. For the Kyrgyz people, though, it is an opportunity to get things right the second time around.

Russia’s second-largest oil group on Wednesday said that it would consider ceasing the supply of petroleum to Iran, a move that would make it the latest in a line of companies to halt shipments to Tehran.

Lukoil’s move may be a further signal that Russia’s government is beginning to throw its weight behind the drive to increase pressure on Iran over its nuclear programme. Senior officials at the company told the Financial Times they were considering halting the shipments.

Lukoil has been supplying refined petroleum to Tehran intermittently, moving between about 250,000 barrels to 500,000 barrels every other month, according to traders.

“They are not one of the major players in supplying gasoline to Iran, they do it on occasion,” a trader told Reuters on Wednesday. But he added: “Now they will stop because of pressure coming from their head office in Moscow.”

In March, Shell announced that it had stopped petroleum supplies to Iran, joining two of the world’s largest independent trading companies, Glencore and Vitol, which had taken similar decisions.

However, news agencies said Iran has maintained a robust import programme of refined oil products from the international market, buying from Malaysia’s state oil firm Petronas, Kuwait’s Independent Petroleum Group and France’s Total…

Go to Financial Times.

Iran confirmed that its oil exports to India, China and Japan have been sharply reduced.

Hamid Hoseini, head of Petroleum Products Exports Syndicate told ISNA that India and China are not concerned with sanctions but are in fact trying to “take advantage” of the current situation.

While Japan and China have reduced their oil imports from Iran, India’s Reliance Industries has completely ceased purchasing oil from Iran.

Hamid Hoseini announced that China has reduced its oil imports from Iran by half.

He added that sanctions against Iran can be “effective” and Iran can no longer be too choosy in its sale of oil.

He has advised Ministry of Oil officials to allow the private sector to join in oil projects and find smaller markets in order to overcome the effects of sanctions.

China, Japan, India and European countries are the top consumers of Iran’s oil.

Conflicts over Iran’s nuclear program and the possibility of increasing international sanctions against Iran have already caused major reduction in Iran’s sale of crude oil.

In March, Russian oil company Lucoil stopped all its activities in Iran. Earlier Royal Dutch Shell, Vitol, Glencore and Trafigura reported having stopped sale of petroleum products to Iran.

Go to original article.

*2010 imports seen down 11 pct y/y at 374,000 bpd -sources

*Weak oil sales, high prices, political pressure, hit demand

*Iran crude fall outpaced Japan’s overall drop in ‘09 imports

By James Topham

TOKYO, March 30 (Reuters) – Japan’s imports of Iranian
crude oil in 2010 look set to fall to the lowest level in 17
years, industry sources say, as lower consumption, high prices,
and political pressure weaken demand from the OPEC producer.

The Islamic republic is likely to offset the drop in sales
to Japan by increased buying from China, which overtook Japan
as Iran’s top crude buyer in 2009.

But falling sales to Japan piles pressure on Iran, the
world’s fifth-largest oil exporter, which is already seeing
trade opportunities squeezed by sanctions.

Iranian crude imports in 2010 look to fall about 11 percent
to around 374,000 barrels per day (bpd), industry sources say,
adding that overall Japanese crude imports will fall 6.5
percent in the same period.

“Japanese firms are cutting term contracts with Middle East
producers across the board, but Iran will face the brunt of the
cuts,” said one senior oil industry executive.

“First off the metallic properties of their crudes make it
hard for refiners to process, next their crudes have gotten
increasingly expensive compared to similar grades and then
there’s all the political issues involved,” the source added.

Go to Reuters.

As China’s foreign minister Yang Jiechi said recently: “Pressure and sanctions are not the fundamental way forward to resolving the Iran nuclear issue, and cannot fundamentally solve this issue.”

There is good reason for China’s reluctance, or as Clinton might put it, recalcitrance. Iran is now China’s largest trading partner, having displaced the European Union, with an annual trade volume worth over $36 billion, according to the Financial Times.

Top of the list is Iran’s importance as an energy supplier to China. The Islamic Republic – the world’s second biggest oil producer after Saudi Arabia – was up to recently the third largest supplier of crude oil to China. Combined with natural gas exports, Iran accounts for 11 per cent of China’s total energy needs.

Not surprisingly, China is wary of jeopardising a crucial source of fuel. Given the Asian giant’s imperative need to sustain annual economic growth of at least 8 per cent, according to some analysts, or face acute domestic political problems from massive unemployment and rising poverty, China’s priority – first and foremost – is to secure the hydrocarbon fuel to drive its economy.

To this end, a recent Reuters’ report of a dramatic fall in China’s imports of Iranian crude during the first two months of this year could signal Beijing’s preparations for the inevitable: a US-led military attack on Iran – regardless of whether further sanctions are applied or not and regardless of what Tehran does to appease Western powers over its (legitimate) nuclear research.

Citing Chinese customs figures, Reuters reported: “China’s imports of Iranian crude oil shrank by nearly 40 per cent in the first two months of 2010, compared [with] the same time last year, despite the Asian economy’s expanding hunger for foreign oil.”

Tellingly, the drop in orders from Iran was not due to a fall in China’s overall oil demand, which rose strongly by nearly 46 per cent in the first two months, after a lull at the end of last year.

“China’s crude shipments from its number one supplier and the world’s top exporter, Saudi Arabia, rose 5.4 per cent, and those from Angola and Russia rose 71.6 per cent and 50.8 per cent, respectively, to take second and third place. Iran was the only major crude supplier to China to show a fall in deliveries,” said Reuters.

The news wire quoted oil trade analysts who cautioned that two months’ figures do not amount to a firm trend and that it was not clear to them if the fall in Iranian oil export orders was due to Western pressure over looming harsher sanctions.

However, given the critical energy needs of China, the move could also be interpreted as a prudent spreading of oil sources in the event of Iran “being taken out”.

The figure to look out for is refined petroleum exports from China to Iran. The latter lacks refining capacity and relies on China for up to a third of its gasoline imports. If that trade takes a fall, combined with a continuing switch by Beijing to other sources of crude oil, then that might signal China has crumpled under pressure to make way for the US to do its worst.

Go to original article.

Free Iran:  This article makes a mockery of the whole US approach to Iran, especially the significance of sanctions.  Sanctions are nothing but a feel good tactic that could potentially lull us into a false sense of security and prevent us from taking the real steps necessary to take down this regime – like siding with the Iranian people.

Daniel Ammann is the author of “The King of Oil: The Secret Lives of Marc Rich.”

…But anyone who would tout the coercive power of sanctions should remember the story of oil trader and international fugitive Marc Rich, an American who made a fortune off them. Before being pardoned by President Bill Clinton during his last hours in office, Rich earned billions over 16 years selling oil for the Iranian ayatollahs – oil he wasn’t allowed to sell, according to U.S. prosecutors – to countries that weren’t allowed to buy it.

As Rich himself told me during a series of exclusive interviews, even the taking of 53 American hostages, the event that sparked the U.S. oil embargo in the first place, was no impediment to business.

“It was a political development which did not affect the business,” Rich told me. “It was very unpleasant and tragic for the hostages and humiliating for America, but it didn’t affect the business.”

The embargo and the sanctions that followed the Iranian Revolution of 1979 proved a boon to the man considered the most secretive and powerful oil trader in history, as Rich detailed to me in interviews conducted for my book, “The King of Oil.” For the first time ever, Rich publicly acknowledged doing business with the Iranian ayatollahs.

“We performed a service for them,” Rich told me. “We bought the oil, we handled the transport, and we sold it. They couldn’t do it themselves, so we were able to do it.”

American sanctions on Iranian oil began with President Jimmy Carter, who imposed harsh economic punishments on Iran after the November 1979 seizure of the U.S. Embassy in Tehran. Carter froze all Iranian government assets in the U.S. He also banned the import of petroleum products from Iran, and prohibited U.S. citizens from conducting financial transactions with Iran. The Iranians, in turn, canceled all contracts with American oil companies operating in Iran and forbade them from exporting crude oil out of the country.

For Rich, the revolution and the oil embargo were the beginning of a lucrative and unusual business partnership. On the same day that Ayatollah Khomeini returned from his French exile to take power in Iran, one of Rich’s closest business partners landed in Tehran to seek contacts in the new government. Soon the anti-American, anti-Israel and anti-Semitic Khomeini regime was in business with the Jewish-American business mogul.

Rich was indicted in 1983 for trading with the enemy and tax evasion by Rudy Giuliani, then the U.S. Attorney for the Southern District of New York. But Rich’s company, the Swiss-based Marc Rich + Co, purchased approximately 60 to 75 million barrels of Iranian oil every year up to 1994, when Rich finally sold the company to the management.

Rich says his most important clients after the Iranian revolution were two countries that had been almost completely dependent on oil from the Shah’s regime: Israel and apartheid South Africa. The new Islamic regime explicitly prohibited the sale of a single drop of oil to these two countries.

As I show in my book, Rich would serve as the most important single supplier of oil to both Israel and South Africa. Rich told me he remembers selling Israel “between 1 to 2 million metric tons per year,” or 7 million to 15 million barrels). For many years, Rich provided Israel with at least one out of every five barrels that it needed, and the bulk of the oil he provided was Iranian.

The business with South Africa — which itself was under an international embargo — was even bigger. I calculated that Rich’s companies delivered at least 400 million barrels of oil to South Africa, making a profit of $2 billion over the course of 15 years. A former employee told me that in the wake of the Iranian revolution, Marc Rich + Co was at times making a profit of up to $14 per barrel.

Iranian inner circles were well aware of Rich’s dealings with Israel and South Africa, and with American oil companies such as the Atlantic Richfield Company. They knew exactly where their oil was flowing; yet no one at the National Iranian Oil Company seemed to mind.

“They didn’t care,” Rich told me. “The professionals in the oil business in Iran didn’t care. They just wanted to sell oil.”

Go to ABC News.

These are not the best days for Iran’s oil minister Mirkazemi.  While came to the ministry just seven months ago, he has already been plagued with three serious issues: his differences with the Majlis; differences with the cabinet, and differences with the officials inside his own ministry.  Because of these, the rumor mill has it that he will be the first dismissed minister in the tenth administration.  Some experts have even predicted his leave date to be April/May, when energy prices are expected to rise. Go to Rooz Online.

Iraq has ambitious plans for its oil industry. That could have important implications for Iran and the rest of the region.

IN EARLY September 1960 the Iraqi government hosted officials from Venezuela and three Gulf countries for an obscure five-day conference in Baghdad. Wearing suits rather than robes, and sitting at a plain wooden table, they founded the Organisation of Petroleum Exporting Countries (OPEC). For the next three decades Iraq helped to lead the oil cartel as both membership and output grew rapidly. But its influence declined in 1990 when it invaded another founding member, Kuwait, and fell under United Nations sanctions. Despite having the world’s third-largest reserves of oil, Iraq dropped to 13th place in the international production table. Pipelines rusted, wells remained untended and engineers emigrated.

Iraq is now trying to recover its glory, with plans to quadruple production or more. This could transform the global oil industry; it also threatens two other founding members of OPEC. Saudi Arabia might have to share its leadership of the organisation and Iran faces an even greater setback. Close relations with China, based on Beijing’s thirst for oil, have helped Iran to avoid isolation over its nuclear programme. But Chinese oil companies are now turning their attention to Iraq, with American backing.

Yet Iraq will have to pull off an unprecedented feat. In the history of the modern oil industry, no country has increased output with the speed the Iraqis envisage. Over the next seven years Iraq intends to go from producing 2.5m barrels per day to 12m b/d, a target that exceeds Saudi Arabia’s current output by more than 30%. To this end, Iraq has signed ten deals with most of the world’s top oil companies. Some got down to work this month. Go to Economist.

Iran, OPEC’s second-largest crude producer, has at least three supertankers idling in the Persian Gulf, as oil prices decline five weeks before the group’s next meeting, vessel-tracking data show.

The tankers, each bigger than the Chrysler Building, have been almost stationary for at least four weeks, according to data from the ships collected by AIS Live Ltd. The depth of the 2-million-barrel vessels sitting in the water indicates they are loaded. The amount of oil stored may expand because signals from two more idled tankers shows they are partially loaded or empty.

If full, the three tankers’ combined capacity of about 6 million barrels is equal to 19 percent of all the crude the U.S. Energy Department estimates is stored in Cushing, Oklahoma, the pricing point for benchmark West Texas Intermediate oil.

As Iran’s cargoes sit, oil companies and banks are selling crude stored on tankers into the market. The number of ships involved in the “contango” trade, named after the term used to describe a market where future commodity prices are higher than today, declined 16 percent last month, according to data from London-based E.A. Gibson Shipbrokers Ltd. The amount of crude tied up in storage fell 25 percent last week, Morgan Stanley said in a Feb. 7 report. Go to original article.

Thirty-one years ago this week — Jan. 16, 1979 — the shah of Iran flew into exile, opening the way to the birth of an Islamic republic and, over time, a country whose leaders have shaken much of world with their apocalyptic threats and drive for nuclear weapons.

For sure, demonstrations, shootings and massive repression brought a picture of chaos and revolution to Tehran and had left Mohammed Riza Pahlevi’s Peacock Throne tottering. But it was a series of strikes, virtually shutting down Iran’s oil fields, imposing rationing on gas, and raising the prospect of shortages of heating oil, that really signaled the shah’s end.

All these years later, we’re back to oil as one of history’s Big Levers concerning Iran. The circumstances have changed vastly from 1979 and now involve an Islamic fundamentalist regime at the threshold of nuclear arms. Oil looms again, this time looking like the West’s possible — but only partially used — best shot to head off the nukes.

But over the past weeks it has become clear that the sanctions on gasoline aren’t going to happen — either at the United Nations because the Chinese and Russians don’t want them, or in an ad hoc alliance that would include the European Union. One European-based mercantile explanation: third-country suppliers would take advantage of those restrained by a ban. Go to NY Times.

Iran is unlikely to risk blocking or mining the Strait of Hormuz if tension with the West rises, because it stands to lose vital oil revenues from closing the strategic waterway and lacks the military capability.

Many analysts say Tehran cannot afford to risk a prolonged disruption of the narrow waterway, which borders Iran’s coastline at the mouth of the Gulf, and through which 40 percent of all seaborne oil trade, about 17 million barrels, passes daily.

Iran itself exports around 2.4 million barrels daily — most of it via the Strait of Hormuz.

“They would cut their own throats because two-thirds of the Iranian government’s budget comes from exports from the same strait,” said J. Peter Pham, an adviser on strategic matters to U.S. and foreign governments.

“Iran gains more from the threat of closing the strait than actually closing it.” Go to Reuters.