EU ministers plan Iran oil embargo, IAEA team to visit

TEHRAN/VIENNA Tue Jan 10, 2012 3:13pm EST

A view of a petrochemical complex in Assaluyeh seaport on Iran's Persian Gulf coast May 28, 2006. Picture taken May 28, 2006. REUTERS/Morteza Nikoubazl

A view of a petrochemical complex in Assaluyeh seaport on Iran's Persian Gulf coast May 28, 2006. Picture taken May 28, 2006.

Credit: Reuters/Morteza Nikoubazl

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TEHRAN/VIENNA (Reuters) - Europe and Japan moved ahead Tuesday in planning for punitive cuts in oil imports from Iran, where a senior official dismissed Western anger at news Tehran is enriching uranium deep underground as cover for ulterior motives.

A day after Iran confirmed the start of enrichment at a mountain bunker near the holy city of Qom - and sentenced an American to death for spying - the European Union brought forward a ministerial meeting that is likely to match new U.S. measures to hamper Iran's oil exports.

Russia expressed "regret and concern" at news that Iran had begun enrichment operations at the Fordow bunker and criticized Tehran for ignoring the international community's demands for a response to its concerns.

An official at the IAEA, the UN nuclear watchdog, said inspectors were expected to visit Iran soon to discuss their worries about possible military aspects to its nuclear program.

Japan took precautions in case it joins an international embargo on buying Iranian crude by asking Saudi Arabia and the United Arab Emirates to help it make up any shortfall.

Anxiety about the Iranian nuclear program helped push up oil prices, and Brent February crude rose 92 cents to $113.37 a barrel by 12:48 p.m. EST (1748 GMT)

Iran's envoy to the International Atomic Energy Agency was scathing about reactions to Monday's news, confirmed by the IAEA, that the Fordow site was enriching uranium - something Western powers say is aimed at developing nuclear arms, rather than the civilian uses that Iran asserts.

Noting that Fordow had been monitored by the IAEA for two years, Ali Asghar Soltanieh told Iran's ISNA news agency that Western reaction had "political purposes." The clerical leadership in Tehran, under pressure from sanctions that are disrupting the economy ahead of a parliamentary election, often accuses Western powers of seeking to overthrow it.

In Brussels, the European Union said it brought forward by a week, to January 23, a meeting at which foreign ministers from the bloc, which rivals China as Iran's biggest customer for crude, are expected to confirm an embargo on oil purchases.

The 27 EU governments are still debating how quickly some of their ailing and oil-dependent economies can afford to drop a key supplier and find alternatives.

The change is officially to avoid a clash with an EU summit on January 30, but bringing the ministers' meeting forward could speed a decision on when to impose the ban, following U.S. President Barack Obama's New Year's Eve move to stop payments to Iran for oil.

The Islamic Republic's decision to carry out enrichment work deep underground at Fordow could make it much harder for U.S. or Israeli forces to carry out veiled threats to use force against Iranian nuclear facilities. That in turn could narrow a time window for diplomacy to avert any attack.

The U.S. State Department Monday called uranium enrichment at Fordow a "further escalation" of Iran's "ongoing violations" of U.N. resolutions.

France called for measures of "unprecedented scale and severity" against Tehran. Germany and Britain also condemned it. Others, including Greece and Italy, which are bigger customers for Iranian oil, are seeking delays before cutting off imports.

DEATH SENTENCE

The death sentence Monday for Amir Mirza Hekmati, 28, an Arizona-born former U.S. military translator with dual Iranian-U.S. nationality, further riled Washington, which denies he is a spy and has demanded his immediate release since his arrest.

The two moves come at a time when new U.S. sanctions imposed over Iran's nuclear program are causing real economic pain.

The rial has lost 20 percent of its value against the dollar in the past week alone, raising the cost of living for Iran's 74 million people [nL6E8CA2MQ]. As they scrambled to buy dollars to protect savings, some said mobile phone text messages were being blocked where they included discussion of "dollars" or "currency." Officials denied any state censorship.

Tehran has responded to the sanctions moves with threats to international shipping that have frightened oil markets. A parliamentary election in two months is widening Iran's internal political divisions, though the widely diverse opposition to the clerical leadership is also divided, both in Iran and in exile.

LEADERS JOKE

Presidents Mahmoud Ahmadinejad of Iran and Hugo Chavez of Venezuela mocked U.S. disapproval and joked about having an atom bomb.

"Despite those arrogant people who do not wish us to be together, we will unite forever," the Iranian leader told Chavez during a visit to Caracas.

On New Year's Eve, U.S. President Barack Obama signed into law by far the toughest financial sanctions yet against Iran, which if fully implemented could make it impossible for most countries to pay for Iranian oil.

Nuclear talks between Iran and the five permanent U.N. Security Council members plus Germany collapsed a year ago. Efforts to restart them have foundered over Iran's refusal to negotiate over its right to enrich uranium.

The United States and Israel say they are leaving the military option on the table in case it becomes the only way to prevent Iran from making a nuclear weapon.

Hekmati's family says he was arrested last August while visiting grandparents in Iran. The United States urged Iran to "release him without delay." His execution could still be blocked by Iran's highest court, which must confirm all death sentences.

Iran disclosed to the IAEA in 2009 that it was building the facility beneath a mountain at Fordow - but only after learning that it had been detected by Western intelligence.

After years in which economic sanctions had little effect, the latest measures against Tehran are causing real pain.

Iran has remained defiant. In a televised speech Monday, Supreme Leader Ayatollah Ali Khamenei said: "Sanctions imposed on Iran by our enemies will not have any impact on our nation. The Iranian nation believes in its rulers."

(Editing by Alastair Macdonald)

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Comments (9)
edgreyshadow wrote:
And yet people continue to dump on Canada and her oil sands… Wouldn’t it be better to rely on a country not run by power-hungry despots for your energy needs?

Jan 10, 2012 10:10am EST  --  Report as abuse
Logical123 wrote:
Even if Iran has to starve, it will never give in to US blackmail. Fortunately, Iran is a large country with vast resources. It could even survive if it traded with no one. It is almost completely self-sufficient. However, there are still many countries around the world that have friendly relations with Iran. So, the US is just whistling Dixie as the saying goes.

Jan 10, 2012 10:29am EST  --  Report as abuse
China can buy the Iranian oil that others don’t and gain a discount. The West can continue the false charges, keep oil prices artificially high, and go bankrupt. The US and EU are already heading toward a ten year depression. This will let China dominate the planet because China can afford the prices that the West cannot. Most of the world has been bullied by the West and will support China, so the West may stay in depression for longer than a decade.

Jan 10, 2012 2:32pm EST  --  Report as abuse
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