Tehran Flexes Muscle, Shrugs off Sanctions

The Iranian nuclear issue was swept up by a rush of events Wednesday and Thursday, Feb. 15 and 16, toward its next station, resumed negotiations. A letter expressing Tehran’s readiness to discuss a return to the negotiating table was received by the European Union foreign policy executive Catherine Ashton in belated response to her offer of October 2011. It was delivered the day after the Islamic Republic paraded what it called “major nuclear successes.”
It was only on Tuesday, Feb. 14, that Dennis Ross, special adviser to President Barack Obama on the Middle East, Afghanistan and South Asia from 2009 to 2011, wrote an article in the New York Times entitled: “Iran Is Ready to Talk.”
This seasoned diplomat would not have gone out on a limb without being sure of this fact. And indeed he was proven correct a day later.
While on the face of it, the news is sensational, it is hardly a breakthrough: Iran never objected to sitting down and talking – so long as its representatives had the stage for sounding off on Tehran’s side of the controversy. Iranians tend to be unresponsive when it comes to answering questions troubling world powers about their nuclear activities and dodge around compromise proposals.
Only last month, Tehran, while nodding to diplomacy in principle, typically never answered Russian Foreign Minister Sergey Lavrov’s proposal for a new “step by step” model for nuclear talks, or Turkish Foreign Minister Ahmet Davutoglu’s feeler on behalf of the Obama administration to find out whether Ankara or Tehran would be an acceptable venue.

Is Iran really isolated? And is Assad failing?

The most intriguing aspect of the Ross article is the glimpse it provides into the inner workings of the US president’s policy-making machinery and its reasons for believing that diplomacy with Iran would pay off.
Some of the elements in Ross’s article are debatable – for instance, the assertion that “Today, Iran is more isolated than ever. The regional balance of power is shifting against Tehran, in no small part because of its ongoing support for the beleaguered government of Bashar al-Assad in Syria,” he writes.
“The Assad regime is failing, and in time, Iran will lose its only state ally in the Arab world and its conduit for arming the militant group Hizballah in Lebanon.”
DEBKA-Net-Weekly’s analysts question the proposition that Iran is isolated when it has the support of China, Russia and India, as well as a measure of sympathy from Turkey.
As for Assad, there were indications this week that he has managed to stabilize his grip on government. Barring, unexpected changes, he looks like holding out until the end of the year or beyond.
Ross goes on to say: “Gone is the fear of Iranian intimidation, as the Saudis demonstrated by immediately promising to fill the gap and meet Europe’s needs when the European Union announced its decision to boycott the purchase of Iran’s oil. Even after Iran denounced the Saudi move as a hostile act, the Saudis did not back off.”
Ross – and apparently Obama too – appear to have missed the figures released this week showing that Iran’s crude oil exports to India rose to 550,000 barrels a day in January, up 37.5 percent from December 2011.

Tehran has customers for 80 percent of its oil despite sanctions

But it is not just India; China and North Korea are also continuing to buy huge quantities of oil from Iran, while, like India they are placing their private banking systems at the disposal of the Iranian Central Bank, to bypass US and European sanctions.
In total, these three countries purchase more than 65 percent of Iran’s total oil output.
Even America’s close friend, Turkey, (see separate article in this issue) is not playing along with the embargo on Iranian oil. Responding to strong US insistence, a Turkish delegation travelled to Saudi Arabia last Friday and Saturday, Feb. 10-11, to look into the possibility of replacing Iranian oil. Washington assured them they would get a cheaper price and better terms from the Saudis.
Four days later, after politely going through the motions to please Washington, Ankara announced officially that its regular purchases from Iran would continue as before and Turkey would not buy Saudi oil.
Tehran therefore has no difficulty in finding buyers for 80 percent of its exported oil. It is therefore hard to credit Ross’s assertion that “Iranian oil is being stored in tankers as Iran’s buyers demand discounts to purchase it.”
Certainly many purchasers and speculators are trying to capitalize on Western sanctions to get better deals in their business with Iran. But with the cooperation of Russian, Chinese, Indian and Turkish financial systems, Tehran will soon improve its bargaining position.

Iran flexes muscle as its introduction to diplomacy

That most of the countries continuing to do business with Iran are not paying in dollars, is presented by Ross as a major American accomplishment which is emptying Iran’s US currency stocks.
This is not the case for two reasons:
1. The dollar is hurt as much as Iran;
2. Over the past four years, Iran has reduced its dollar purchases by 80 percent and switched to gold or Russian and Asian currencies as well as expanding its barter trade.
He ends the article with the conclusion: “The Obama administration has now created a situation in which diplomacy has a chance to succeed. It remains an open question whether it will. The next few months will determine whether it succeeds…”
But Dennis Ross and the White House need not wait months to see how diplomacy fares; they received Iran’s answer this week.
Tuesday, Feb. 14, the USS Abraham Lincoln aircraft carrier was dispatched through the Straits of Hormuz to the Gulf of Oman, its second crossing through the vital waterway since its first on Jan. 23
But this time, it was trailed by a menacing flotilla of an explosives-laden speedboat, warships with missiles poised openly on launch pads, a surveillance aircraft, a home-made drone and assault helicopters.
Iran’s crude show of muscle in the face of American military might told Washington that Tehran was not afraid of a military showdown.
The next day, President Mahmoud Ahmadinejad made a theatrical show of inserting 20-percent enriched uranium fuel rods into the Tehran Research Reactor, shortly after Iran State TV announced the cutoff of oil exports to six European Union countries.
Tehran’s version of successful diplomacy clearly has little in common with the way it is perceived in Washington.

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