[News] The Iranian oil embargo blowback

[Anti-Imperialist News]

The Iranian oil embargo blowback
By Pepe Escobar

http://www.atimes.com/atimes/Middle_East/NA28Ak05.html

If the sorry parade of European poodles - or what analyst Chris Floyd 
delightfully dubbed Europuppies - had any understanding of Persian 
culture, they would have known that blowback for their declaration of 
economic war in the form of an Iranian oil embargo would be nothing 
short of heavy metal.

Better yet; death metal. The Majlis (Iranian parliament) will discuss 
this Sunday, in an open section, whether to cancel right away all oil 
exports to any European country that approved the embargo - according 
to Emad Hosseini, the rapporteur of the Majlis Energy Committee. And 
that comes with the requisite apocalyptic warning, relayed via the 
Fars news agency, courtesy of member of Parliament Nasser Soudani: 
"Europe will burn in the fire of Iran's oil wells."

Soudani expresses the views of the whole Tehran establishment when he 
says that "the structure of their [Europe's] refineries is compatible 
with Iran's oil", and so Europeans have no alternative as 
replacement; the embargo "will cause an increase in oil prices, and 
the Europeans will be compelled to buy oil at higher prices"; that 
is, Europe "will be compelled to buy Iran's oil indirectly and 
through intermediaries".

According to the EU sanctions package, all existing contracts will be 
respected only until July 1 - and no new contracts are allowed. Now 
imagine if this pre-emptive Iranian legislation is voted within the 
next few days. Crisis-hit Club Med countries such as Spain and 
especially Italy and Greece will be dealt a deathblow, having no time 
to find a possible alternative to Iran's light, high-quality crude.

Saudi Arabia - whatever the oily spin in Western corporate media - 
does not have the spare capacity; and on top of it, the absolute 
priority for the House of Saud is high oil prices, so it can bribe - 
apart from repressing - its own population into forgetting about 
noxious Arab Spring ideas.

So yes, already broken European economies would be forced to keep 
buying Iranian oil, but now from the winners of choice - middlemen vultures.

Not surprisingly, the losers lost in these Cold War tactics 
anachronistically applied to a global open market are the Europeans 
themselves. Greece - already facing the abyss - has been buying 
heavily discounted oil from Iran. The strong possibility remains of 
the oil embargo precipitating a Greek government bond default - and 
even a catastrophic cascade effect in the eurozone (Ireland, 
Portugal, Italy, Spain - and beyond).

The world needs a digital Herodotus to decode how these European 
poodles who claim to represent "civilization" were able, in a single 
stroke, to inflict simultaneous pain on Greece - the cradle of 
Western civilization itself - and Persia - one of the most 
sophisticated civilizations in history. In an astonishing historical 
replay of tragedy as farce, it's as if Greeks and Persians were 
bonded together at the Thermopylae facing the onslaught of North 
Atlantic Treaty Organization armies.

Hit the Eurasian groove
Now compare it with the action all across Eurasia. Russian Foreign 
Minister Sergey Lavrov said, "Unilateral sanctions don't help 
matters". The Ministry of Foreign Affairs in Beijing, exercising 
immense tact, nevertheless was unmistakable; "To blindly pressure and 
impose sanctions on Iran are not constructive approaches."

Turkey's Foreign Minister Ahmet Davutoglu said, "We have very good 
relations with Iran, and we are putting much effort into renewing 
Iran's talks with the 5+1 [Iran Six - the United Nations Security 
Council permanent members plus Germany] mediators' group. Turkey will 
continue looking for a peaceful solution to the issue."

BRICS member India - alongside Russia and China - also dismissed 
sanctions. India will keep buying Iranian oil and paying in rupees or 
gold. South Korea and Japan will inevitably extract exemptions from 
the Barack Obama administration.

All across Eurasia trade is fast moving away from the US dollar. The 
Asian Dollar Exclusion Zone, crucially, also means that Asia is 
slowly disengaging itself from Western banks.

The movement may be led by China - but it's irreversibly 
transnational. Once again, follow the money. BRICS members China and 
Brazil started bypassing the US dollar on trade in 2007. BRICS 
members Russia and China did the same in 2010. Japan and China - the 
top two Asian giants - did the same only last month.

Only last week, Saudi Arabia and China rolled out a project for a 
giant oil refinery in the Red Sea. And India more or less secretly is 
deciding to pay for Iranian oil in gold - even bypassing the current 
middleman, a Turkish bank.

Asia wants a new international system - and it's working for it. 
Inevitable long-term consequences; the US dollar - and, crucially, 
the petrodollar - slowly drifting into irrelevance. "Too Big to Fail" 
may turn out to be not a categorical imperative, but an epitaph.

Pepe Escobar is the author of 
<http://www.amazon.com/exec/obidos/ASIN/0978813820/simpleproduction/ref=nosim>Globalistan: 
How the Globalized World is Dissolving into Liquid War (Nimble Books, 
2007) and 
<http://www.amazon.com/Red-Zone-Blues-snapshot-Baghdad/dp/0978813898>Red 
Zone Blues: a snapshot of Baghdad during the surge. His new book, 
just out, is 
<http://www.amazon.com/Obama-Does-Globalistan-Pepe-Escobar/dp/1934840831/ref=sr_1_1?ie=UTF8&s=books&qid=1233698286&sr=8-1>Obama 
does Globalistan (Nimble Books, 2009).

He may be reached at pepeasia at yahoo.com.



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