As anticipated, European Union agreed in the Brussels meeting to ratchet up pressure against Islamic Republic of Iran over its so-called suspicious nuclear program. The members approved to intensify sanctions against the country —— the brinkmanship to get Tehran change its current defiant status and suspend the uranium enrichment program till the international community's concerns entirely cleared. It was not the first round of sanctions at all. The United Nations yet approved four rounds of sanctions, labeled by Tehran illegal and part of imperialistic and oppressive policies of West, particularly US.
It should be noticed that the European and US sanctions are different and much harsher than those of the United Nations. In another word, these sanctions are unilateral sanctions and not compulsory for the rest of the United Nations' members to put in practice.
Anyhow, in Brussels meeting, all members agreed to ban new oil contract with Islamic Republic, and end the existing contracts till next coming six months. The time period is considered largely due to countries like Greece and Italy, the two biggest Iran's oil importers in the EU, and nudges them to approve the sanctions. Right after the approval of embargo, the representative of Greece told reporters that Saudi Arabia agreed to fill the gap caused by Iran's pullout from energy market. Currently, Tehran export around 2 million barrels per day and around 18 percent of that is exported to European Union.
Before the meeting, it was largely assumed that EU may not agree with oil sanctions as some members largely depend on it. But the agreement came as a surprise, if not shock, as the time period considered in the resolution satisfied Greece and Italy to join the rest.
One thing needs to be assessed in regard to oil-sanction. Europe is not in a good condition right now. The sovereign debt and budget deficits in Euro-zone is terribly hitting, not only the members, but also the world—as I recently wrote and branded the Euro countries as Lehman Brothers. So, in the current tumultuous situation, what Europe is in need of is cheap energy to fuel the engines of its factories and companies in order to pull the economy back on the track. But they are doing something else. Something quite reveres which may lead to stunning energy price rise and challenge its already inconvenient economic situation. Why?
What can be said is that European Union already scaled down its Tehran's oil-dependence. It has been a long time that Europe lost top-rate market for Islamic Republic's oil. It is the major importer. During years of controversy and quarrel with theological establishment, European countries have shifted towards Arab countries, and, vice versa, Iran has turned towards growing Asian markets. Four Asian giant economies are the main customers—China, India, Japan and South Korea.
But the Union, in general imports, 18 percent of Tehran's total exports, however, they do not consume equally. As I said, Greece, Italy and France are the biggest consumer in the EU and it was largely hoped that they might oppose the sanction. But they did not. The reason expressed is that during six-months for the practicing the embargo motivated them to agree and meet their deficiencies during this period through the rest of oil-exporters.
Perhaps, it was anticipated by EU that Tehran may react to the sanction and ban its exports before giving the members chance to replace it with no anxiety about impacts of their measure. Tehran officials have already talked about banning oil exports and expressed that the sanctions create double problem for EU not for the Tehran, as Asian lines up to replace the EU market.
The question is why they approved the resolution?
I think there are two reasons, one is backstage talks with oil exporting countries and the second, worry about Iran's nuclear Program.
Iran neighbors truly worried about its nuclear program. The Wikileaks release clearly showed how the neighbors are worried as some Arab leaders asked the United States to wage war against Tehran's nuclear Program. In such situation, they are ready to instigate the international community to take tougher stance and they play out their own role.
Because one of the major problems ahead of countries to form a united front against Islamic Republic was its energy which, if cut out of the global market, has the potential to confront many countries with deep economic challenges. Recently, the United States of America has tried to convince Asian customers of Iran to consider aligning with the US and scale down oil imports, the efforts seemingly failed as top Indian officials said that Delhi might increase imports because the EU sanctions force Tehran to sell oil in lower price.
Thus, it would be so hard for the US to convince India and China to join it in intensification of sanctions. But it is not clear yet about South Korea and Japan two close allies of the US what they will do in the long-term, because, as it looks, they might not pay attention to the western countries as they largely lack alternative energy resources.
In this situation, Iran neighbors clearly understand the anxiety of industrial countries. They try to weaken the prospective of oil price inflation through ensuring them of boosting up their oil exports.
So, it seems that Tehran oil partners in the EU have received such insurance and are not worried about the consequence of sanctions.
The second thing refers to European Union's serious concerns about Iran nuclear Program. Some of the EU members expressed inflammatory remarks and warned about its nuclear program. This stance supported largely due to last years' IAEA's report about suspiciousness of the uranium enrichment program. So, it means that European countries worried in extent that they are ready to pay high price to mount pressure on Iran to suspend its nuclear program.