Europe must impose tough oil sanctions on Iran: US (top US diplomat)

BRUSSELS (AFP) – Europe must follow through on its pledge to impose sanctions on Iran's energy sector in order to coax Tehran back to the negotiating table over its nuclear activities, a top US diplomat said Tuesday.

Robert Einhorn, the US coordinator for Iran sanctions, said he held meetings in Brussels with European Union officials to discuss the measures being drafted after EU leaders agreed this month to impose new sanctions.

"What we hope is that stronger measures on the pressure side, on the sanctions side will give leaders in Iran strong incentives to come to the negotiating table and work with us on a solution to the nuclear issue," he told a press briefing.

"We very much welcome the declaration that was adopted on June 17 by the European Council. This was a strong statement of political intent to put in place effective measures that could raise the stakes for the Iranian regime.

"That was a political statement. Now the political statement needs to be translated into concrete, workable measures," he said at the end of a two-day visit to Brussels.

The EU sanctions approved at the June summit include a ban on new investment, technical assistance and technology transfers to Iran's huge gas and oil industry, particularly for refining and liquefied natural gas.

"I think it's important for Europeans who are prepared to exercise restraint and cut back their own operations in Iran to believe that China is not going to step in and fill the vacuum," Einhorn said.

"It's important that China recognises its responsibilities as a great power for international peace and stability and to recognise that proliferation of nuclear weapons capabilities is not in China's interests," he said.

Thanks NormsRevenge. Yeah, that'll happen. Reprising this (again):

OPEC Has Already Turned to the Euro
GoldMoney Alert
February 18, 2004
...The source for the euro exchange rate is the Federal Reserve, and I have calculated the euro's average exchange rate to the dollar for each year based on daily data.

US Imports of Crude oil
(1)	(2)	(3)	(4)	(5)	(6)
Year	Quantity (thousands of barrels)	Value (thousands of US dollars)	Unit price (US dollars)	Average daily US$ per € exchange rate	Unit price (euros)
2001	3,471,066	74,292,894	21.40	0.8952	23.91
2002	3,418,021	77,283,329	22.61	0.9454	23.92
2003	3,673,596	99,094,675	26.97	1.1321	23.82

We can see from column (4) in the above table that in 2001, each barrel of imported crude oil cost $21.40 on average for that year. But by 2003 the average price of a barrel of crude oil had risen 26.0% to $26.97 per barrel. However, the important point is shown in column (6). Note that the price of crude oil in terms of euros is essentially unchanged throughout this 3-year period.

As the dollar has fallen, the dollar price of crude oil has risen. But the euro price of crude oil remains essentially unchanged throughout this 3-year period. It does not seem logical that this result is pure coincidence. It is more likely the result of purposeful design, namely, that OPEC is mindful of the dollar's decline and increases the dollar price of its crude oil by an amount that offsets the loss in purchasing power OPEC's members would otherwise incur. In short, OPEC is protecting its purchasing power as the dollar declines.

The OPEC nations have a vested interest in the continued health (such as it is) of the Euro; the Chinese want to see it devalued, but have to keep their own currency devalued in order to avoid losing sales in the US; the result is, the Chinese continue to use a chunk of their surplus trade dollars to purchase US gov’t debt, which keeps interest rates low (my ARM rate for the coming year just fell again, BTW; freakin’ property tax eval went down the past twelve months but the overall property taxes paid increased due to stupid local voters), and they do this in part to prop up the USD to avoid increased costs of their fuel imports, which would push up the cost of everything in their society, causing them to lose market share...

China will NEVER go along with sanctions on Iranian petroleum, count on it.

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