Saturday, March 31, 2012 7:41:27 PM
Obama Finds Oil in Markets Is Sufficient to Sideline Iran
President Mahmoud Ahmadinejad of Iran, center, visiting the Abadan oil refinery in the southwestern city of Abadan last May.
Amir Pourmand/Agence France-Presse — Getty Images
President Obama has determined there is enough oil in world markets to allow countries to rely less on Iran's oil imports.
Doug Mills/The New York Times
By ANNIE LOWREY
Published: March 30, 2012
WASHINGTON — After careful analysis of oil prices and months of negotiations, President Obama on Friday determined that there was sufficient oil in world markets to allow countries to significantly reduce their Iranian imports, clearing the way for Washington to impose severe new sanctions intended to slash Iran’s oil revenue and press Tehran to abandon its nuclear ambitions.
The White House announcement comes after months of back-channel talks to prepare the global energy market to cut Iran out — but without raising the price of oil, which would benefit Iran and harm the economies of the United States and Europe.
Since the sanctions became law in December, administration officials have encouraged oil exporters with spare capacity, particularly Saudi Arabia, to increase their production. They have discussed with Britain and France releasing their oil reserves in the event of a supply disruption.
And they have conducted a high-level campaign of shuttle diplomacy to try to persuade other countries, like China, Japan and South Korea, to buy less oil and demand discounts from Iran, in compliance with the sanctions.
The goal is to sap the Iranian government of oil revenue that might go to finance the country’s nuclear program. Already, the pending sanctions have led to a decrease in oil exports and a sharp decline in the value of the country’s currency, the rial, against the dollar and euro.
Administration officials described the Saudis as willing and eager, at least since talks started last fall, to undercut the Iranians.
One senior official who had met with the Saudi leadership, said: “There was no resistance. They are more worried about a nuclear Iran than the Israelis are.”
Still officials said, the administration wanted to be sure that the Saudis were not talking a bigger game than they could deliver. The Saudis received a parade of visitors, including some from the Energy Department, to make the case that they had the technical capacity to pump out significantly more oil.
But some American officials remain skeptical. That is one reason Mr. Obama left open the option of reviewing this decision every few months. “We won’t know what the Saudis can do until we test it, and we’re about to,” the official said.
Worldwide demand for oil was another critical element of the equation that led to the White House decision on sanctions. Now, projections for demand are lower than expected because of the combination of rising oil prices, the European financial crisis and a modest slowdown in growth in China.
As one official said, “No one wants to wish for slowdown, but demand may be the most important factor.”
Nonetheless, the sanctions pose a serious challenge for the United States. Already, concerns over a confrontation with Iran and the loss of its oil — Iran was the third-biggest exporter of crude in 2010 — have driven oil prices up about 20 percent this year.
A gallon of gas currently costs $3.92, on average, up from about $3.20 a gallon in December. The rising prices have weighed on economic confidence and cut into household budgets, a concern for an Obama administration seeking re-election.
On Friday afternoon, oil prices on commodity markets closed at $103.02 a barrel, up 24 cents for the day.
Moreover, the new sanctions — which effectively force countries to choose between doing business with the United States and buying oil from Iran — threaten to fray diplomatic relationships with close allies that buy some of their crude from Tehran, like South Korea.
But in a conference call with reporters, senior administration officials said they were confident that they could put the sanctions in effect without damaging the global economy.
Iran currently exports about 2.2 million barrels of crude oil a day, according to the economic analysis company IHS Global Insight, and other oil producers will look to make up much of that capacity, as countries buy less and less oil from Iran. A number of countries are producing more petroleum, including the United States itself, which should help to make up the gap.
Most notably, Saudi Arabia, the world’s single biggest producer, has promised to pump more oil to bring prices down.
“There is no rational reason why oil prices are continuing to remain at these high levels,” the Saudi oil minister, Ali Naimi, wrote in an opinion article in The Financial Times this week. “I hope by speaking out on the issue that our intentions — and capabilities — are clear,” he said. “We want to see stronger European growth and realize that reasonable crude oil prices are key to this.”
By certifying that there is enough supply available, the administration is also trying to gain some leverage over Iran before a resumption of negotiations, expected on April 14.
The suggestion that Saudi Arabia is prepared to make up for any lost Iranian production is intended to remove Iran’s ability to threaten a major disruption in the world oil supply if it does not cede to Western and United Nations demands to halt uranium enrichment.
However, administration officials concede that it is unclear how the oil markets will react to Iranian threats even with the president’s latest certification that there is sufficient oil to fill the gap. “We just don’t know how much negotiating advantage we have gained,” said one senior administration official who has been involved in developing the policy.
In a statement, Jay Carney, the White House press secretary, said the administration acknowledged that the oil market had become increasingly tight, with output just besting demand.
“Nonetheless, there currently appears to be sufficient supply of non-Iranian oil to permit foreign countries” to cut imports, he said.
American officials have also discussed a coordinated release of oil from the national strategic reserves with French and British officials.
Some energy experts question whether Saudi Arabia really has enough spare capacity to make up for the loss of Iran’s oil. But the determination of the United States and Europe to combat high prices might be enough to quiet the markets.
The White House “can have a very limited material impact on the size of supplies,” said David J. Rothkopf, the president of Garten Rothkopf, a Washington-based consultancy. “But they can have a much larger impact on perceptions. In this case, it’s not so much the producers as the energy traders who are moving market prices — and that’s where the White House wants to play a role.”
Additionally, the White House has the ability under the law to waive the new sanctions if they threaten national security or if oil prices spurt, increasing the flow of money to Iran’s government.
Helene Cooper contributed reporting from Burlington, Vt., and David E. Sanger from Cambridge, Mass.
© 2012 The New York Times Company
http://www.nytimes.com/2012/03/31/business/global/obama-to-clear-way-to-expand-iranian-oil-sanctions.html [ http://www.nytimes.com/2012/03/31/business/global/obama-to-clear-way-to-expand-iranian-oil-sanctions.html?pagewanted=all ] [with comments]
===
Clinton: Time running out for diplomacy with Iran
Hillary Clinton
(AP Photo)
By BRADLEY KLAPPER
March 31, 2012 Updated 05:37 PM
RIYADH, Saudi Arabia -- U.S. Secretary of State Hillary Rodham Clinton made clear Saturday that time is running out for diplomacy over Iran's nuclear program and said talks aimed at preventing Tehran from acquiring a nuclear weapon would resume in mid-April.
With speculation over a possible U.S. or Israel military attack adding urgency to the next round of discussions in Istanbul set for April 13, Clinton said Iran's "window of opportunity" for a peaceful resolution "will not remain open forever."
She also expressed doubt about whether Iran has any intention of negotiating a solution that satisfies the U.S., Israel and other countries that believe Iran is trying to develop nuclear weapons. Tehran contends the program is solely for peaceful energy and research purposes.
"We're going in with one intention: to resolve the international community's concerns about Iran's nuclear program," Clinton told reporters after attending a security conference in Saudi Arabia.
"Our policy is one of prevention, not containment. We are determined to prevent Iran from obtaining a nuclear weapon," America's top diplomat said.
"We enter into these talks with a sober perspective about Iran's intentions. It is incumbent upon Iran to demonstrate by its actions that it is a willing partner and to participate in these negotiations with an effort to obtain concrete results."
Her remarks followed President Barack Obama's announcement Friday that the U.S. was moving ahead with penalties aimed at depriving Iran of oil revenue, while also working with Saudi Arabia and other Persian Gulf states to ensure ample global petroleum supplies.
Clinton prodded Gulf governments to develop a coordinated defense strategy against Iranian missiles. With tensions rising in the region, she said American and Gulf militaries should cooperate to improve maritime security as well.
Underscoring the limits of U.S.-Gulf cooperation, however, U.S. officials confirmed Saturday that the United Arab Emirates had shut down an American-funded democracy group, following similar Emirates action against a German organization this past week.
Discussions also covered ways to pressure Syrian President Bashar Assad to end a year of bloodshed from the uprising against his rule, but the focus was on Iran.
"It soon will be clear whether Iran's leaders are prepared to have a serious, credible discussion about their nuclear program, whether they are ready to start building the basis of a resolution to this very serious problem," Clinton said. "It is up to Iran whether they are ready to make the right choice. ... What is certain is that Iran's window of opportunity to seek and obtain a peaceful resolution will not remain open forever."
She said pressure from the economic penalties and international isolation was increasing on Iran to show it is serious about satisfying the world's concerns.
Iran and the six nations involved in the negotiations-- the United States, Britain, France, Germany, Russia and China -- met in Istanbul 14 months ago. But the talks ended after two days with the sides unable to even agree on what to talk about.
Iran has used past talks to delay sanctions or try to divide the international front, while pressing ahead with its nuclear program.
Obama has underlined the need to give time for diplomacy alongside penalties. He said Friday that the U.S. would move ahead with potential measures against U.S. allies and other countries that keep buying Iranian oil. It was the latest step in the campaign to starve Iran of money for its nuclear activity.
The president said the world oil market was tight, but deep enough to keep the squeeze on Iran.
Clinton, who met Friday for almost two hours with Saudi King Abdullah, said the U.S. and Saudi Arabia share an interest in ensuring stable energy markets that foster economic growth.
She recognized the kingdom's efforts to meet increased market demand for countries weaning themselves off Iranian petroleum imports. She also said the U.S. and Sunni governments of the region would cooperate to counter Iranian threats against shipping in the Gulf and Tehran's support for "the Assad regime's murderous campaign."
Before arriving later Saturday in Turkey, where she planned to attend a 60-nation "Friends of the Syrian People" meeting Sunday, Clinton lamented what she called the Assad government's shelling of civilian neighborhoods and targeting of mosques and churches.
She said these attacks have continued despite Assad's acceptance of U.N. mediator Kofi Annan's plan to end the crisis. That plan includes an immediate cease-fire and an eventual democratic transition.
In a concluding statement, the U.S. and the other countries at Saturday's meeting urged Annan to issue a timeline for putting his plan in place.
Western diplomats want to give diplomacy a chance, having invested months of effort to persuade Russia and China, veto-holding members of the U.N. Security Council, to unite behind a common approach. But they, like the Syrian opposition, fear Assad may only be playing for time.
Assad said he wants the plan to succeed, but insists the opposition must first commit to a cease-fire.
The West says the Syrian government must pull back its troops first, and U.S. officials say much of the diplomacy right now concerns the choreography of how the two sides would lay down their arms.
More than 9,000 people have been killed in Syria's violence since last March, according to U.N. estimates.
Gulf countries such as Saudi Arabia and Qatar are among the most impatient and have spoken about possible military intervention, from arming Syria's badly overmatched rebels to creating safe zones from which the rebels can operate.
"I believe we all agree on the need for an immediate cease-fire to the systematic killing," Saudi Foreign Minister Saud al-Faisal said at a news conference with Clinton.
He said the Syrian government's crackdown has "reached the level, at the very least described as crimes against humanity, on which the international community should not remain silent."
Washington fears a military escalation could lead to all-out civil war and play into Assad's hands, considering his vastly more powerful military.
Clinton said officials meeting in Turkey would discuss "additional steps to increase pressure on the regime, provide humanitarian assistance despite the efforts of the regime to block access and advance plans for an inclusive, democratic and orderly transition that addresses the aspirations of the Syrian people."
Clinton said she regretted the decision by the Emirates' this past week to close down the U.S.-based National Democratic Institute and Germany's Konrad Adenauer Foundation. She said she expressed her displeasure in a meeting Saturday with the foreign minister and said the U.S. would continue to press its case.
Copyright ©2012 by The Associated Press
http://abclocal.go.com/wtvd/story?section=news/national_world&id=8603050 [no comments yet]
President Mahmoud Ahmadinejad of Iran, center, visiting the Abadan oil refinery in the southwestern city of Abadan last May.
Amir Pourmand/Agence France-Presse — Getty Images
President Obama has determined there is enough oil in world markets to allow countries to rely less on Iran's oil imports.
Doug Mills/The New York Times
By ANNIE LOWREY
Published: March 30, 2012
WASHINGTON — After careful analysis of oil prices and months of negotiations, President Obama on Friday determined that there was sufficient oil in world markets to allow countries to significantly reduce their Iranian imports, clearing the way for Washington to impose severe new sanctions intended to slash Iran’s oil revenue and press Tehran to abandon its nuclear ambitions.
The White House announcement comes after months of back-channel talks to prepare the global energy market to cut Iran out — but without raising the price of oil, which would benefit Iran and harm the economies of the United States and Europe.
Since the sanctions became law in December, administration officials have encouraged oil exporters with spare capacity, particularly Saudi Arabia, to increase their production. They have discussed with Britain and France releasing their oil reserves in the event of a supply disruption.
And they have conducted a high-level campaign of shuttle diplomacy to try to persuade other countries, like China, Japan and South Korea, to buy less oil and demand discounts from Iran, in compliance with the sanctions.
The goal is to sap the Iranian government of oil revenue that might go to finance the country’s nuclear program. Already, the pending sanctions have led to a decrease in oil exports and a sharp decline in the value of the country’s currency, the rial, against the dollar and euro.
Administration officials described the Saudis as willing and eager, at least since talks started last fall, to undercut the Iranians.
One senior official who had met with the Saudi leadership, said: “There was no resistance. They are more worried about a nuclear Iran than the Israelis are.”
Still officials said, the administration wanted to be sure that the Saudis were not talking a bigger game than they could deliver. The Saudis received a parade of visitors, including some from the Energy Department, to make the case that they had the technical capacity to pump out significantly more oil.
But some American officials remain skeptical. That is one reason Mr. Obama left open the option of reviewing this decision every few months. “We won’t know what the Saudis can do until we test it, and we’re about to,” the official said.
Worldwide demand for oil was another critical element of the equation that led to the White House decision on sanctions. Now, projections for demand are lower than expected because of the combination of rising oil prices, the European financial crisis and a modest slowdown in growth in China.
As one official said, “No one wants to wish for slowdown, but demand may be the most important factor.”
Nonetheless, the sanctions pose a serious challenge for the United States. Already, concerns over a confrontation with Iran and the loss of its oil — Iran was the third-biggest exporter of crude in 2010 — have driven oil prices up about 20 percent this year.
A gallon of gas currently costs $3.92, on average, up from about $3.20 a gallon in December. The rising prices have weighed on economic confidence and cut into household budgets, a concern for an Obama administration seeking re-election.
On Friday afternoon, oil prices on commodity markets closed at $103.02 a barrel, up 24 cents for the day.
Moreover, the new sanctions — which effectively force countries to choose between doing business with the United States and buying oil from Iran — threaten to fray diplomatic relationships with close allies that buy some of their crude from Tehran, like South Korea.
But in a conference call with reporters, senior administration officials said they were confident that they could put the sanctions in effect without damaging the global economy.
Iran currently exports about 2.2 million barrels of crude oil a day, according to the economic analysis company IHS Global Insight, and other oil producers will look to make up much of that capacity, as countries buy less and less oil from Iran. A number of countries are producing more petroleum, including the United States itself, which should help to make up the gap.
Most notably, Saudi Arabia, the world’s single biggest producer, has promised to pump more oil to bring prices down.
“There is no rational reason why oil prices are continuing to remain at these high levels,” the Saudi oil minister, Ali Naimi, wrote in an opinion article in The Financial Times this week. “I hope by speaking out on the issue that our intentions — and capabilities — are clear,” he said. “We want to see stronger European growth and realize that reasonable crude oil prices are key to this.”
By certifying that there is enough supply available, the administration is also trying to gain some leverage over Iran before a resumption of negotiations, expected on April 14.
The suggestion that Saudi Arabia is prepared to make up for any lost Iranian production is intended to remove Iran’s ability to threaten a major disruption in the world oil supply if it does not cede to Western and United Nations demands to halt uranium enrichment.
However, administration officials concede that it is unclear how the oil markets will react to Iranian threats even with the president’s latest certification that there is sufficient oil to fill the gap. “We just don’t know how much negotiating advantage we have gained,” said one senior administration official who has been involved in developing the policy.
In a statement, Jay Carney, the White House press secretary, said the administration acknowledged that the oil market had become increasingly tight, with output just besting demand.
“Nonetheless, there currently appears to be sufficient supply of non-Iranian oil to permit foreign countries” to cut imports, he said.
American officials have also discussed a coordinated release of oil from the national strategic reserves with French and British officials.
Some energy experts question whether Saudi Arabia really has enough spare capacity to make up for the loss of Iran’s oil. But the determination of the United States and Europe to combat high prices might be enough to quiet the markets.
The White House “can have a very limited material impact on the size of supplies,” said David J. Rothkopf, the president of Garten Rothkopf, a Washington-based consultancy. “But they can have a much larger impact on perceptions. In this case, it’s not so much the producers as the energy traders who are moving market prices — and that’s where the White House wants to play a role.”
Additionally, the White House has the ability under the law to waive the new sanctions if they threaten national security or if oil prices spurt, increasing the flow of money to Iran’s government.
Helene Cooper contributed reporting from Burlington, Vt., and David E. Sanger from Cambridge, Mass.
© 2012 The New York Times Company
http://www.nytimes.com/2012/03/31/business/global/obama-to-clear-way-to-expand-iranian-oil-sanctions.html [ http://www.nytimes.com/2012/03/31/business/global/obama-to-clear-way-to-expand-iranian-oil-sanctions.html?pagewanted=all ] [with comments]
===
Clinton: Time running out for diplomacy with Iran
Hillary Clinton
(AP Photo)
By BRADLEY KLAPPER
March 31, 2012 Updated 05:37 PM
RIYADH, Saudi Arabia -- U.S. Secretary of State Hillary Rodham Clinton made clear Saturday that time is running out for diplomacy over Iran's nuclear program and said talks aimed at preventing Tehran from acquiring a nuclear weapon would resume in mid-April.
With speculation over a possible U.S. or Israel military attack adding urgency to the next round of discussions in Istanbul set for April 13, Clinton said Iran's "window of opportunity" for a peaceful resolution "will not remain open forever."
She also expressed doubt about whether Iran has any intention of negotiating a solution that satisfies the U.S., Israel and other countries that believe Iran is trying to develop nuclear weapons. Tehran contends the program is solely for peaceful energy and research purposes.
"We're going in with one intention: to resolve the international community's concerns about Iran's nuclear program," Clinton told reporters after attending a security conference in Saudi Arabia.
"Our policy is one of prevention, not containment. We are determined to prevent Iran from obtaining a nuclear weapon," America's top diplomat said.
"We enter into these talks with a sober perspective about Iran's intentions. It is incumbent upon Iran to demonstrate by its actions that it is a willing partner and to participate in these negotiations with an effort to obtain concrete results."
Her remarks followed President Barack Obama's announcement Friday that the U.S. was moving ahead with penalties aimed at depriving Iran of oil revenue, while also working with Saudi Arabia and other Persian Gulf states to ensure ample global petroleum supplies.
Clinton prodded Gulf governments to develop a coordinated defense strategy against Iranian missiles. With tensions rising in the region, she said American and Gulf militaries should cooperate to improve maritime security as well.
Underscoring the limits of U.S.-Gulf cooperation, however, U.S. officials confirmed Saturday that the United Arab Emirates had shut down an American-funded democracy group, following similar Emirates action against a German organization this past week.
Discussions also covered ways to pressure Syrian President Bashar Assad to end a year of bloodshed from the uprising against his rule, but the focus was on Iran.
"It soon will be clear whether Iran's leaders are prepared to have a serious, credible discussion about their nuclear program, whether they are ready to start building the basis of a resolution to this very serious problem," Clinton said. "It is up to Iran whether they are ready to make the right choice. ... What is certain is that Iran's window of opportunity to seek and obtain a peaceful resolution will not remain open forever."
She said pressure from the economic penalties and international isolation was increasing on Iran to show it is serious about satisfying the world's concerns.
Iran and the six nations involved in the negotiations-- the United States, Britain, France, Germany, Russia and China -- met in Istanbul 14 months ago. But the talks ended after two days with the sides unable to even agree on what to talk about.
Iran has used past talks to delay sanctions or try to divide the international front, while pressing ahead with its nuclear program.
Obama has underlined the need to give time for diplomacy alongside penalties. He said Friday that the U.S. would move ahead with potential measures against U.S. allies and other countries that keep buying Iranian oil. It was the latest step in the campaign to starve Iran of money for its nuclear activity.
The president said the world oil market was tight, but deep enough to keep the squeeze on Iran.
Clinton, who met Friday for almost two hours with Saudi King Abdullah, said the U.S. and Saudi Arabia share an interest in ensuring stable energy markets that foster economic growth.
She recognized the kingdom's efforts to meet increased market demand for countries weaning themselves off Iranian petroleum imports. She also said the U.S. and Sunni governments of the region would cooperate to counter Iranian threats against shipping in the Gulf and Tehran's support for "the Assad regime's murderous campaign."
Before arriving later Saturday in Turkey, where she planned to attend a 60-nation "Friends of the Syrian People" meeting Sunday, Clinton lamented what she called the Assad government's shelling of civilian neighborhoods and targeting of mosques and churches.
She said these attacks have continued despite Assad's acceptance of U.N. mediator Kofi Annan's plan to end the crisis. That plan includes an immediate cease-fire and an eventual democratic transition.
In a concluding statement, the U.S. and the other countries at Saturday's meeting urged Annan to issue a timeline for putting his plan in place.
Western diplomats want to give diplomacy a chance, having invested months of effort to persuade Russia and China, veto-holding members of the U.N. Security Council, to unite behind a common approach. But they, like the Syrian opposition, fear Assad may only be playing for time.
Assad said he wants the plan to succeed, but insists the opposition must first commit to a cease-fire.
The West says the Syrian government must pull back its troops first, and U.S. officials say much of the diplomacy right now concerns the choreography of how the two sides would lay down their arms.
More than 9,000 people have been killed in Syria's violence since last March, according to U.N. estimates.
Gulf countries such as Saudi Arabia and Qatar are among the most impatient and have spoken about possible military intervention, from arming Syria's badly overmatched rebels to creating safe zones from which the rebels can operate.
"I believe we all agree on the need for an immediate cease-fire to the systematic killing," Saudi Foreign Minister Saud al-Faisal said at a news conference with Clinton.
He said the Syrian government's crackdown has "reached the level, at the very least described as crimes against humanity, on which the international community should not remain silent."
Washington fears a military escalation could lead to all-out civil war and play into Assad's hands, considering his vastly more powerful military.
Clinton said officials meeting in Turkey would discuss "additional steps to increase pressure on the regime, provide humanitarian assistance despite the efforts of the regime to block access and advance plans for an inclusive, democratic and orderly transition that addresses the aspirations of the Syrian people."
Clinton said she regretted the decision by the Emirates' this past week to close down the U.S.-based National Democratic Institute and Germany's Konrad Adenauer Foundation. She said she expressed her displeasure in a meeting Saturday with the foreign minister and said the U.S. would continue to press its case.
Copyright ©2012 by The Associated Press
http://abclocal.go.com/wtvd/story?section=news/national_world&id=8603050 [no comments yet]
Greensburg, KS - 5/4/07
"Eternal vigilance is the price of Liberty."
from John Philpot Curran, Speech
upon the Right of Election, 1790
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