Our Beacon Forum

Sweet crude
By:Muhammad Rafi Karachi
Date: Sunday, 4 March 2012, 4:35 pm

Subject: SWEET CRUDE

Iran has cut its oil flow to British and French companies, in response to the unilateral sanctions on the country’s oil exports, on the pretext of concerns over its peaceful nuclear program.

Prominent columnist and commentator, Nader Mokhtari says that Europe is not able to pay for its oil debts to Iran for the last six months and sanctions starting from July (rather than now) is a move to get more free oils till July, if that is possible, before putting an embargo on Iran's oil exports.

Below is an interview with columnist and commentator, Nader Mokhtari to further discuss the issue.

What follows is an approximate transcription of the interview.

Q: Tell us about this and if you can you elaborate… why is it that Iran has chosen to just stop selling the oil exports to the French and British companies now? What is your take on it?

Mokhtari: Sales is a two-way street. You offer goods and you get paid for it. What has happened is that France and five other European nations are way overdue on their payments for Iranian oil.

Now… this issue of banging on about Iran’s nuclear energy being the reason or rather an excuse for oil embargo; well there are sources in Iran who are aware that is the case. If Europe has not paid for its oil for the last six months and it wants to drag it out to another six months and then go for embargo’s soas to have received a year of free oil from Iran, they really do think, in their imperial mindset of the past, that they are dealing with little colonial natives who could be manipulated in this 21st century.

And the source of this saying that Iranian nuclear energy is the reason for their oil embargo; it is not at all. They have to learn to pay their bills and be adultabout it. But the fact of the matter is that they cannot pay their bills let alone service their debt, which is why their bank credit ratings by Moodys are being reduced at the moment. Therefore they are looking for gunboat diplomacy.

Nuclear program is just an excuse not to pay for the commodities purchased. Previously the excuse was Iran's nuclear armament program. If you have now noticed, the Western media, especially in the US is now using the phrase 'capabilities' of nuclear armament' to justify its sanctions on Iran because the earlier phrase was not being accepted by the thinking world, knowing that Iran is not producing nuclear armaments. They will use a thousand excuses, to justify their attack on Iran, knowing Iran has, in the last 30 years have survived and prospered technologically even to put rockets and satellites in space.

Q: Ok, so tell me, how do you think overall will this affect Iran in a negative way as a lot of Westerners are saying?

Mokhtari: Eighty refineries in Europe receive Iranian crude oil, which is a sweet (sulfur free) light crude. It is golden in texture and very light and very cheap to refine. It is very different from the tar-like Saudi heavy crude which is high in sulfur. They will have to recalibrate their refineries in order to use the Saudi oil.

So, what happens is, it takes about two months to re-gauge their refineries, after which the high sulfur oil of Saudi Arabia will have to be refined attwice the cost. And this cost will then have to be passed on to their European customers.

So, this is not very realistic, number one. At the same time, I do not see how Europe, in the financial predicament that it is, can go for such action. Where Iran is concerned, Iran’s light sweet oil is one of the best in the world and the Asian nations and S. Africa are all eager to buy. India has just increased its quota for this year by 50% and arrangements have been made to barter gold and food commodities and rupees if the Western banks refuse to do the money transfers. Arrangements are also being made to transfer goods and services overland from India, Pakistan and China through Afghanistan into Iran and to expedite the building of an oil pipeline from the Iranian border to Pakistan, India and China.. That is the reason the leaders of Iran, Afghanistan and Pakistan had a meeting a couple of days ago.

Iran will never be short of customers for its petroleum products, or for its oil. So, Iran is fairly confident that there are other customers out there who are willing to take on and buy this oil and pay for it on time, unlike Europe. Even Russia is eagre to buy our oil and supply it to their southern republics.

The Europeans say the Saudis will substitute any shortcomings. However, if the entrance to he Gulf, the Strait of Hormuz is closed by Iran in case of an attack by Israel or the US/British fleets, Saudi, Emirati, Kuwaiti, and Iraqi oil cannot be exported too. The pipelines across the Emirates to Oman can hardly pump 6% of daily 17 million barrels of oil that passes through the Strait. Not only that, the super tankers cannot pass through the Strait of Hormuz except through Iranian waters.

Even if the Strait of Hormuz stays closed for three to six months, that will devastate not only the EU but also the Gulf region, Chinese, Japanese. Indian and Korean economies, in other words, the world. The Euros and the Dollars will be worth nothing.

The new world order will have to be recreated where the US will not be the only Superpower anymore. The EU on the other hand, with no resources of its own (except coal and potatoes and a trickle of oil in the North Sea) will be the "sick man of the world" always ready to plunder the world at least for a while with their aging weapons.

The plunder of Libya is a prime example.