Iran delays EU oil ban as suppliers eye Turkey

TEHRAN

A lawmaker walks during a parliament session in Tehran as Iranian MPs debate whether to immediately cut the flow of crude oil to Europe in retaliation for sanctions. REUTERS photo

U.N. nuclear inspectors began a critical mission to Iran yesterday to probe allegations of a secret atomic weapons program amid escalating Western economic pressures and warnings about safeguarding Gulf oil shipments from possible Iranian blockades.

The findings from the three-day visit could significantly influence the direction and urgency of U.S.-led efforts to rein in Iran’s ability to enrich uranium, which Washington and allies fear could eventually produce weapons-grade material. Iran has refused to abandon its enrichment labs, claiming it only seeks to fuel reactors for energy and medical research.

The International Atomic Energy Agency (IAEA) team is likely to visit an underground enrichment site near the holy city of Qom, 130 kilometers south of Tehran, which is carved into a mountain as protection from possible airstrikes. Earlier this month, Iran said it had begun enrichment work at the site. 

Ahead of his arrival, the IAEA Deputy Director General Herman Nackaerts, who is in charge of the agency’s Iran file, said he wanted Tehran to “engage us on all concerns,” according to an Associated Press report. 

The IAEA team will be looking for permission to talk to key Iranian scientists suspected of working on a weapons program. They also plan to inspect documents related to nuclear work and secure commitments from Iranian authorities to allow future visits. It is unclear how much assistance Iran will provide, but even a decision to enter a discussion over the allegations would be a major departure from Iran’s past refusal to talk about them.

Parliamentary debate

The visit coincided with a planned debate in Iran’s Parliament over whether to immediately cut the flow of crude oil to Europe in retaliation for sanctions. The European Union last week announced an embargo on Iranian oil that is set to take full effect in July. But Iranian lawmakers yesterday delayed taking action on a proposed bill to immediately cut oil exports to Europe, the Parliament’s energy commission said. 

“No bill has been designed nor has it come to Parliament,” commission spokesman Emad Hosseini told Mehr news agency. He said he hoped negotiations on preparing the bill would be finalized before Jan. 3.

Lawmakers had initially been expected to bring the bill before Parliament yesterday after calling for it to be drafted under “double emergency” procedures. The proposed text aims to immediately halt oil exports to Europe in a bid to destabilize the fragile economies of several EU states. But Hosseini said there was no bill yet, just “an idea by lawmakers” that still had to be studied by the energy commission before one could be drafted.

Meanwhile, the head of Iran’s state oil company said yesterday that pressures on Iran’s oil exports – the second biggest in Organization of the Petroleum Exporting Countries (OPEC) – could drive prices as high as $150 a barrel. “It seems we will witness prices [rising] from $120 to $150 in the future,” Ahmad Qalehbani was quoted by the official Islamic Republic News Agency. According to a Reuters report, Benchmark Brent crude prices rose to around $111.50 a barrel on Jan. 27 on expectations Iran’s Parliament would vote to halt exports to the European Union as early as next week.

Qalehbani also warned foreign oil companies to either renew their long-term contracts with Tehran or face the consequences of losing their benefits from the OPEC’s second largest producer. Under buyback contracts, a common feature of the Iranian oil industry, investments in oil field projects are paid back in oil, often over many years.