Europe Squeezed in US-Iran Nuclear Deal Dispute

Europe Squeezed in US-Iran Nuclear Deal Dispute

Europe now finds itself in the impossible situation of trying to salvage an accord unraveling because of the maximalist US sanctions campaign against Iran.

Since President Trump withdrew America from the accord over 1 ago, a fire has burned through Iran.

At 1st, it appeared Iranian officials thought they might be able to wait out President Trump. They spoke about “strategic patience” as the US Y 2020 Presidential election approached.

That talk faded and US sanctions choked off Iran’s vital Crude Oil sales abroad and then began targeting its paramilitary Revolutionary Guard and officials including Supreme Leader Ayatollah Ali Khamenei.

The talk changed to “strategic action” and making threats to the Strait of Hormuz, a crucial global Crude Oil supply point.

That action has seen Iran break the limit put on its stockpile of low-enriched uranium under its Y 2015 nuclear deal with world powers. President Hassan Rouhani says that starting this Sunday, Iran will begin enriching uranium to “any level we think is necessary and we need.”

Those steps combined could see Iran narrow the 1-year window it needs to have enough material ready to potentially build a nuclear weapon, something Iran denies it wants to do, but the atomic accord prevented.

To Iran, the only people who now can prevent further escalation in the crisis are in Europe. Among the parties to the deal are Britain, France and Germany, while the EU also has aided in the diplomacy.

Iran is now targeting Europe

The “actions of the Europeans have not been enough so the Islamic Republic will move ahead with its plans as it has previously announced,” Iranian Foreign Minister Mohammad Javad Zarif Monday.

Maja Kocijancic, a spokeswoman for EU foreign policy chief Federica Mogherini, said Thursday that Europe “called on Iran to reverse these steps and to refrain from further measures that would undermine the nuclear agreement.”

One analyst writes, “But what, if anything, the Europeans can offer remains in question. They’ve pointed to INSTEX, a trading vehicle that allows European and Iranian firms to send goods abroad and be paid locally to avoid American sanctions. However, questions remain if Iran will set up a matching system itself to facilitate the trade. The EU says from its side that INSTEX “is now operational and its first transactions are being processed.”

For Iran, being able to sell oil through INSTEX remains its most important concern.”

“Without (an) Oil deal, it’s very clear INSTEX will not work,” Iranian Oil Minister Bijan Namdar Zangeneh said this week. However, Iran may have been able to export some Oil to China last week despite sanctions.”

The US is set to sanction INSTEX if it moves outside the bounds of food and medicine, which America still allows to be sold into Iran. And even if it did, there’s no sign that any major company would be willing to risk US sanctions in the name of European diplomacy, something The Trump Administration is happy to point out.

We just don’t see any corporate demand for it because if a corporation is given a choice between doing business in the United States or doing business in Iran, it’s going to choose the United States every single time,” Brian Hook, the US special representative for Iran, said in May.

“Be careful with the threats, Iran,” President Trump wrote early Thursday on Twitter. “They can come back to bite you like nobody has been bitten before!”

In conclusion

Europe now finds itself directly involved in halting the flow of Iranian Crude Oil abroad.

Thursday, authorities in Gibraltar stopped an Oil tanker believed to be carrying Iranian crude to Syria. While Gibraltar said it made the seizure with British assistance over EU sanctions on Syria, the timing likely will not go unnoticed by officials in Tehran.

Spain’s claim the seizure came at the request of the US undoubtedly will get attention as too.

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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