Iran's Ahmadinejad to seek Latin American support

Email Print Play VideoEnergy & Oil Video:Copper pipe theft could have been explosive situation for Norfolk church 13 News, WVEC Hampton Roads Play VideoEnergy & Oil Video:Trading Block: The Dollar's High vs the Euro CNBC Play VideoEnergy & Oil Video:What's Moving Oil Now? CNBC By Robin Pomeroy and Daniel Wallis – Sat Jan 7, 11:20 am ET TEHRAN/CARACAS (Reuters) – Iranian President Mahmoud Ahmadinejad will seek support from Latin America's leftist leaders on a tour starting on Sunday after tough new Western sanctions targeted Iran's oil industry. With one eye on his standing at home ahead of March's parliamentary election, Ahmadinejad will meet other anti-American presidents on a trip Washington said showed Iran was "desperate for friends." His first stop is OPEC-ally Venezuela, where Ahmadinejad has been assured a warm welcome by President Hugo Chavez. He will also visit Cuba and Ecuador and attend the inauguration of re-elected Nicaraguan President Daniel Ortega. "We are making absolutely clear to countries around the world that now is not the time to be deepening ties, not security ties, not economic ties, with Iran," U.S. State Department spokeswoman Victoria Nuland said on Friday. "As the regime feels increasing pressure, it is desperate for friends and flailing around in interesting places to find new friends," Nuland said. President Barack Obama signed new measures into law on New Year's Eve that will make it harder for most countries to buy Iranian oil. The European Union is expected to announce some form of ban on Iranian oil by the end of the month. The sanctions are aimed at forcing Iran to halt its nuclear work, which the United States and its allies say is aimed at producing bombs. Iran says it is for power generation only. The sanctions are already hurting Iranians. Faced with rising prices and a falling rial currency, they have been queuing at banks to convert savings into dollars. "The representative of the dignified people of Iran will be welcome," Chavez said last week as Iranian naval exercises helped push up global oil prices. But it remains to be seen how far Chavez would go in backing Iran's threat to close the Strait of Hormuz, the world's most important oil shipping lane, or how much he could undermine the sanctions by providing fuel or cash to the Islamic Republic. Other regional leaders due to receive Ahmadinejad, such as Ortega and Ecuador's Rafael Correa, have a similar ideological stance to Chavez but fewer resources available to help Iran. Ahmadinejad, who is subordinate to Supreme Leader Ayatollah Ali Khamenei on foreign policy, has said little about the spike in tensions with the West, leaving it to military commanders to make the most bellicose statements. Under increasing fire from rival hardliners aiming to stop his supporters making gains in the March election, Ahmadinejad will hope the foreign tour will show voters he still has international clout and is not, as his critics say, a lame duck. With less than 18 months left of his presidency, he will be keen to preserve his legacy as a leader who stood up to Washington in a changing Middle East. PRIVATE TALKS The friendly relations between Ahmadinejad and Chavez are a growing source of concern for Obama. In a newspaper interview last month, he said: "Sooner or later, Venezuela's people will have to decide what possible advantage there is in having relations with a country that violates fundamental human rights and is isolated from most of the world." Chavez replied that Obama should mind his own business. In the past, Chavez has threatened to stop oil exports to the United States, but has never followed through. He and Ahmadinejad can be expected to announce new deals during the trip. Iran has built homes, dairies and vehicle factories in the South American country. But analysts say their private talks are likely to be more significant. The Washington D.C.-based Center for Strategic and International Studies (CSIS) think-tank said this week Iran had funded joint ventures across the region that could help it sidestep trade restrictions with the West, and Venezuela led the rest of Latin America in such arrangements. "In almost all cases, joint ventures and investments seem directed at either political objectives or possible clandestine technology transfer, not profits," the CSIS said in a report. It said Iran wanted to challenge the United States in its own backyard and the easiest way was to "exploit" the loose alliance of leftist leaders headed by Chavez. But Chavez's close ties with Iran are likely to be jumped on by opponents who hope to unseat him at an election in October. "I think it's absolutely harmful, a visit that gives no help at all to international politics, that keeps away investors and will contribute to bringing chaos to the country," opposition lawmaker Edgar Zambrano told Reuters TV. (Additional reporting by Sebastian Rocandio in Caracas; Editing by Janet Lawrence) ==================== FACTBOX-Iranian ties with nations on Ahmadinejad's tour 09 Jan 2012 17:16Source: Reuters // Reuters Jan 9 (Reuters) - Iran's President Mahmoud Ahmadinejad visits Venezuela, Nicaragua, Ecuador and Cuba this week to shore up support from their leftist leaders as tough new Western sanctions target the Islamic Republic's economy. Here are some key facts about political relations and business ties between Iran and the countries he will visit: VENEZUELA: * Chavez's first stop was in fellow OPEC member Venezuela, where he received a warm welcome from its socialist President Hugo Chavez. They have become close ideological and commercial allies in recent years - much to the annoyance of Washington. * Both men want to weaken U.S. "imperialism" and Chavez supports Iran's nuclear program, which Tehran insists is peaceful. Iran is helping Venezuela map its uranium deposits, although the South American country does not yet mine the mineral. * Washington slapped limited sanctions on Venezuela's state oil company PDVSA last year after accusing it of illegally sending at least two cargoes of oil products to Iran worth about $50 million. But that did nothing to curb PDVSA's oil exports to the United States of almost 1 million barrels a day. * The U.S. Treasury Department imposed sanctions in 2008 on the subsidiary of an Iranian bank operating in Venezuela. Washington said the bank helped Iran channel money to weapons programs. Iran and Venezuela both denied the charge. * The two countries' militaries have said that a deal between them includes cooperation on training, but did not give details. * Venezuelan exports to Iran are just a fraction of its imports from Iran, which in 2009 were worth almost $90 million. * In 2010, Venezuela and Iran agreed to set up a joint development bank with starting capital of $200 million. * The two countries have signed dozens of deals worth hundreds of millions of dollars on paper. Iran has built housing developments, dairies and vehicle factories in Venezuela. For more details on Iran-Venezuela ties: ECUADOR: * Ecuador and Iran have boosted ties since President Rafael Correa, a fierce critic of U.S. foreign policy, took office in 2007. Ecuador says the two nations have signed 32 agreements in the past few years to strengthen cooperation in areas including farming, technology, renewable resources and health. * Ahmadinejad and Correa often give each other strong verbal support, but most of the deals remain only on paper for now. * When Correa visited Tehran in Sept 2008 he agreed to build an oil refinery and petrochemical plant in the Andean country, with help from Iran and Venezuela. The agreement also covered Iranian training for Ecuadorean oil workers, and cooperation on the maintenance of Ecuador's oil facilities. * In 2010 the two nations said they would build two hydroelectric plants in Ecuador to produce 100 megawatts. After a visit by senior Iranian officials to Ecuador last year, Iran offered to build a clinic, provide medical training to Ecuadoreans, and export medicines to the country. * Correa said in Feb 2010 that Ecuador's inclusion on an international list of nations accused of lagging in the fight against money laundering was a hypocritical punishment for his administration's warm ties with Tehran. * Ahmadinejad offered support to Correa after a violent mutiny by some Ecuadorean police in Sept 2010. He also offered to help with a jungle conservation project. * Ecuador's government says the two nations have also negotiated investment protection agreements, cooperation between their central banks, and have discussed tax and custom issues in a bid to boost bilateral trade. NICARAGUA: * Iran and Nicaragua have forged strong public ties since Ahmadinejad travelled there to congratulate President Daniel Ortega on his return to power in 2007, 20 years after the two countries were embroiled in a Cold War political row. * Relations between the two nations hit rock bottom in the 1980s when it emerged that officials in U.S. President Ronald Reagan's administration channeled cash from arms sales to Iran to right-wing Contra rebels pitted against Ortega's leftist Sandinistas during his first stint in the presidency. * Iran has pledged to boost economic cooperation with Nicaragua, one of the poorest nations in Latin America, promising to help fund a new $350 million ocean port, build houses and assist with an ambitious hydroelectric project. But little of this has been realized so far. * Nicaragua has been able to fund social problems with oil money from Chavez's Venezuela. CUBA: * Iran and Cuba are two of the four countries on the U.S. State Department's list of terrorism sponsoring countries, with the other two being Syria and Sudan. * Relations between Iran and Cuba have grown more active in the past decade, with Iran granting almost $700 million in credits to the Caribbean island. * Cuba lent its expertise to the construction of biotechnology research and production center in Iran that has occasionally been accused by Cuba's opponents of having links to biological weapons. The allegations have been denied and never substantiated. * Cuba has not used much of the credit line, but bought 750 train cars from Iran to help refurbish its badly deteriorated train system. Total trade between the two countries in 2009, the last year for which numbers are available, was $27 million, according to the Cuban government. * Cuba has expressed support for Iran's nuclear program and defended its right to use nuclear energy for peaceful purposes. Former Cuban leader Fidel Castro has predicted that Iran's nuclear activities will lead to an attack by Israel and the United States and a nuclear war. (Reporting by Daniel Wallis in Caracas, Eduardo Garcia in Quito, Dave Graham in Mexico City and Jeff Franks in Havana; Editing by Kieran Murray) ======================= The price of Brent crude futures gained more than 5 percent last week, lifted by Iran’s threat to shut a key oil shipping route in response to tighter economic sanctions. The Brent price rose above $112.50 a barrel on Jan. 10, a day after Iran confirmed it had started enriching uranium at an underground site near the city of Qom. The U.S. state department called the move a “further escalation” of violations of U.N. resolutions. Net long ICE Brent crude positions held by money managers increased by more than 40 percent in the two weeks to Jan. 3 as prices increased to around $112 per barrel. Most of the price rise came on Jan. 3, the first trading day of the New Year for ICE futures and options, as fears spread of a more open confrontation between Washington and Tehran that could lead to a disruption to shipping in the Mideast Gulf. Crude response Iran sanctions shouldn't shift oil price 10 January 2012 | By Kevin Allison PrintEmailSave Tough new sanctions against Iran do not, by themselves, justify a big spike in oil prices. The restrictions on Iranian exports and finance are not changing the world’s supply-demand balance. Only a serious military escalation in the Gulf would do that. Details of a European Union embargo have yet to be hammered out and the full effects of tougher U.S. sanctions won’t be felt for a while. But while Tehran will feel financial pain – and production growth might be hampered – the Islamic Republic’s 2.5 million barrels per day of oil exports are unlikely to fall sharply. Who will still buy Iran’s oil? Japan, South Korea and Turkey, which together buy more than 30 percent of the country’s oil exports, are expected to seek a waiver from the U.S. rules. Several refiners in India, which accounts for a further 13 percent of Tehran’s exports, already settle their contracts through a state-owned Turkish bank. They can probably dodge the American limits. Then there is China, which has been buying 22 percent of Iran’s exports. Deliveries of Iranian crude to the People’s Republic fell to half their 2011 average in January. Chinese traders bought higher-priced Russian and Vietnamese supplies instead. But this smacks more of price brinkmanship, not a newfound respect for U.S. sanctions. By squeezing Iran today, China could increase its chance of scooping up stranded crude at a fat discount in a few months’ time. European refiners might pay more for Russian or Iraqi crude, Iranian oil’s closest substitutes. But that will not have much effect on oil prices, which are already near record highs in euro terms. And any price spike could quickly be self-cancelling, if it accelerated a slide into recession. Sanctions may not change the world’s supply of oil much, but the political and military tension which surrounds them could have a big effect on the moods of oil traders. Sabre-rattling, including Monday’s reports that Iran has started to refine enriched uranium, means a military conflict can’t be ruled out. Unless there is a conflict, though, Iran will only make oil prices volatile, not higher. ================ Iran strait "keeps me awake at night"-US Navy boss 10 Jan 2012 19:27 Source: Reuters // Reuters By Phil Stewart WASHINGTON, Jan 10 (Reuters) - The chief of the U.S. Navy acknowledged on Tuesday that preparing for a potential conflict in the Strait of Hormuz is the kind of thing he loses sleep over. "If you ask me what keeps me awake at night, it's the Strait of Hormuz and the business going on in the Arabian Gulf," said Admiral Jonathan Greenert, who became the chief of naval operations in September. The comments by Greenert follow threats by Iran last month to shut off the Strait of Hormuz -- the world's most important oil shipping lane -- if new U.S. and EU sanctions over its nuclear program halted Iranian oil exports. The United States has said it would not allow Iran to block the Strait, calling it a "red line" for the U.S. military. General Martin Dempsey, the top U.S. military officer, said over the weekend said that would be a "intolerable act." "Yes, they can block it ... But we would take action and reopen the Straits," Dempsey told a television talk show. Greenert did not get into details about what steps the U.S. Navy would take to re-open the Strait. But when asked what about the Strait kept him awake at night, he responded: "I'm an organizer, a trainer and equipper. I'd make sure that our people have the right equipment to do the right thing." "Our folks that transit in and around that area, I want to make sure that they're able to (deal) with the things that they need to deal with, basically self-protection, counter-swarm, ASW (anti-submarine warfare)," Greenert said. Air Force Chief of Staff General Norton Schwartz told Reuters on Monday the Air Force would "clearly" play a role in potentially unblocking the Strait of Hormuz, if the United States took on that job. He said the Air Force could ensure "either localized or broader air superiority," providing support to other U.S. military assets and ensuring secure communications channels through satellites. It would also play a key role in providing surveillance data from its satellites and aircraft. (Reporting By Phil Stewart; Editing by Cynthia Osterman) =============== Saudis have enough oil to make up for Iran: US' Cantor 13 Jan 2012 22:26 Source: Reuters // Reuters * Cantor saw Saudi oil minister in tour of Gulf * Favors further sanctions to increase pressure on Iran * UAE could have excess capacity on line this year, he says (Adds details of pending sanctions legislation, quotes, byline) By Susan Cornwell WASHINGTON, Jan 13 (Reuters) - Saudi Arabia says it has enough oil output capacity to meet global customers' needs if new sanctions keep Iran from exporting oil, a top U.S. Republican lawmaker said on Friday. House of Representatives Majority Leader Eric Cantor spoke to Reuters by telephone from Europe after several days of meetings in the Middle East, including Saudi Arabia. Saudi oil minister Ali al-Naimi was among the officials he met. "The Saudi government indicated that it was ready and able to meet needs of its customers," Cantor told Reuters. Saudi Arabia is the world's largest oil exporter. Its top customers include the United States, Japan, China and South Korea. Cantor was addressing concerns that oil shortages may arise from new sanctions in the offing against Iran by the United States and European Union, aimed at discouraging Tehran's nuclear program. The United States has long embargoed Iranian crude, but has just approved new sanctions targeting Iran's Central Bank, the main conduit for its oil revenues. The European Union, which collectively buys about 500,000 bpd of Iranian oil, is expected to soon impose an embargo halting imports. The goal of the West's increased pressure on Tehran is to stop the Islamic republic from building a nuclear weapon. Iran says its nuclear work is for peaceful purposes. Cantor is the number two Republican in the Republican-majority House of Representatives, after Speaker John Boehner. During his tour of the Gulf region with several other U.S. lawmakers, Cantor also met officials from Turkey, Qatar and the United Arab Emirates (UAE). "They also expressed the ability to have excess capacity coming on line later this year, as well as the capacity it has online now," Cantor said of oil producer UAE. "I think the consensus is that there is enough capacity in the region to meet the needs of customers, excluding the exports of Iran," he said. FURTHER SANCTIONS IN THE WORKS Cantor said he would push for the speedy implementation of the new U.S. sanctions on Iran's central bank, and he favored Congress passing further measures to penalize Tehran if it does not stop its nuclear program. "We don't have time" to delay, he said. The measures Obama signed into law on New Year's Eve would allow the president to sanction foreign banks that do business with Iran's central bank. But they do not kick in for several months, and give Obama wide latitude to pull his punches and avoid imposing penalties. As soon as the central bank sanctions passed Congress in December, the U.S. House of Representatives passed another piece of legislation that would close some loopholes in existing sanctions and further choke off trade with Tehran. The House bill included a provision that would deny entry to the United States of any ship that has recently visited a port in Iran, North Korea or Syria. Similar legislation has been introduced in the Senate. A bipartisan sanctions bill could be considered in committee soon after senators return to work from a winter recess later this month, a Senate aide said on Friday. Some officials in the Middle East shared his sense of urgency about the need to stop Iran from getting the capacity to build nuclear weapons, Cantor said. "I think that the consensus is, no one wants Iran to be a nuclear power," Cantor said. However, some officials in the region "believe you can't stop Iran from doing it, because the regime has nothing to lose," Cantor said. "What that tells me is everything has got to be on the table," said Cantor, a hawk on defense issues, using language that implies the willingness to use military force as an option to deny Iran the means of developing an atomic bomb. The Obama administration has said there are no options "off" the table. (Reporting By Susan Cornwell; editing by Doina Chiacu and Todd Eastham)