The conflict between Western powers and Iran regarding the latter’s nuclear program have recently resulted in the passing of sanctions.
The United States and the European Union have agreed that boycotting oil imports from Iran, freezing the assets of their Central Bank and limiting the ability of Iranian banks to do business internationally is the best course of action. These sanctions will go into effect in July 2012, though Iran warns of stopping oil exports to Europe earlier.
An announcement was made on Wednesday, February 15th by the Iranian English-language Press TV. They stated that the country had already stopped exporting oil to the six EU countries of France, Portugal, Italy, Greece, Spain and the Netherlands.
This report was quickly denied by Iran’s Oil Ministry. They say that no oil exports have been stopped, but that Iran is looking towards ceasing exports as the best option to retaliate against what they see as unjust sanctions from the West. The move to halt oil flow before the sanctions take effect in July would prevent the EU from having the time they need to secure alternative oil sources.
Following the initial announcement from Press TV, oil prices jumped. Whether the oil stops due to the EU sanctions or as a result of a preemptive political move by Iran, many believe it could have a profound negative impact on the struggling EU economies and that Iran may not even feel those effects. Being that oil is in high demand, it is likely that they could easily find other countries besides the EU to export to.
Iran has also stated their willingness to return to negotiations regarding its nuclear program, though they refuse to accept preconditions to the talks. The Iranian government claims that its nuclear program is peaceful in nature and that the construction of weapons is not their goal.
The US believes that Iran’s behavior is proof that the sanctions are having the desired effect. They also state that they do not believe the Iranian nuclear program is as far along as their government would like others to believe, despite Iran’s bold claims of progress. Who breaks first in this political oil struggle remains to be seen.