Iran warmly welcomes sanctions’ end, though long thaw ahead

Updated 17 January 2016
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Iran warmly welcomes sanctions’ end, though long thaw ahead

TEHRAN: The announcement on Saturday that Iran had satisfied its obligations under a nuclear deal with world powers was expected to pave the way for a new economic reality in the Islamic Republic, free from years of harsh international economic sanctions.
The formal declaration in Vienna marked the official start of the landmark July deal between Tehran and six world powers — the US, Britain, France, Russia, China and Germany. In advance of that announcement, Iran and the US conducted a prisoner swap that saw seven Iranians held in America released in exchange for four Iranian prisoners with dual nationalities — including Washington Post bureau chief Jason Rezaian.
“All sides remain firmly convinced that this historic deal is both strong and fair,” said European Union foreign policy chief Federica Mogherini, speaking alongside Iranian Foreign Minister Mohammad Javad Zarif. “This is an encouraging and strong message that the international community must keep in mind in our efforts to make the world a safer place.”
US Secretary of State John Kerry, speaking separately, said Iran “has kept its word and we shall do the same.” However Kerry emphasized the need for the UN and world powers to remain vigilant in ensuring Iranian compliance going forward.
As the speeches in Vienna were still taking place, Iran’s President Hassan Rouhani, a strong supporter of the deal, tweeted in celebration: “#ImplementationDay--I thank God for this blessing & bow to the greatness of the patient nation of Iran. Congrats on this glorious victory!“
While some financial issues may take days to figure out, Iran greeted the news with muted celebrations since the Vienna statement didn’t come until well after midnight in Tehran. However celebratory messages circulated on social media.
“Hello to life without sanctions,” said one message shared on the Telegram app and other social messaging apps. Another read: “Thank you Rouhani, Thank you Zarif.”
For Iran, long out in the economic cold over its contested atomic program, implementing the nuclear deal will be a welcome thaw.
More than $30 billion in assets overseas will become immediately available to the Islamic Republic. Iran’s Central Bank Governor, Valiollah Seif, was quoted by the official IRNA news agency as saying that Iran will not transfer the cash and instead will use it to import the goods it needs. Official Iranian reports have set the total amount of frozen Iranian assets overseas at $100 billion.
A European oil embargo on Iran will end. Already, some 38 million barrels of oil are in Iran’s floating reserves, ready to enter the market, according to the International Energy Agency.
All that means even more money coming into the country, allowing it to undertake needed repairs to its oil and gas fields to boost its own production. Iran is home to the world’s fourth-largest proven reserve of crude oil and ranks second in proven natural gas reserves behind Russia.
Tehran already seems to be making plans for its post-sanctions economy and infrastructure. Transport Minister Abbas Akhondi told the official IRNA news agency Saturday that his government had agreed to buy 114 new planes from the European consortium Airbus. Iran is looking to buy up to 400 new planes to replace its aging commercial fleet — some of which has been grounded due to a lack of spare parts.
Sizeable financial challenges will remain for Iran, a country in which ATMs don’t link to the global banking system and restaurants can’t accept foreign credit cards. Local banks remain lumbered with bad debt, inflation is still high and unemployment stands around 10 percent.
The International Monetary Fund in October noted that some businesses and consumers were putting off major purchases in hopes of getting higher-quality foreign goods when sanctions end. This delayed spending is dragging down domestic growth, but could amplify the economic boost delivered by the sanctions lifting.
Meanwhile, the global economy is still staggering after the Great Recession and oil is selling at around $30 a barrel, a 12-year low already affecting Iran’s oil-producing neighbors in the Gulf. Any new Iranian supply to the market is likely to keep oil prices down.
“In terms of the global backdrop, Iran’s reintegration could hardly come at a worse time,” an October report by the Dubai-based bank Emirates NBD said. “Ultimately, we still suspect that growth can rebound sharply.”
Under the deal, the United Nations’ arms embargo on the country continues, as do ballistic missile restrictions.
Since July, there has been some hard-line pushback. Iran’s powerful Revolutionary Guard has launched missiles and shown footage of an underground weapons base in the Islamic Republic, and Supreme Leader Ayatollah Ali Khamenei has warned against Western influence spreading in the country.
But this week, when US sailors were captured by Iran after straying into its territory, the Islamic Republic let them leave within a day after direct contacts between Kerry and Zarif. The two diplomats formed close ties during the nuclear negotiations.
Kerry said Saturday that the mutual prisoner swap was not formally linked to the nuclear deal, but that it was “accelerated in light of the relationships forged ... in the nuclear talks.”
The deal also could affect Iran’s upcoming parliamentary election in February, further changing the balance of political power in the Islamic Republic. Already, analysts have said they believe it will boost allies of moderate President Hassan Rouhani, whose administration helmed the deal.
But since the deal, there have been a series of legal cases in Iran targeting poets, filmmakers, artists, activists and journalists, which analysts attribute to hard-liners’ continuing struggle with moderates.
Prominent analyst Sadeq Zibakalam said implementation of the nuclear deal has brought a genuine rapprochement between Iran and the West for the first time in nearly four decades.
“It’s the first time, 37 years after Iran’s 1979 revolution, that Iran has succeeded in détente with the West, specifically with the US despite radical and hard-line opponents both inside Iran and America as well as the Israeli lobby and Saudi opposition,” Zibakalam said.


Analysis: What happens if Iran closes the Strait of Hormuz?

Updated 6 sec ago
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Analysis: What happens if Iran closes the Strait of Hormuz?

  • Tehran has never fully closed the strategic waterway but it has threatened to do so many times in response to geopolitical tensions
  • Iran-Israel war has potentially immediate ramifications for energy-exporting Gulf states and, in the longer term, for the entire world

LONDON: It is thanks to a quirk of ancient geological history that almost half the global oil and gas reserves are located under or around the waters of the Arabian Gulf, and that the flow of the bulk of bounty to the world must pass through the narrow maritime bottleneck that is the Strait of Hormuz.

On Friday, Israeli Prime Minister Benjamin Netanyahu told the world that Israel’s unprecedented attack on Iran earlier in the day was an act of self-defense, aimed at disrupting its nuclear program.

By Saturday, Israel had broadened its targets from nuclear facilities, ballistic-missile factories and military commanders to oil facilities in apparent retaliation for waves of missile and drone strikes on its population centers.

In his video broadcast, Netanyahu said: “We will hit every site and every target of the ayatollahs’ regime, and what they have felt so far is nothing compared with what they will be handed in the coming days.”

In a stroke, Israel had escalated the conflict into a crisis with potentially immediate ramifications for all the oil- and gas-producing Gulf states and, in the longer term, for economies of the region and the entire world.

Reports originating from lawmakers in Tehran began to circulate suggesting that Iran was now threatening to close the Strait of Hormuz. Sardar Esmail Kowsari, a member of Iran’s parliament and a commander in the Islamic Revolutionary Guard Corps, warned in an interview that closing the waterway “is under consideration and that Iran will make the best decision with determination.”

While the strait is, in the words of the US Energy Information Administration, “the world’s most important oil transit choke point” — about a fifth of the world’s total petroleum liquids consumption passes through it — the two main oil producers, the UAE and Saudi Arabia, are not without alternative routes to world markets for their products.

Saudi Aramco operates twin oil and liquid gas pipelines which can carry up to 7 million barrels a day from Abqaiq on the Gulf to Yanbu on the Red Sea coast. Aramco has consistently shown resilience and ability to meet the demands of its clients, even when it was attacked in 2019.

The UAE’s onshore oil fields are linked to the port of Fujairah on the Gulf of Oman — beyond the Strait of Hormuz — by a pipeline capable of carrying 1.5 million barrels a day. The pipeline has attracted Iran’s attentions before. In 2019, four oil tankers, two each belonging to Saudi Arabia and the UAE, were attacked off the port of Fujairah.

Iran has never fully closed the Strait of Hormuz but it has threatened to do so multiple times in response to geopolitical tensions.

Historically, it has used the threat of closure as a strategic bargaining tool, particularly during periods of heightened conflict. In 2012, for instance, it threatened to block the strait in retaliation for US and European sanctions but did not follow through.

Naturally, disruptions in supplies would cause an enormous increase in energy price and related costs such as insurance and shipping. This would indirectly impact inflation and prices worldwide from the US to Japan.

According to the experts, Iran can employ unmanned drones, such as the Shahed series, to target specific shipping routes or infrastructure in the strait. It may also attempt to use naval vessels to physically obstruct passage through the strait.

Ironically, the one country in the region that would face no direct consequences from a blockade of the Strait of Hormuz is Israel. All of its estimated consumption of 220,000 barrels of crude a day comes via the Mediterranean, from countries including Azerbaijan (exported via the Baku–Tbilisi–Ceyhan pipeline, which runs through Turkiye to the eastern Mediterranean), the US, Brazil, Gabon and Nigeria.

The capability to disrupt traffic in the Strait of Hormuz is one thing, a full closure is quite another, as it would harm Iran’s own economy given that it relies on the waterway for its oil exports.

History teaches that shutting off the flow of oil from the Arabian Gulf is far easier said than achieved. The first country to attempt to prevent oil exports from the Gulf was Britain, which in 1951 blockaded exports from the Abadan refinery at the head of the Gulf in response to the Iranian government’s decision to nationalize the country’s oil industry.

The motive was purely financial. In 1933 Britain, in the shape of the Anglo-Iranian Oil Co., a forerunner of today’s BP, had won a lopsided oil concession from the Iranian government and was reluctant to give it up.

The blockade did not last — impoverished post-war Britain needed Abadan’s oil as badly as Iran — but the consequences of Britain’s actions are arguably still being felt today.

The very existence of the current Iranian regime is a consequence of the 1953 coup jointly engineered by Britain and the US, which overthrew then Prime Minister Mohammad Mossadegh, architect of the oil nationalization plan, and set Iran on the path to the Islamic Revolution of 1979.

The first modern blockade of oil shipments in the Gulf happened the following year, when Saddam Hussein, hoping to take advantage of the disruption caused by the revolution and the ousting of the shah, attacked Iran, triggering the disastrous eight-year Iran-Iraq War.

Still equipped with the shah’s US-supplied and trained air force and navy, Iran’s first reaction was successfully to blockade Iraqi warships and oil tankers in Umm Qasr, Iraq’s only deep-water seaport.

Iraqi aircraft began attacking Iranian shipping in the Gulf, provoking an Iranian response that focused initially on neutral ships bringing supplies to Iraq via Kuwait, a development that soon escalated into attacks by both sides on shipping of all flags.

The first tanker to be hit was a Turkish ship bombed by Iraqi aircraft on May 30, 1982, while loading at Iran’s Kharg Island oil terminal. The first to be declared a total loss was a Greek tanker, struck by an Iraqi Exocet missile on Dec. 18, 1982.

In terms of lives lost and ships damaged or destroyed, the so-called Tanker War was an extremely costly episode, which caused a temporary sharp rise in oil prices. By the time it ended in 1987, more than 450 ships from 15 countries had been attacked, two-thirds of them by Iraq, and 400 crew members of many nationalities had been killed.

Among the dead were 37 American sailors. On May 17, 1987, American frigate the USS Stark, patrolling in the Gulf midway between Qatar and the Iranian coast, was hit by two Exocet missiles fired by an Iraqi Mirage jet.

But at no point throughout the Tanker War was the flow of oil out through the Strait of Hormuz seriously disrupted.

“Iran couldn’t fully close the strait even in the 1980s,” said Sir John Jenkins, former UK ambassador to Saudi Arabia and Iraq.

“It’s true that in those days the UK and others had a significant mine-sweeping capacity, which we lack today. But even if Iran laid mines again or interfered with shipping in the strait in other ways it will almost certainly draw in US maritime forces from the 5th Fleet (based in Bahrain) and perhaps air assets too.

“Also, attempting to close Hormuz will hit their own significant illegal oil trade.”

Regardless, the Iranians “will be very tempted to do this. But it is a delicate calculation — doing enough to get Russia and in particular China involved in support of de-escalation but not enough to provoke US action, effectively on the side of Israel,” Jenkins said.

In an analysis published in February last year, following an uptick in maritime aggression by Iran in and around the Strait of Hormuz, the Center for Security Policy, a Washington think tank, concluded that because 76 percent of the crude oil that passes through it is destined for Asian markets, “as one of Tehran’s sole remaining allies, it would not be in China’s best interest for the strait to fully close.”

Lessons learned during the 1980s Tanker War are relevant today. In the wake of that conflict, an analysis by the Strauss Center for International Security and Law offered a cool-headed assessment of the vulnerability of the Strait of Hormuz to any attempt at enforced closure by Iran.

“Our research and analysis reveals significant limits to Iran’s ability to materially reduce the flow of oil through the Strait of Hormuz for a sustained period of time,” the report, published in 2008, said.

“We find that a large-scale Iranian campaign would yield about a 5 percent chance of stopping each tanker’s transit with small boat suicide attacks and a roughly 12 percent chance of stopping each tanker’s transit with volleys of anti-ship cruise missiles.”

Initially, the Tanker War led to a 25 percent drop in commercial shipping and a temporary sharp rise in insurance premiums and the price of crude oil.

“But the Tanker War did not significantly disrupt oil shipments … Even at its most intense point, it failed to disrupt more than 2 percent of ships passing through the Gulf,” the report said.

The bottom line, it said, “is that if a disruption to oil flows were to occur, the world oil market retains built in mechanisms to assuage initial effects. And since the long-term disruption of the strait, according to our campaign analysis, is highly improbable, assuaging initial effects might be all we need.

“Panic, therefore, is unnecessary.”

Israel’s critics say it already has much to answer for in unleashing its unilateral assault on Iran. Netanyahu has been claiming for years that Iran was “only months away” from producing a nuclear weapon and his claim that that is the case now has no more credibility than before.

“Benjamin Netanyahu has started a war with Iran that has no justification,” said Justin Logan, director of defense and foreign policy at Washington think tank the Cato Institute.

Friday’s opening attacks overtook US President Donald Trump’s statement earlier that same day that “the United States is committed to a diplomatic resolution to the Iran nuclear issue.”

“Iran was not on the precipice of acquiring nuclear weapons,” Logan said. “It had not thrown out IAEA inspectors, from whom all information about the Iran nuclear program flowed. It had not enriched uranium to weapons-grade.”

Netanyahu’s true motives in launching his attack at this time are not hard for political observers to divine.

He has successfully derailed US-Iranian nuclear talks — ongoing negotiations, due to have been continued on Sunday in Oman, were canceled.

The attack has also caused the postponement of the three-day joint Saudi-French Gaza peace summit at the UN, which had been due to begin on Tuesday, with the issue of Palestinian sovereignty high on the agenda — anathema to Netanyahu’s right-wing, anti-two-state government.

“Israel has the right to choose its own foreign policy,” Logan said.

But “at the same time, it has the responsibility to bear the costs of that policy.”
 

 


Former Israeli PM Ehud Barak: Only full-scale war or new deal can stop Iran’s nuclear program

Updated 15 June 2025
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Former Israeli PM Ehud Barak: Only full-scale war or new deal can stop Iran’s nuclear program

  • Speaking to CNN’s Christiane Amanpour, Barak said Israel’s ability to hold back Tehran’s program was limited
  • Barak said that while military strikes were “problematic,” Israel viewed the action as justified

LONDON: Former Israeli Prime Minister Ehud Barak has warned that military action by Israel alone will not be enough to significantly delay Iran’s nuclear ambitions, describing the Islamic republic as a “threshold nuclear power.”

Speaking to CNN’s Christiane Amanpour, Barak said that Israel’s ability to hold back Tehran’s program was limited.

“In my judgment, it’s not a secret that Israel alone cannot delay the nuclear program of Iran by a significant time period. Probably several weeks, probably a month, but even the US cannot delay them by more than a few months,” he said.

“It doesn’t mean that immediately they will have (a nuclear weapon), probably they still have to complete certain weaponization, or probably create a crude nuclear device to explode it somewhere in the desert to show the whole world where they are.”

Barak said that while military strikes were “problematic,” Israel viewed the action as justified.

“Instead of sitting idle, Israel feels that they have to do something. Probably together with the Americans we can do more.”

The former premier said that stopping Iran’s progress would require either a major diplomatic breakthrough or a regime change.

“My judgment is that because Iran is already what’s called a threshold nuclear power, the only way to block it is either to impose upon it a convincing new agreement or alternatively a full-scale war to topple down the regime,” he said.

“That’s something that together with the United States we can do.”

But he said he did not believe Washington had the appetite for such a move.

“I don’t believe that any American president, neither Trump or any one of his predecessors, would have decided to do that.”

Israel unleashed airstrikes across Iran for a third day on Sunday and threatened even greater force as some Iranian missiles fired in retaliation evaded Israeli air defenses to strike buildings in the heart of the country.

Israeli emergency services said at least 10 people had been killed in the Iranian attacks, while officials in Iran said that at least 128 people had been killed by Israel’s salvos.


Qatari foreign minister discusses Iran-Israel strikes in calls with UAE, UK counterparts

Updated 15 June 2025
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Qatari foreign minister discusses Iran-Israel strikes in calls with UAE, UK counterparts

  • Minister’s message confirms Doha’s condemnation of the Israeli attack
  • Qatar collaborating with partners to promote dialogue in pursuit of a diplomatic solution

LONDON: Sheikh Mohammed bin Abdulrahman bin Jassim Al-Thani, Qatar’s foreign minister, spoke with his Emirati and British counterparts in separate calls on Sunday to address the escalating hostilities between Israel and Iran.

Sheikh Mohammed and his UAE counterpart, Sheikh Abdullah bin Zayed Al-Nahyan, discussed the Israeli attack on Iran, which began on Friday morning.

The Qatari foreign minister reiterated Doha’s condemnation of the Israeli attack, which violates Iran’s sovereignty and security and is a clear violation of the principles of international law, the Qatar News Agency reported.

Sheikh Mohammed had a separate conversation on Sunday with UK Minister of Foreign Affairs David Lammy. During this call, he said that the ongoing Israeli violations and attacks in the region are undermining peace efforts and could lead to a broader regional conflict, the QNA added.

He emphasized the need for diplomatic efforts, saying that Qatar is collaborating with partners to promote dialogue and enhance security and peace in the region and worldwide.


Turkish president discusses Israel-Iran strikes with Oman’s sultan, Kuwait’s emir

Updated 15 June 2025
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Turkish president discusses Israel-Iran strikes with Oman’s sultan, Kuwait’s emir

  • Leaders stress importance of de-escalation, halting aggression, resolving differences through diplomatic means

LONDON: Turkish President Recep Tayyip Erdogan discussed developments in the Middle East during separate phone calls on Sunday with the Sultan of Oman Haitham bin Tariq, and the Emir of Kuwait Sheikh Meshal Al-Ahmad Al-Jaber Al-Sabah.

Erdogan discussed with the Omani sultan the Israeli strikes against Iran, which began on Friday morning, and their “worrying repercussions” for the region, the Oman News Agency reported.

The parties stressed the importance of dialogue and diplomacy and a return to the negotiating table to settle conflicts and prevent the escalation of crises in the region.

The ONA reported that they exchanged views on maintaining security and stability in accordance with international law.

Erdogan and the Emir of Kuwait Sheikh Meshal also discussed the rapid developments in the Middle East and the conflict between “the friendly Islamic Republic of Iran and the brutal Israeli entity,” the Kuwait News Agency reported.

In addition, both leaders renewed their condemnation of the ongoing Israeli strikes in the Gaza Strip, where at least 54,000 Palestinians have been killed since late 2023. They emphasized the importance of de-escalating tensions, halting aggression, and resolving differences through diplomatic means in the region, the KUNA added.


MP calls out lack of bomb shelters in Arab-Israeli communities

Updated 15 June 2025
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MP calls out lack of bomb shelters in Arab-Israeli communities

JERUSALEM: Ayman Odeh, an Israeli member of parliament of Palestinian descent, accused the government on Sunday of failing to provide Arab-Israeli communities with enough shelters after an Iranian missile killed four people in the city of Tamra.

“The state, unfortunately, still distinguishes between blood and blood,” Odeh lamented on X, after touring the city of 37,000 predominantly Arab residents.

A house there was destroyed by a missile launched by Iran overnight in response to Israel’s unprecedented attacks on the Islamic republic’s military and nuclear sites.

“Four civilians were killed yesterday: Manar Al-Qassem Abu Al-Hija Khatib (39), her two daughters Hala (13) and Shada (20), and their relative Manar Diab Khatib (41),” Odeh said, adding that “dozens more” were wounded

Cars and buildings were also damaged by the strike on the community in the Israeli region of Galilee, an AFP journalist at the scene reported.

“Tamra is not a village. It is a city without public shelters,” Odeh said, adding that this was the case for 60 percent of “local authorities” — the Israeli term for communities not officially registered as cities, many of which are Arab-Israeli.

Arab-Israelis are Palestinians who remained in what is now Israel after its creation in 1948, and represent about 20 percent of the country’s population.

The community frequently professes to face discrimination from Israel’s Jewish majority.

With Israel and Iran engaged in their most intense confrontation ever, Odeh, a communist MP for over 10 years, warned of “a threat of unprecedented destruction (that) will not distinguish” between Arabs and Jews.

He also accused the government of “neglect” toward citizens of Palestinian descent.

A video shared on social media Sunday night caused outrage after showing families apparently rejoicing in Hebrew as missiles fell on Tamra.

In some Arab neighborhoods, missiles launched toward Israel have also been welcomed with joy, AFP journalists reported.