Obama loser of Iran sanctions not Tehran: US expert

By Press-TV

An American economic expert says the US President Barack Obama is the main loser of the Iran oil sanctions as Tehran is benefitting from soaring global crude prices as a result of the embargos.

In an article published by Oil Price website, Professor Juan Cole said Iran’s threat to cut oil exports to European countries has already increased global oil prices, making up for any export loss that Tehran may have suffered as a result of sanctions.

“While Iran is producing about 500,000 barrels a day less today than what was typical for it in recent years, the [oil] price has risen over 20 percent in recent months,” he added.

The professor said, “If Iran made USD 250 million a day on petroleum exports of 2.5 million barrels a day at USD 100 a barrel, and if the exports have fallen to 2 million barrels a day, the crude price has risen to USD 124 per barrel and the [country’s overall oil] income is not that much reduced.”

Cole stated that even some reduction in Iran’s oil sales to China is temporary because major Asian importers of Iranian crude are negotiating a price reduction.

“Some of Iran’s problems will come from tanker companies being unable to secure insurance if they carry Iranian petroleum. This obstacle, however, is likely to be overcome by trucking gasoline through Asia and by building overland pipelines to Pakistan, India and China,” the article said.

According to Cole, Pakistan is already openly defying US sanctions on Iran’s energy sector. “Petroleum is fungible, and once it leaves Iran, it is hard to see how it can be sanctioned,” he added.

The expert also refuted recent claims by some Arab countries about being able to replace the Iranian crude in the market, adding, “That production by countries like Iraq could increase fast enough to offset strong Asian demand and bring down the price substantially seems to me unlikely in the short run.”

On December 31, 2011, Washington imposed a new round of tough sanctions on Iran’s financial and energy sectors seeking to penalize other countries for importing Iranian crude or doing business with its central bank.

The EU followed suit by imposing similar sanctions on January 23, banning member states from importing crude oil from Iran or dealing with the country’s central bank.

Reacting to the EU oil ban, the Islamic Republic announced on February 15 that it would halt oil exports to six European countries, including the Netherlands, Spain, Italy, France, Greece and Portugal.

Following the announcement, global oil prices took an upturn with Brent crude oil futures for April rising to USD 124.48 a barrel.