Russia makes 1st nuke shipment to Iran

Although Russia's nuke shipment to Iran is "strictly for civilian purposes" any type of nuke shipment to Iran will surly add to the instability of the region. Just a few days ago Israel said the U.S. Report on Iran may spark war.

JERUSALEM - Israel's public security minister warned Saturday that a U.S.
intelligence report that said Iran is no longer developing nuclear arms could
lead to a regional war that would threaten the Jewish state. Source HERE

This should continue to add support to record oil prices and increase the growing friction between Russia and the United States.

Harry


Russia makes 1st nuke shipment to Iran

By JIM HEINTZ, Associated Press Writer 17 minutes ago

MOSCOW - Russia has made its first shipment of nuclear fuel to Iran's Bushehr plant, which is at the center of the international tensions over Tehran's nuclear program, the Foreign Ministry said Monday.


Iran contends the nuclear power plant operation in Bushehr is strictly for civilian purposes, but many critics suspect Tehran intends to use the plant as part of an alleged effort to develop nuclear weapons.

Construction at Bushehr had been frequently delayed. Officials said the delays were due to payment disputes, but many observers suggested Russia also was unhappy with Iran's resistance to international pressure to make its nuclear program more open and to assure the international community that it was not developing nuclear arms.

"All fuel that will be delivered will be under the control and guarantees of the International Atomic Energy Agency for the whole time it stays on Iranian territory," the Foreign Ministry said in a statement. "Moreover, the Iranian side gave additional written guarantees that the fuel will be used only for the Bushehr nuclear power plant."

Russia announced last week that its construction disputes with Iran had been resolved and said fuel deliveries would begin about a half year before Bushehr was expected to go into service.

Two weeks ago, a U.S. National Intelligence Estimate report concluded that Iran had halted efforts to develop nuclear weapons in 2003 and that the program had been frozen through at least the middle of this year.

Although Russia has resisted drives to impose sanctions on Iran, it also repeatedly has urged Tehran to cooperate with the Vienna, Austria-based IAEA to resolve concerns over the nuclear program.

Foreign Minister Sergey Lavrov underlined that position last week after a meeting in Moscow with his Iranian counterpart Manouchehr Mottaki.

Lavrov said resolving the controversy is possible "solely on the basis of the nuclear nonproliferation treaty, IAEA rules and principles and, certainly, with Iran proving its right to the peaceful use of nuclear energy."

Officials at Atomstryexport, the Russian contractor for Bushehr, raised the prospect last week of creating a Russian-Iranian joint venture "to ensure security" at the Bushehr plant, according to the RIA-Novosti agency.

That could indicate Russian interest in ensuring that enriched uranium at the plant is not stolen or diverted. Depleted fuel rods also could be reprocessed into plutonium.

Source HERE

Further reading: Russia starts nuclear fuel deliveries to Iran: officials

MOSCOW (AFP) - Russia's Atomstroiexport corporation said Monday it had begun deliveries of nuclear fuel for Iran's first atomic power station at Bushehr.

"On December 16, 2007, Atomstroiexport began delivery of the fuel for the initial installation at the future Bushehr power station," the corporation said in a statement.

The delivery process will take up to two months to complete, Atomostroiexport said.
Russia is close to completing construction of Bushehr, the power station at the heart of Iran's controversial nuclear programme. The station is expected to start generating electricity approximately six months after the first delivery of fuel.

Source HERE

Oil rises on storm and and Turkish Bombing of Kurdish rebels

By Jonathan Leff 2 hours, 48 minutes ago

SINGAPORE (Reuters) - Oil prices rose on Monday following a two-day, $3 slide as a U.S. winter storm and Turkish bombing of Kurdish rebels in northern Iraq countered concerns about a weaker U.S. economy.

U.S. light, sweet crude for January delivery, which expires on Tuesday, rose 52 cents to $91.79 a barrel by 0239 GMT, having lost nearly $1 on Friday and more than $2 the day before.

...

A snowstorm heading into New England lent support to prices, as traders factored in higher household use in the top heating oil consuming region. The storm brought snow, freezing rain and high winds to the U.S. Northeast at the weekend.

...

Turkish warplanes targeting Kurdish rebels bombed northern Iraq on Sunday, while up to 100,000 Turkish troops are near the Iraqi border, threatening a major operation that analysts fear could destabilize the region.

Analysts have said the action is not likely to affect oil shipments through Iraq's northern pipeline to the Turkish coast, which has only operated sporadically since the 2003 war, but fear it could further unsettle the rest of the oil-rich Middle East.

"I think this may be a bullish factor for the market," said Ken Hasegawa of Fimat Japan Inc.

...

"The macro-economic backdrop remains complicated," said Commonwealth Bank of Australia analyst David Moore.

Oil prices have been dragged back from last month's record high $99.29 a barrel by growing concerns about the U.S. economy. A concerted effort last week by global central banks to inject more liquidity into credit markets failed to erase those worries.

Friday's data came amid signs U.S. oil demand growth is being clipped by the wider economic problems stemming from the global credit crunch, prompting OPEC to maintain its forecast for oil demand growth of only 1.3 million barrels per day next year.

...

One fresh supply risk arose at the weekend after an influential rebel commander in Nigeria's oil-producing Niger Delta ordered the suspension of peace talks with the government, although there was no immediate sign of a resumption in the attacks that have crippled output since 2006.

Source HERE

China using "soft power" for Central Asia riches

New 'Great Game' for Central Asia riches

By DOUGLAS BIRCH and MANSUR MIROVALEV, Associated Press Writers 1 hour, 40 minutes ago

KHORGOS, Kazakhstan - The driver of the 18-wheel tractor-trailer from China idling at the Kazakhstan-China border said apples were the cargo he brought to Almaty, Kazakhstan's booming commercial center.


For Kazakhs, there's a tart irony in the shipment.

Almaty's region is where the first apple trees were found and the first apple orchards planted. The city was a center of the Soviet Union's s fruit industry. Its very name means "Father of Apples."

In the past few years, Chinese fruit, vegetables, TV sets, T-shirts and tires have flooded markets along the old Silk Road in former Soviet Central Asia. Each day, all along the Chinese border, hundreds of tractor-trailers rattle west.

These goods are the most visible sign of Beijing's growing power here as China, Russia, the United States and others compete for financial and strategic advantage on the borders of some of the world's most turbulent countries — Iran, Afghanistan and Pakistan.

It's a struggle in which China seems to be gaining the upper hand.

At stake are oil, hydropower sources, strategic metals, pipelines, transit routes and access to markets. The chief prize is energy supplies: China needs them, Russia wants to control their distribution, and Western powers want to ensure they are not monopolized by Moscow or Beijing.

China today is reaching deep into Central Asia to tap oil and gas reserves, using pipelines and investments to challenge Russia's monopoly on gas shipments and to thwart Moscow's hopes of controlling a bigger share of the region's oil.

In recent years, China and Russia have forged a strategic alliance, as part of a group called the Shanghai Cooperation Organization, to squeeze the United States out of Central Asia, after the U.S. established military bases here. They have largely succeeded.

However, friction is developing between the two neighboring giants. And given China's 1.3 billion people and its economic strength, it seems certain that Russia, with its dwindling population and economy based narrowly on energy, will increasingly be on the defensive.

Of course, Russia's two-century presence in region gives it potent advantages in trying to preserve its influence.

But Niklas Swanstrom of Johns Hopkins University's School of Advanced International Studies argues China is succeeding in using "soft power" — judiciously apportioned aid, aggressive diplomacy and massive investment — to shove Russia aside.

"China will be the dominant player over time," he predicts.

Nowhere, perhaps, is China's presence more starkly evident than at Khorgos, straddling the Kazakh-China border.

On the Kazakh side sits a sleepy village, a mosque and arid steppes where shepherds ride horseback. On the Chinese side sprawls a city, its skyline punctuated by two construction cranes, the skeletons of several large buildings and a massive white arch topped by two scarlet Chinese flags.

Talipzhan Suleimanov, a captain in the Kazakh border service in Khorgos, stood outside his ramshackle post and pointed at the gleaming Chinese city across a dry riverbed.

"This looks like the U.S.-Mexican border," he said. "We are the Mexicans, because the Chinese are so much more advanced."

Central Asia — which includes Turkmenistan, Uzbekistan, Tajikistan, Kyrgyzstan and Kazakhstan — was long regarded as the middle of nowhere, caught between Russia, China, Siberia and Afghanistan's Hindu Kush mountains.

The region emerged from isolation about 200 years ago as Russian imperial troops and British spies competed for influence in a rivalry that Rudyard Kipling called "The Great Game."

In today's Great Game, Russia finds itself struggling to shore up its influence through arms sales and energy contracts, dominance of mobile phone and TV networks, and shared language and culture — as well as the Kremlin's pledges of billions in fresh investment.

Above all, Moscow wants to preserve its monopoly on distributing Central Asian gas and its major role in other energy sectors. To this end, President Vladimir Putin proposed at an October regional summit in Tehran that all the Caspian Sea states have a veto on any new pipelines crossing the sea bed — apparently so Moscow can block plans to connect Kazakhstan's and Turkmenistan's rich oil and gas fields to the west, bypassing Russia.

But Moscow's dominance of the region's energy reserves is eroding. Despite Russian pressure, both Kazakhstan and Turkmenistan have welcomed discussion of a trans-Caspian pipeline — and Putin's proposal was met with silence.

Twice in the past two years, Turkmenistan has signed contracts to ship natural gas west through Russian pipelines — only to turn around a month later and, in effect, promise to ship the same gas east to China.

Beijing is playing a subtler game. It is a customer, not a competitor, for Central Asia's hydrocarbons and other natural resources. It is playing offense not defense, buying oil companies and expanding its access to Middle Eastern gas and oil through a network of new highways, railroads and pipelines.

During much of the 20th century, Central Asia was a source of raw materials for Soviet factories and a captive market for shoddy Soviet goods. After the Soviet collapse, Russian goods vanished here, replaced first by merchandise from Turkey and now from China.

While Russia is now drenched in oil wealth, its hopes of restoring many of its industries — and weaning itself from reliance on sky-high oil prices — depend on regaining access to markets like those here.

Russia sees Central Asia as an inheritance from its imperial Czarist and Communist past. For China, with its appetite for raw materials and its awakening as a world power, Central Asia is the Wild West: a land of opportunity, a reservoir of resources and a corridor to the Middle East's oil fields and Europe's wealthy shopping districts.

China has been moving in quietly and steadily since the mid 1990s, when trucks loaded up on scrap iron, steel and copper at derelict Soviet factories and carted the metals back to China for recycling.

In the 1990s, China did relatively little trade with Kazakhstan — Central Asia's economic motor, an oil- and gas-rich nation of 15.2 million larger than Western Europe. But by 2006, China ranked third behind Germany and Russia in Kazakhstan's $35.6 billion export market and second after Russia in the nation's $22 billion import market.

The tiny, mountainous nation of Kyrgyzstan imported almost nothing from its giant neighbor to the East. By 2006, 57 percent of Kyrgyzstan's imports came from China — and only 15 percent from Russia.

In Khorgos, trucks leave China packed and typically return empty. The road to the border bears the scars of this one-way trade. The lane leading away from China is deeply rutted, the one leading back is smoothly paved.

In 2003, Beijing predicted a 30- to 50-fold increase in its trade with Central Asia within a decade.

China's growing clout makes many Central Asians anxious.

"Sometimes, it feels uneasy to be next to such a mighty neighbor," said Anastasiya Zhukova, a 24-year-old ethnic Russian and Kazakh citizen who works as a linguist for Chinese companies.

No one expects China to try to conquer Central Asia by military might. But some fear China may transform these countries into "vassal states" with little power to resist Beijing in conflicts over trade or foreign policy.

After Sept. 11, the United States seemed poised to vastly expand its influence here. But after establishing two military bases, it lost ground. It has been forced to close its base in Uzbekistan, and the other, in Kyrgyzstan, is under pressure.

Experts say the U.S. has retreated partly because of pressure from Russia and China, partly for a lack of interest: some American officials see Central Asia's oil and gas fields as too remote to meet U.S. energy needs.

Washington has alienated the region's authoritarian governments by criticizing human rights abuses. The Iraq war, meanwhile, raised concerns that the U.S. will push regime change to secure oil supplies — a fear the Chinese have exploited.

"China does not pursue a policy of waging wars for energy resources, unlike the United States in Iraq," Dong Xiaoyang, a Chinese diplomat, told a September conference of scholars and diplomats in Almaty.

But China knows much of its future energy supply is here.

The state-owned China National Petroleum Company bought PetroKazakhstan in 2005 for $4.2 billion, then China's biggest foreign acquisition. In July 2006, the CNPC and Kazakhstan's Kazmunaigaz completed a $700 million, 597-mile oil pipeline across Kazakhstan to Alashankou in northwest China.

The pipeline, designed to supply up to 15 per cent of China's oil needs, will serve the major new Chinese refinery in Karamay, to open in 2008. By some estimates, one-sixth of Kazakhstan's oil production will someday be pumped to China.

Turkmenistan in August started building a 4,350-mile natural gas pipeline through Kazakhstan to northwest China. When completed in 2009, the pipeline is expected to provide China with 1.1 trillion cubic feet of natural gas a year.

Cheap Chinese goods have turned many poor Central Asians into consumers. But some experts say dependence on Chinese products slows the growth of local industries.

"Our industrial production has been going down for years because of the cheap Chinese goods," said Konstantin Syroezhkin of the Kazakh Center for China Studies. "China is not interested in development of our industries. China has already turned us into an ideal consumer."

Others welcome Chinese investors.

Tajikistan, with a per capita annual gross domestic product of just $1,300, desperately needs investment. Saifullo Safarov, deputy director of the Center for Strategic Research in Tajikistan, said that without Chinese money, his country can't exploit its mineral wealth, locked in what he called "the treasure chest of the Pamir Mountains."

In July, the Chinese Zijin Mining Group bought 75 percent of Tajikistan's Zerafshan Gold Company, once controlled by a British company, and in late September it claimed to have increased the mine's production by 50 percent.

Despite China's economic onslaught, Russia retains enormous influence. Moscow is still the intellectual, economic and business capital for Central Asians, and Russia's capital and other cities draw millions of Central Asian students, merchants and workers.

"Economically, China has conquered all markets, but our mentality remains Soviet and we look at Russia for culture," said Zhukova, the Russian in Kazakhstan whose ancestors helped found Almaty in the 19th century.

Former Prime Minister Almazbek Atambayev of Kyrgyzstan, in an interview with The Associated Press, said the bonds between Russia and the other former Soviet states remain strong. "In many ways, it's like the relation between the United States and Great Britain," he said.

But powerful forces are driving them apart.

All Central Asian nations are promoting their native languages at the expense of Russian, once the lingua franca here. The region used to share Moscow's secular faith in Marxism. Now, Russia is rediscovering its Orthodox Christian roots as Central Asia is gripped by a Muslim revival.

The road from Osh, Kyrgyzstan's second-largest city, to Kyzl-Kyya in the verdant Ferghana Valley, is dotted with the glittering metal domes of new mosques.

Russian popular culture is still entrenched here. But today's Silk Road markets, reborn as warrens of metal shipping containers, sell movies from Hong Kong and American pop music. Radio disc jockeys speak in a polyglot of Russian, English and their native languages.

China so far has filled only part of this vacuum.

Central Asian leaders say that in today's Great Game, the challenge for them is the same as in the past — to benefit from the competition while ensuring none of the players becomes dominant.

"We will retain our independence," said Atambayev, "only if we maintain equally friendly relations with all the countries around us, and not be subdued by one of the powers around us."

Source Here

All of asia is affected, here's a video about Korean "Goose Dads"

The Real Reasons Why Iran is the Next Target

The Real Reasons Why Iran is the Next Target:


The Emerging Euro-denominated International Oil Marker
by William Clark
Oct. 27, 2004

The Iranians are about to commit an "offense" far greater than Saddam Hussein's conversion to the euro of Iraq’s oil exports in the fall of 2000. Numerous articles have revealed Pentagon planning for operations against Iran as early as 2005. While the publicly stated reasons will be over Iran's nuclear ambitions, there are unspoken macroeconomic drivers explaining the Real Reasons regarding the 2nd stage of petrodollar warfare - Iran's upcoming euro-based oil Bourse.

In 2005-2006, The Tehran government has a developed a plan to begin competing with New York's NYMEX and London's IPE with respect to international oil trades - using a euro-denominated international oil-trading mechanism. This means that without some form of US intervention, the euro is going to establish a firm foothold in the international oil trade. Given U.S. debt levels and the stated neoconservative project for U.S. global domination, Tehran's objective constitutes an obvious encroachment on U.S. dollar supremacy in the international oil market

"Of all the enemies to public liberty war is, perhaps, the most to be dreaded because it comprises and develops the germ of every other. War is the parent of armies; from these proceed debts and taxes...known instruments for bringing the many under the domination of the few. . . No nation could preserve its freedom in the midst of continual warfare."

- James Madison, Political Observations, 1795

Madison’s words of wisdom should be carefully considered by the American people and world community. The rapidly deteriorating situation on the ground in Iraq portends an even direr situation for American soldiers and the People of the world community - should the Bush administration pursue their strategy regarding Iran. Current geopolitical tensions between the United States and Iran extend beyond the publicly stated concerns regarding Iran’s nuclear intentions, and likely include a proposed Iranian "petroeuro system" for oil trade. Similar to the Iraq war, upcoming operations against Iran relate to the macroeconomics of the `petrodollar recycling’ and the unpublicized but real challenge to U.S. dollar supremacy from the euro as an alternative oil transaction currency.

It is now obvious the invasion of Iraq had less to do with any threat from Saddam’s long-gone WMD program and certainly less to do to do with fighting International terrorism than it has to do with gaining control over Iraq’s hydrocarbon reserves and in doing so maintaining the U.S. dollar as the monopoly currency for the critical international oil market. Throughout 2004 statements by former administration insiders revealed that the Bush/Cheney administration entered into office with the intention of toppling Saddam Hussein. Indeed, the neoconservative strategy of installing a pro-U.S. government in Baghdad along with multiple U.S. military bases was partly designed to thwart further momentum within OPEC towards a "petroeuro." However, subsequent events show this strategy to be fundamentally flawed, with Iran moving forward towards a petroeuro system for international oil trades, while Russia discusses this option.

Candidly stated, ‘Operation Iraqi Freedom’ was a war designed to install a pro-U.S. puppet in Iraq, establish multiple U.S military bases before the onset of Peak Oil, and to reconvert Iraq back to petrodollars while hoping to thwart further OPEC momentum towards the euro as an alternative oil transaction currency. [1] In 2003 the global community witnessed a combination of petrodollar warfare and oil depletion warfare. The majority of the world’s governments – especially the E.U., Russia and China - were not amused – and neither are the U.S. soldiers who are currently stationed in Iraq.

Indeed, the author’s original pre-war hypothesis was validated shortly after the war in a Financial Times article dated June 5^th, 2003, which confirmed Iraqi oil sales returning to the international markets were once again denominated in US dollars, not euros. Not surprisingly, this detail was never mentioned in the five US major media conglomerates who appear to censor this type of information, but confirmation of this vital fact provides insight into one of the crucial - yet overlooked - rationales for 2003 the Iraq war.

"The tender, for which bids are due by June 10, switches the transaction back to dollars -- the international currency of oil sales - despite the greenback's recent fall in value. Saddam Hussein in 2000 insisted Iraq's oil be sold for euros, a political move, but one that improved Iraq's recent earnings thanks to the rise in the value of the euro against the dollar." [2]

Unfortunately, it has become clear that yet another manufactured war, or some type of ill-advised covert operation is inevitable under President George W. Bush, should he win the 2004 Presidential Election. Numerous news reports over the past several months have revealed that the neoconservatives are quietly - but actively - planning for the second petrodollar war, this time against Iran.

"Deep in the Pentagon, admirals and generals are updating plans for possible U.S. military action in Syria and Iran. The Defense Department unit responsible for military planning for the two troublesome countries is "busier than ever," an administration official says. Some Bush advisers characterize the work as merely an effort to revise routine plans the Pentagon maintains for all contingencies in light of the Iraq war. More skittish bureaucrats say the updates are accompanied by a revived campaign by administration conservatives and neocons for more hard-line U.S. policies toward the countries"…"Even hard-liners acknowledge that given the U.S. military commitment in Iraq, a U.S. attack on either country would be an unlikely last resort; covert action of some kind is the favored route for Washington hard-liners who want regime change in Damascus and Tehran."

"…administration hawks are pinning their hopes on regime change in Tehran - by covert means, preferably, but by force of arms if necessary. Papers on the idea have circulated inside the administration, mostly labeled "draft" or "working draft" to evade congressional subpoena powers and the Freedom of Information Act. Informed sources say the memos echo the administration's abortive Iraq strategy: oust the existing regime, swiftly install a pro-U.S. government in its place (extracting the new regime's promise to renounce any nuclear ambitions) and get out. This daredevil scheme horrifies U.S. military leaders, and there's no evidence that it has won any backers at the cabinet level." [3]

To date, one of the more difficult technical obstacles concerning a euro-based oil transaction trading system is the lack of a euro-denominated oil pricing standard, or oil ‘marker’ as it is referred to in the industry. The three current oil markers are U.S. dollar denominated, which include the West Texas Intermediate crude (WTI), Norway Brent crude, and the UAE Dubai crude. However, since the spring of 2003, Iran has required payments in the euro currency for its European and Asian/ACU exports - although the oil pricing for trades are still denominated in the dollar. [4]

Therefore, a potentially significant news development was reported in June 2004 announcing Iran’s intentions to create of an Iranian oil Bourse. (The word "bourse" refers to a stock exchange for securities trading, and is derived from the French stock exchange in Paris, the Federation Internationale des Bourses de Valeurs.) This announcement portended competition would arise between the Iranian oil bourse and London’s International Petroleum Exchange (IPE), as well as the New York Mercantile Exchange (NYMEX). It should be noted that both the IPE and NYMEX are owned by U.S. corporations.

The macroeconomic implications of a successful Iranian Bourse are noteworthy. Considering that Iran has switched to the euro for its oil payments from E.U. and ACU customers, it would be logical to assume the proposed Iranian Bourse will usher in a fourth crude oil marker – denominated in the euro currency. Such a development would remove the main technical obstacle for a broad-based petroeuro system for international oil trades. From a purely economic and monetary perspective, a petroeuro system is a logical development given that the European Union imports more oil from OPEC producers than does the U.S., and the E.U. accounts for 45% of imports into the Middle East (2002 data).

Acknowledging that many of the oil contracts for Iran and Saudi Arabia are linked to the United Kingdom’s Brent crude marker, the Iranian bourse could create a significant shift in the flow of international commerce into the Middle East. If Iran’s bourse becomes a successful alternative for oil trades, it would challenge the hegemony currently enjoyed by the financial centers in both London (IPE) and New York (NYMEX), a factor not overlooked in the following article:

"Iran is to launch an oil trading market for Middle East and OPEC producers that could threaten the supremacy of London's International Petroleum Exchange."

"…He [Mr. Asemipour] played down the dangers that the new exchange could eventually pose for the IPE or Nymex, saying he hoped they might be able to cooperate in some way."

"…Some industry experts have warned the Iranians and other OPEC producers that western exchanges are controlled by big financial and oil corporations, which have a vested interest in market volatility.

The IPE, bought in 2001 by a consortium that includes BP, Goldman Sachs and Morgan Stanley, was unwilling to discuss the Iranian move yesterday. "We would not have any comment to make on it at this stage," said an IPE spokeswoman. "[5]

It is unclear at the time of writing, if this project will be successful, or could it prompt overt or covert U.S. interventions - thereby signaling the second phase of petrodollar warfare in the Middle East. News articles in June 2004 revealed the discredited neoconservative sycophant Ahmed Chalabi may have revealed his knowledge to Iran regarding U.S. military planning for operations against that nation.

"The reason for the US breakup with Ahmed Chalabi, the Shiite Iraqi politician, could be his leak of Pentagon plans to invade Iran before Christmas 2005, but the American government has not changed its objective, and the attack could happen earlier if president George W. Bush is re-elected, or later if John Kerry is sworn in."

"….Diplomats said Chalabi was alerted to the Pentagon plans and in the process of trying to learn more to tell the Iranians, he invited suspicions of US officials, who subsequently got the Iraqi police to raid the compound of his Iraqi National Congress on 20 May 2004, leading to a final break up of relations."

"While the US is uncertain how much of the attack plans were leaked to Iran, it could change some of the invasion tactics, but the broad parameters would be kept intact." [6]

Regardless of the potential U.S. response to an Iranian petroeuro system, the emergence of an oil exchange market in the Middle East is not entirely surprising given the domestic peaking and decline of oil exports in the U.S. and U.K, in comparison to the remaining oil reserves in Iran, Iraq and Saudi Arabia. According to Mohammad Javad Asemipour, an advisor to Iran’s oil ministry and the individual responsible for this project, this new oil exchange is scheduled to begin oil trading in March 2005.

"Asemipour said the platform should be trading crude, natural gas and petrochemicals by the start of the new Iranian year, which falls on March 21, 2005.

He said other members of the Organization of Petroleum Exporting Countries - Iran is the producer group's second-largest producer behind Saudi Arabia - as well as oil producers from the Caspian region would eventually participate in the exchange." [7]

(Note: the most recent Iranian news report from October 5, 2004 stated: "Iran's oil bourse will start trading by early 2006" which suggests a delay from the original March 21, 2005 target date). [8] Additionally, according to the following report, Saudi investors may be interested in participating in the Iranian oil exchange market, further illustrating why petrodollar hegemony is becoming unsustainable.

"Chris Cook, who previously worked for the IPE and now offers consultancy services to markets through Partnerships Consulting LLP in London, commented: "Post-9/11, there has also been an interest in the project from the Saudis, who weren't interested in participating before."

"Others familiar with Iran's economy said since 9/11, Saudi Arabian investors are opting to invest in Iran rather than traditional western markets as the kingdom's relations with the U.S. have weakened Iran's oil ministry has made no secret of its eagerness to attract much needed foreign investment in its energy sector and broaden its choice of oil buyers."

"…Along with several other members of OPEC, Iranian oil officials believe crude trading on the New York Mercantile Exchange and the IPE is controlled by the oil majors and big financial companies, who benefit from market volatility."[9]

One of the Federal Reserve’s nightmares may begin to unfold in 2005 or 2006, when it appears international buyers will have a choice of buying a barrel of oil for $50 dollars on the NYMEX and IPE - or purchase a barrel of oil for €37 - €40 euros via the Iranian Bourse. This assumes the euro maintains its current 20-25% appreciated value relative to the dollar - and assumes that some sort of "intervention" is not undertaken against Iran. The upcoming bourse will introduce petrodollar versus petroeuro currency hedging, and fundamentally new dynamics to the biggest market in the world - global oil and gas trades

During an important speech in April 2002, Mr. Javad Yarjani, an OPEC executive, described three pivotal events that would facilitate an OPEC transition to euros. [10] He stated this would be based on (1) if and when Norway's Brent crude is re-dominated in euros, (2) if and when the U.K. adopts the euro, and (3) whether or not the euro gains parity valuation relative to the dollar, and the EU’s proposed expansion plans were successful. (Note: Both of the later two criteria have transpired: the euro’s valuation has been above the dollar since late 2002, and the euro-based E.U. enlarged in May 2004 from 12 to 22 countries). In the meantime, the United Kingdom remains uncomfortably juxtaposed between the financial interests of the U.S. banking nexus (New York/Washington) and the E.U. financial centers (Paris/Frankfurt).

The implementation of the proposed Iranian oil Bourse (exchange) in 2005/2006 – if successful in utilizing the euro as its oil transaction currency standard – essentially negates the necessity of the previous two criteria as described by Mr. Yarjani regarding the solidification of a "petroeuro" system for international oil trades. [10] It should also be noted that during 2003-2004 Russia and China have both increased their central bank holdings of the euro currency, which appears to be a coordinated move to facilitate the anticipated ascendance of the euro as a second World Reserve currency. [11] [12] In the meantime, the United Kingdom is uncomfortable juxtaposed between the financial interests of the U.S. (New York/Washington) banking nexus and that of the E.U. financial center (Paris/Frankfurt).

The immediate question for Americans? Will the neoconservatives attempt to intervene covertly and/or overtly in Iran during 2005 in an effort to prevent the formation of a euro-denominated crude oil pricing mechanism? Commentators in India are quite correct in their assessment that a U.S. intervention in Iran is likely to prove disastrous for the United States, making matters much worse regarding international terrorism, not to the mention potential effects on the U.S. economy.

"The giving up on the terror war while Iran invasion plans are drawn up makes no sense, especially since the previous invasion and current occupation of Iraq has further fuelled Al-Qaeda terrorism after 9/11."

"…It is obvious that sucked into Iraq, the US has limited military manpower left to combat the Al-Qaeda elsewhere in the Middle East and South Central Asia,"…"and NATO is so seriously cross with America that it hesitates to provides troops in Iraq, and no other country is willing to bail out America outside its immediate allies like Britain, Italy, Australia and Japan."

"….If it [U.S.] intervenes again, it is absolutely certain it will not be able to improve the situation – Iraq shows America has not the depth or patience to create a new civil society – and will only make matters worse."

"There is a better way, as the constructive engagement of Libya’s Colonel Muammar Gaddafi has shown…."Iran is obviously a more complex case than Libya, because power resides in the clergy, and Iran has not been entirely transparent about its nuclear programme, but the sensible way is to take it gently, and nudge it to moderation. Regime change will only worsen global Islamist terror, and in any case, Saudi Arabia is a fitter case for democratic intervention, if at all." [13]

It is abundantly clear that a 2^nd Bush term will bring a confrontation and possible war with Iran during 2005. Colin Powell as the Secretary of the State, has moderated neoconservative military designs regarding Iran, but Powell has stated that he will be leaving at the end of Bush’s first term. Of course if John Kerry wins in November, he might pursue a similar military strategy. However, it is my opinion that Kerry is more likely to pursue multilateral negotiations regarding the Iranian issues.

Clearly, there are numerous risks regarding neoconservative strategy towards Iran. First, unlike Iraq, Iran has a robust military capability. Secondly, a repeat of any "Shock and Awe" tactics is not advisable given that Iran has installed sophisticated anti-ship missiles on the Island of Abu Musa, and therefore controls the critical Strait of Hormuz. [14] In the case of a U.S. attack, a shut down of the Strait of Hormuz – where all of the Persian Gulf bound oil tankers must pass – could easily trigger a market panic with oil prices skyrocketing to $100 per barrel or more. World oil production is now flat out, and a major interruption would escalate oil prices to a level that would set off a global Depression. Why are the neoconservatives willing to takes such risks? Simply stated - their goal is U.S. global domination.

A successful Iranian bourse would solidify the petroeuro as an alternative oil transaction currency, and thereby end the petrodollar's hegemonic status as the monopoly oil currency. Therefore, a graduated approach is needed to avoid precipitous U.S. economic dislocations. Multilateral compromise with the EU and OPEC regarding oil currency is certainly preferable to an ‘Operation Iranian Freedom,’ or perhaps an attempted CIA-sponsored repeat of the 1953 Iranian coup – operation "Ajax" part II. [15] Indeed, there are very good reasons for U.S. military leaders to be "horrified" at the thought of a second Bush term in which Cheney and the neoconservatives would be unrestrained in their tragic pursuit of U.S. global domination.

"NEWSWEEK has learned that the CIA and DIA have war-gamed the likely consequences of a U.S. pre-emptive strike on Iran's nuclear facilities. No one liked the outcome. As an Air Force source tells it, "The war games were unsuccessful at preventing the conflict from escalating." [16]

Despite the impressive power of the U.S. military and the ability of our intelligence agencies to facilitate "interventions," it would be perilous and possibly ruinous for the U.S to intervene in Iran given the dire situation in Iraq. The Monterey Institute of International Studies provided an extensive analysis of the possible consequences of a preemptive attack on Iran’s nuclear facilities and warned of the following:

"Considering the extensive financial and national policy investment Iran has committed to its nuclear projects, it is almost certain that an attack by Israel or the United States would result in immediate retaliation. A likely scenario includes an immediate Iranian missile counterattack on Israel and U.S. bases in the Gulf, followed by a very serious effort to destabilize Iraq and foment all-out confrontation between the United States and Iraq's Shi'i majority. Iran could also opt to destabilize Saudi Arabia and other Gulf states with a significant Shi'i population, and induce Lebanese Hizbullah to launch a series of rocket attacks on Northern Israel."

"…An attack on Iranian nuclear facilities…could have various adverse effects on U.S. interests in the Middle East and the world. Most important, in the absence of evidence of an Iranian illegal nuclear program, an attack on Iran's nuclear facilities by the U.S. or Israel would be likely to strengthen Iran's international stature and reduce the threat of international sanctions against Iran. Such an event is more likely to embolden and expand Iran's nuclear aspirations and capabilities in the long term"…"one thing is for certain, it would not be just another Osirak. " [17]

Synopsis

Regardless of whatever choice the U.S. electorate makes in the upcoming Presidential Election a military expedition may still go ahead.

This essay was written out of my own patriotic duty in an effort to inform Americans of the challenges that lie ahead. On November 25, 2004, the issues involving Iran's nuclear program will be addressed by the International Atomic Energy Agency (IAEA), and possibly referred to the U.N. Security Council if the results are unsatisfactory. Regardless of the IAEA findings, it appears increasingly likely the U.S. will use the specter of nuclear weapon proliferation as a pretext for an intervention, similar to the fears invoked in the previous WMD campaign regarding Iraq.

Pentagon sources confirm the Bush administration could undertake a desperate military strategy to thwart Iran’s nuclear ambitions while simultaneously attempting to prevent the Iranian oil Bourse from initiating a euro-based system for oil trades. The later would require forced "regime change" and the U.S. occupation of Iran. Obviously this would require a military draft. Objectively speaking, the post-war debacle in Iraq has clearly shown that such Imperial policies will be a catastrophic failure. Alternatively, perhaps a more enlightened U.S. administration could undertake multilateral negotiations with the EU and OPEC regarding a dual oil-currency system, in conjunction with global monetary reform. Either way, U.S. policy makers will soon face two difficult choices: monetary compromise or continued petrodollar warfare.

"I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts."

- Abraham Lincoln

"Whenever the people are well-informed, they can be trusted with their own government. Whenever things get so far wrong as to attract their notice, they may be relied on to set them to rights."

- Thomas Jefferson

Source here.

Dollar dropped in Iran asset move

Dollar dropped in Iran asset move

Iran is to shift its foreign currency reserves from dollar to euro and use the euro for oil deals in response to US-led pressure on its economy.

In a widely expected move, Tehran said it would use the euro for all future commercial transactions overseas.

The US, which accuses Tehran of supporting terrorism and trying to obtain nuclear weapons, has sought to limit the flow of dollars into Iran.

It wants the United Nations Security Council to impose sanctions on Iran.

Dollar squeeze

Analysts said Tehran had been steadily shifting its foreign-held assets out of dollars since 2003 and that Monday's announcement was unlikely to affect the value of the dollar, which has weakened significantly in recent months.

There will be no reliance on dollars Gholam-Hussein Elham, Iranian spokesman

An Iranian spokesman said all its foreign exchange transactions would be conducted in euros and its national budget would also be calculated in euros as well as its own currency.

"There will be no reliance on dollars," said Gholam-Hussein Elham.

"This change is already being made in the currency reserves abroad."

The currency move will apply to oil sales although it is expected that Iran, the world's fourth largest oil producer, will still accept oil payments in dollars.

Nuclear trigger

Washington has sought to exert financial pressure on Iran, which it accuses of flouting international law by trying to acquire nuclear weapons.

Tehran denies this, saying its nuclear research is for purely geared towards civilian uses.

Most international banks have stopped dollar transactions with Iran and some firms have ceased trading with Iran altogether in anticipation of possible future sanctions.

The dollar slipped slightly against the euro in New York trading although analysts said they did not expect the reaction to be too severe.

"It is something they have been saying they are going to do for quite a long time now, so I wouldn't expect any market reaction," said Ian Stannard, an economist with BNP Paribas.

The BBC's Tehran correspondent Frances Harrison said Iranian businessmen were complaining about delays in securing letters of credit and saw current conditions as a prelude to the imposition of sanctions.

Tehran has urged Iranian businesses to open letters of credit in euros in the future.

Source here.

U.S. dollar 'worthless': Iran drops dollar from oil deals

Iran prsident calls the U.S. dollar 'wothless" and drops the dollar from all of Iran's oil deals.

The dollar, already down sharply this past year, now potentially faces one of its greatest threats. Will Iran, the 2nd largest oil producer the Middle East, be just the first to drop to the dollar or will there be others joining the dollar dump? Although Iran has been building up to this for the past few years (and also plan to take it one step beyond...see story here) there has been little mention of this on the mass media. Somthing potential so powerful as to touch, and hurt, every American life, as well send shock waves throughout the world, why is there so little media coverage. Think about it.

Harry


TEHRAN (AFP) — Major crude producer Iran has completely stopped carrying out its oil transactions in dollars, Oil Minister Gholam Hossein Nozari said on Saturday, labelling the greenback an "unreliable" currency.
"At the moment, selling oil in dollars has been completely halted, in line with the policy of selling crude in non-dollar currencies," Nozari was quoted as saying by the ISNA news agency.
"The dollar is an unreliable currency, considering its devaluation and the oil exporters' losses," he added.
The world's fourth largest oil exporter, Iran has massively reduced its dependence on the dollar over the past year in the face of US pressures on its financial system and the fall in the dollar.
Nozari did not specify in which currencies Iran was now being paid. In the past, officials have said most oil income was in euros, with a significant percentage in yen.
Japan, which purchases 20 percent of Iran's crude oil, has recently agreed to pay for the crude oil in yen, officials have said. The UAE dirham has also been mooted as a possible payment currency.
Iran has in the past months been whittling down the proportion of dollars in its oil revenue income. Officials in October said that dollars accounted for only 15 percent of payments and predicted the amount would fall to zero.
However, the oil income is still being booked in dollars.
The United States has in recent months successfully encouraged major European and Asian banks to cut their dealings with Iran in a bid to make the Islamic republic give way on its controversial nuclear programme.
Washington has also blacklisted major Iranian banks for alleged support of terrorism and seeking nuclear weapons, charges denied by Tehran.
Iran has also reduced its dollar assets held in foreign banks and urged OPEC to take collective action to price oil in other currencies such as the euro, instead of the US currency which is used across the world at present.
The fall of the dollar, which has weakened considerably against the euro and other currencies in the past 12 months, has affected the revenues of OPEC members because most of them price and sell their oil exports in the US currency. Source here.