Iran Sanctions Create Opportunities for Russia and China

This insightful piece published on Bloomberg today takes a look at the unintentional (but surely somewhat predictable) effect of the sanctions recently imposed on Iran: new business opportunities for Russia and China. Experts quoted in the article say the sanctions are hurting European suppliers while paving the way for greater cooperation between Iran, Russia and China.

“These countries have long-term interests in the region,” said Gary Sick, a member of the U.S. National Security Council under Presidents Ford, Carter and Reagan and the principal White House aide for Iran during the 1979-81 hostage crisis. China wants “to maintain relations with Iran for the sake of maintaining some access to the oil,” he said…

…Iranian President Mahmoud Ahmadinejad’s government cut gasoline rations by one-fourth on June 22 and may reduce fuel subsidies. The country, which has the second-biggest reserves of oil and gas, said in July it may stop exporting naphtha and use the petrochemical as a blending agent to increase gasoline production. National airline Iran Air was forced to redirect jetliners “for a period of time” when BP Plc refused to refuel them last month, Chairman Farhad Parvaresh said on July 28.

That’s giving China and Russia opportunities. Even before Iran’s Mir-Kazemi arrived in Beijing last week, his deputy, Alireza Zeighami, was meeting Chinese officials to press for investment in refineries in the Persian Gulf country, the Oil Ministry’s Shana news agency reported. The two sides committed in the talks to expand their cooperation, and Chinese Vice Premier Li Keqiang said afterward that China is “Iran’s main economic partner,” Press TV reported on Aug. 7, citing official China Central Television.

Russian companies are discussing “serious deliveries” toIran in late August or September, Rajab Safarov, head of the IranCommission of the Moscow Chamber of Commerce and Industry, said July29…

…”It’s boom time for Russian and Chinese oil traders,” said MichaelSwangard, a London-based international trade lawyer at Clyde & Co.,which counts BP and Lloyds of London among its clients. It’s”practically impossible” for Europeans to buy Iran’s oil or sell itgasoline, he said.