Asia evades the US mousetrap

Washington’s attempts to squeeze Iran into submission, via its sanctions, haven’t exactly transpired the way the US think-tanks thought they would pan out with Asian oil importing heavyweights, Japan and South Korea, brushing off the US policy making. And the word is that India and China might even up their oil purchases from Iran, to further forestall the US efforts of forcing Iran into parting ways with its nuclear programme by targeting its economic nerve center. These four aforementioned countries combined for 60 per cent of Iranian oil sales last year, and the US is relentlessly trying to convince them into opting out of these imports and in turn give Tehran a $100 billion economic jolt – which would surely be the final nail in the coffin of Iranian resistance. All the same, all American endeavours are being parried away, as Washington receives a reality check that nations would rather act in synchrony with their national needs than aid the US policies that could hinder their own economic growth.
With the EU in Washington’s pocket, the EU embargo – scheduled to kick in July – was always going to be a foregone conclusion, and this would result in some losses for Iran. But what it would also do is force Iran into lowering the oil prices for the Asian buyers, and this would be a tailor-made opportunity for these nations, who would then be able to lower their oil purchase expenditure considerably. The ramifications on the Iranian budget would still be considerable, but it would be hard to convince the Asian countries to eschew purchasing oil at a considerably cheaper rate.
South Korea – evidently the closest of US’s Asian allies – is the one targeted by the American hierarchy to turn the tide in Washington’s favour. Seoul imports 10 per cent of Iranian oil, and being an American chum historically, it would be the easiest one to influence into cutting down on the imports from Iran. Nevertheless, with a complete dearth of similar alternatives for black gold, Seoul is refusing to take the bait for the time being. Japan, again, imports 10 per cent of its crude oil from Iran, and are warding off US approaches citing the insufficiency of oil availability from other Middle Eastern countries.
China, meanwhile, increasingly becoming a close Iranian ally, completely turned its back on the efforts of American Treasury Secretary Timothy Geithner during a January visit, and labeled the Western efforts as being detrimental to global economy. China and the US of course have no love lost between each other and, averaging about 550,000 barrels per day in 2011, Beijing imported around 10 per cent of its oil from Iran. And with the oil prices scheduled to take a nosedive, it’s going to be a mouth watering prospect for the Chinese to further enhance themselves, while the Americans continue to pursue their geopolitical dogfights. It is evident that China wants to build a strategic reserve of crude oil and with Iranians under the US’s cosh, it has the upper hand on the negotiation table with Tehran as well. India has recently been upping the ante with regards to oil purchase from Iran, raising it as high as 550,000 barrels per day in January. And with New Delhi perceiving it as a stern competitor for influence in the region – both economic and otherwise – it would be hard to imagine the Indians letting go of their oil import from Iran – especially again, since it is going to be available at cut-price. Furthermore, a lot of Indian refineries are designed specifically with processing Iranian crude oil in mind, and they would find it inconvenient to reshape their dynamics. Hence, the Indian front looks like being continuing to be oblivious to US objections as well.
This leaves the US in a veritable fix, since merely the EU embargo will not suffice in the proverbial arm twisting that Washington is vying to sermon. What seems like happening is that with these four Asian giants paying no heed to the US stance over Iran, the disparity that the EU embargo might create on the Tehran exchequer, would be covered by the transfer of those particular barrels eastwards into Asia.