Iranian Students Storm UK Embassy

As embarrassing as the time a few years ago when the Iranian ship picked up the British boarding team in the North Arabian Gulf (wonder why we don't call it Persian Gulf?
 
As embarrassing as the time a few years ago when the Iranian ship picked up the British boarding team in the North Arabian Gulf (wonder why we don't call it Persian Gulf?

And, as I recall, held them in captivity for two weeks while accusing them of spying. Nice folks these Iranians. Can you imagine them them with nukes?

If they Brits did nothing then, I tend to doubt that they will do anything about the invasion of their embassy now (other than yell about how outrageous it is).
 
Make no mistake about it, this was not a student-led demonstration. I'm thinking the riot was planned and supported by the Iranian government
 
Of course, that's always what we did...

Didn't the UK and France cut off oil exports too?
 
Of course, that's always what we did...

Didn't the UK and France cut off oil exports too?

What would hurt would be to cut off the central bank of Iran from international banking. Brits didn't do that and neither did we. An embassy is the sovereign soil of that country. Invading it is legally akin to invading London. why anyone is tolerating this is difficult to understand. Does anyone really suppose that this regime is going to change its behavior?
 
What would hurt would be to cut off the central bank of Iran from international banking. Brits didn't do that and neither did we. An embassy is the sovereign soil of that country. Invading it is legally akin to invading London. why anyone is tolerating this is difficult to understand. Does anyone really suppose that this regime is going to change its behavior?

I believe current US leadership believes if you ask really REALLY nicely, they'll be nice too.... :rolleyes:
 
I believe current US leadership believes if you ask really REALLY nicely, they'll be nice too.... :rolleyes:

LITS, we have be careful with Iran. Wrong move on our part, and then the oil markets get spooked and the price of oil spikes. This would have the effect of damaging the U.S. while enriching Iran.

I'm not worried about our ability to act decisively if the time is right and circumstances warrant. We have a very good track record in that regard. But that comes at a cost as well, as you know.
 
LITS, we have be careful with Iran. Wrong move on our part, and then the oil markets get spooked and the price of oil spikes. This would have the effect of damaging the U.S. while enriching Iran.

I'm not worried about our ability to act decisively if the time is right and circumstances warrant. We have a very good track record in that regard. But that comes at a cost as well, as you know.

patentesq. Wise words. I am likewise confident of our ability to act. I wish I was equally sanguine about our *will* to act decisively. A plot to kill the Saudi diplomat on US soil is way outside the bounds. Taking over the British Embassy is an act of war. Not even the Russians at the height of the Cold War thought to do or be linked to something like that. I am reminded of an incident in Leb. years ago when some fanatics caught and then killed an America CIA agent. Then they did the same thing to a Soviet agent. Soon thereafter the decapitated head of one of the fanatics' ranking people was delivered to their doorstep. No more Soviet agents were ever captured after that. These Iranians don't appear to play by any rules.
 
Seems like another regime change in the middle east, this one led by the Brits.
 
It appears that the US government has been closely following this thread and is now poised to follow pennak's advice: http://www.cnbc.com/id/45806878

Why Sanctions Against Iran Might Sting More This Time


Published: Wednesday, 28 Dec 2011 | 2:33 PM ET

By: Patti Domm
CNBC Executive News Editor

Pending sanctions against Iran are designed to cause swifter economic pain than past penalties, and Iran is ramping up rhetoric in response.

straight-of-hormuz-map-200.jpg

That could keep the pressure on oil prices, but analysts do not expect to see Nymex crude surge much above $100 a barrel, in a sustained way, unless there are further developments to threaten world oil supplies.
New U.S. sanctions, approved by Congress, await President Obama’s signature and would for the first time target the Iranian central bank. At the same time, European officials are discussing a ban on imports of Iranian oil, which is about of third of what Iran exports.
The new sanctions come after a recent International Atomic Energy Agency report suggested that Iran’s nuclear program was military in nature, a claim denied by Iran.

Iran’s first vice president, Mohammad-Reza Rahimi Tuesday warned that Iran would retaliate against any crackdown by blocking all oil shipments through the Strait of Hormuz, a critical waterway for transporting nearly 20 percent of world oil supply.
That comment helped drive up Nymex crude by about 1.5 percent to over $101 Tuesday. Iran produces an estimated 3.6 million barrels of oil per day, about 4 percent of the world’s production, and exports about 2.1 to 2.3 million, according to IHS CERA.
Oil on Wednesday gave up Tuesday’s gains, falling below $100, even as Iran’s top naval commander also spoke to the the threat. “Closing the Strait of Hormuz for Iran’s armed forces is really easy…or as Iranians say it will be easier than drinking a glass of water,” said Habibaollah Sayyari in a comment on Iran’s English language Press TV. “But right now, we don’t need to shut it as we have the Sea of Oman under control, and we can control the transit.”
Rand Corp Iran analyst Alirez Nader said on CNBC's "Squawk on the Street,” that the threats should be taken seriously but within the context of what Iran might really do.

“If Iran closes down the Strait, and I don’t think they can really close down the Strait, they can impede traffic. This will hurt Iran’s economy as much as anybody else. They rely on oil revenues for the government budget—40 to 80 percent. So, if Iran takes military action, this could be devastating for the Iranian government as well,” he said.
Nader stressed that neither the U.S. nor Iran wants military action, but Iran is using its threats in an effort to prevent an oil embargo. The U.S. Fifth Fleet Wednesday said it would not allow any disruption of traffic in the Strait, in response to the Iranian comments. “Anyone who threatens to disrupt freedom of navigation in an international strait is clearly outside the community of nations; any disruption will not be tolerated,” a spokesperson for the Fleet said.
Western governments are balancing how the use of sanctions might hurt the Iranian economy against how they may drive up the price of oil, hurting the global economy. Unlike past penalties, these new sanctions take aim directly at Iran’s ability to export the oil it produces at a full market price, rather than its production.

“I think in particular on the Central Bank of Iran that the U.S. will enact something before the end of the year that will make it very difficult for European refineries, Japanese refineries and Korean refiners to process payments” with Iran.

The degree of the impact will depend on what extent countries comply with the sanctions. “I think in particular on the Central Bank of Iran that the U.S. will enact something before the end of the year that will make it very difficult for European refineries, Japanese refineries and Korean refiners to process payments” with Iran, said Trevor Houser, director of energy and climate practice at the Rhodium Group.
“You have in the case of Europe, Korea and Japan, private banks that facilitate trade between refineries and Iran,” he said, adding those banks would not want to be barred from doing business with the U.S. financial system.
“I think it will be much more successful in disrupting Iranian crude exports than any sanctions to date have been. It’s still unclear what the impact would be on Iranian government revenues,” Houser said, adding that a ball park estimate is that there could be a reduction in Iranian government revenues of 20 to 30 percent.
Should Europe cut off its imports, that puts more than 800,000 barrels a day of Iranian oil back into the market. With Japan and Korea out of the market, China and India may be the likely buyers but demand a steep discount.
China is Iran’s biggest customer, purchasing more than 500,000 barrels per day, and it is expected that China would try to wrangle a cheaper price with more Iranian oil on the market. In mid-December, China’s Sinopec was reported to still be arguing with Iran over the price and amount of oil it would import in 2012.
“The trick is you have to do it [sanctions] in a way that doesn’t spook the market because doing so increases [Iranian] government revenues,” said Houser. “You actually have to keep Iranian supply on line and just redirect it to other buyers and do so in a way that would reduce the price Iran would get for its oil.”
Houser said past sanctions, aimed at Iran’s upstream operations, have taken a toll. At its peak, he said Iran produced 4 million barrels per day of oil, which fell to 3.6 million barrels and could go to 3 million barrels, according to the Internatoinal Energy Agency.
“I would expect to see a reaction from the Iranians when the president signs the sanctions bill into law. The move after that will be European decision on an embargo,” said Houser. There is also flexibility in the bill allowing for implementation of sanctions, based on input from the Department of Energy on the oil market.
A wild card is Israel and whether it would take action against Iran as it did in 1981 when it bombed a Iraqi nuclear reactor outside Baghdad.
The European position is also still unclear, as an embargo could impact already struggling economies there. Italy is the biggest European user of Iranian oil, importing an estimated 183,000 barrels a day.
Japan and India the biggest importers after China, each importing more than 300,000 barrels a day.
Follow Patti Domm on Twitter: @pattidomm
 
It appears that the US government has been closely following this thread and is now poised to follow pennak's advice: http://www.cnbc.com/id/45806878

Finally! :biggrin: I know that the Saudis have committed to making up any difference to the extent that Iranian oil is taken off the market. And, of course, if the Iranians try to close the Strait again, we may well see Praying Mantis II
http://en.wikipedia.org/wiki/Operation_Praying_Mantis

Hold on to your belt, this could be a wild ride.
 
Well I sure hope that it doesn't come to having to keep the straights open over Iranian opposition. That will be long, tedious and I think that the risk of spooking the markets is an understatement, and that will certainly put a damper on the US economy just as it seems like it is undergoing a small but sustained recovery.

While the Iranians by any logical thought pattern will be more harmed than the West by an action to close the straights and therefore will refrain from doing anything crazy, but I am fairly certain that they don't look at much using a logical Western thought process, so they are truly a loose cannon.
 
Well I sure hope that it doesn't come to having to keep the straights open over Iranian opposition. That will be long, tedious and I think that the risk of spooking the markets is an understatement, and that will certainly put a damper on the US economy just as it seems like it is undergoing a small but sustained recovery.

While the Iranians by any logical thought pattern will be more harmed than the West by an action to close the straights and therefore will refrain from doing anything crazy, but I am fairly certain that they don't look at much using a logical Western thought process, so they are truly a loose cannon.

Bruno, I hope rationality prevails in Tehran as well. I am not optimistic that the Iranian Rev. Guards and their upper political leadership is all that rational, at least as judged from our premises. Putting a hit contract on a Saudi diplomat is not a rational act from our prospective but they still did it. Still, cutting off their central bank will really hurt their ability to sell oil and to conduct commerce in other items. Inflation in Iran is already running over 10% and this will create shortages that will push that up, perhaps quite dramatically. Iran has a recent history of inflation problems. http://www.indexmundi.com/iran/inflation_rate_(consumer_prices).html

Moreover, the price if common commodities in Iran, including gas, is subsidized by the government in an effort to buy legitimacy from the population. Cutting their income from oil will make that much more difficult. Still, they are committed to nuclear weapons and I don't think that there is much chance that they will abandon that pursuit no matter how much pain is inflicted on their economy. This situation could get much more dangerous this coming year.
 
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