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Shanghai Culls Poultry as H7N9 Spreads, But Relevant US Research Remains Suspended Due to Security Theater

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Partial screen capture of the home page of the Chinese news agency Xinhua (http://www.xinhuanet.com/english/), showing the culling of poultry in Shanghai.

Partial screen capture of the home page of the Chinese news agency Xinhua (http://www.xinhuanet.com/english/), showing the culling of poultry in Shanghai.

Yesterday saw a number of developments in the ongoing story of the emerging H7N9 virus in the Shanghai region of China, as the virus was identified in pigeons being sold at a meat market and the culling of all poultry at that market was initiated. One close associate of an infected person still is being monitored in isolation after developing possible symptoms of the virus and might turn out to be the first case of person to person transfer of the virus. Meanwhile, the CDC already has started work in the US that could lead to a vaccine.

As I pointed out yesterday, key questions to be addressed in understanding how dangerous this virus will be revolve around the issue of how the virus jumps from one host to another and whether it acquires the ability to transfer from one person to another. Sadly, the most directly relevant research in the US on these questions remains suspended due to a cowardly display of security theater by the National Science Advisory Board for Biosecurity. Back in late 2011, I wrote about this board asking two prominent scientific journals to censor work that had been approved for publication. The work eventually was published, but only after a hiatus of about six months. As I pointed out at that time, the fears expressed by NSABB were then shown to be entirely unfounded.

In their report online today on the latest developments in the H7N9 emergence, CNN provided a link at the bottom of their story to this story they published back in January, with the headline “Bird flu research resumes — but not in U.S.” From that report:

 Drama surrounding research on the deadly H5N1 avian flu continues, as 40 scientists urge work on the virus to continue in countries that have established guidelines on the safety and aims of the research. The United States is not among them.

This new correspondence, a letter from researchers published Wednesday in the journals Science and Nature, comes after a “voluntary pause” in the research, which scientists announced in January 2012.

/snip/

In many countries, those objectives have been achieved, according to the letter, and researchers who have permission from their governments to continue this research should do so.

Ah, but the US never misses out on an opportunity to over-play its hand when it comes to security theater, so the work hasn’t restarted here:

But the United States has been unclear about how long it will be before it issues official guidelines for conditions under which H5N1 transmission research can continue, the letter says. As such, laboratories in the United States and facilities abroad that receive U.S. funding should not proceed with their transmission studies.

Back when the NASBB first proposed to censor the work that had been done, I had this to say (emphasis added):

However, in the case of the bird flu version of influenza virus, the basic flu virus is found worldwide and undergoes rapid changes. The fact that flu virus changes rapidly suggests that, as mentioned in the snippet above from ScienceInsider, a version similar [to] that developed in the controversial experiment could even arise naturally. Those who would suppress publication of details on how Fouchier’s group developed the pathogenic virus would prevent responsible researchers repeating the work in order to develop an effective treatment for the virus.  Since the virus could arise naturally, preventing work on a treatment is completely irresponsible.

In the CNN article, we have this from one of the scientists whose work has been put on hold (emphasis added again):

“It’s so easily mutated, so the risk exists in nature already, and not doing the research is really putting us in danger,” Kawaoka said at a press conference Wednesday.

While NSABB was busily subjecting us to needless security theater, nature produced what could be the virus for which scientists were trying to prepare us. They were working with the H5N1 virus to address the very questions of host-jumping and person to person transmission that now lie at the heart of the H7N9 emergence. In the best of all worlds, H7N9 will turn out not spread quickly enough to turn into a deadly pandemic. In that good scenario, H7N9 will serve as a wake-up call to once again free the hands of researchers to carry out work that is vital to understanding deadly bird flu virus outbreaks. The alternative is too terrible to consider. If we see widespread death from H7N9, we will be left to wonder how many of those deaths could have been prevented if this important research had not been suspended.

Wondering Wednesday: Suicide in Singapore, Drone Over Brooklyn, and Telco Tattlers

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Help me get over the hump and clue me in on a few things. I’ve been scratching my head wondering about these topics.

Suicide in Singapore — The recent “suicide” of a U.S. electronics engineer in Singapore looks fishy to me. It looked not-right to Financial Times as well; it appears no other domestic news outlet picked up this case for investigative reporting before FT. The deceased, who’d worked for a government research institute on a project related to Chinese telecom equipment company Huawei, is alleged to have hung himself, but two details about this case set off my hinky meter.

•  Every photo I’ve seen of engineer Shane Todd depicts a happy chap. Sure, depressed folks can hide their emotions, but comparing a photo of his family after his death to photos of him and you’ll see the difference. My gut tells me that if he was truly depressed, he should have looked more like his folks–flat, withdrawn, low affect. Perhaps meds could have messed with his head more than depression itself. But I’m not a psychologist or a pharmacologist, what do I know?

•  Among all the details of the case, it’s said the victim’s face postmortem was white when his body was discovered. This doesn’t strike me as consistent with hanging; there should have been lividity above the ligature. Conveniently, Singapore’s law enforcement cleaned everything up so quickly there was no chance to see the crime scene or the body as found. Law enforcement also snagged the victim’s laptop and all other work-related stored content, save for a hard drive that looked like a speaker. Everything he was working on “disappeared” except for the contents of that drive.

The engineer had been very concerned about technology he was working on and its possible transfer, which included gallium nitride transistors with potential for both commercial and military applications. After poking around for some time on gallium compounds used in various computing, communications and other technology, nothing screams at me as highly sensitive technology that might get someone “suicided.” But…as I went through abstracts, it seems odd there are a substantive number of Chinese researchers working in on GaN-based technologies.

Thought these two points in particular jar my senses, more than just these two points don’t sit well. Read the story at the link above and see for yourself. (Original FT link here.)

What do you make of this case? Suicide or no? Strategic technology or no? Read more →

Why So Surprised? CIA, U.S. Military Knew Chinese Hackers Expected Since 1999

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Cover, Unrestricted Warfare via Wikimedia

Cover, Unrestricted Warfare via Wikimedia

The breathless reporting about the alleged Chinese hacking at The New York Times is truly annoying because of the shock it displays. The surprise any major government or private corporate entity shows at this point about any network-based security breach that appears to originate from China should be treated as propaganda, or a display of gross ignorance.

In 1999, the CIA’s Foreign Broadcast Information Service published a white paper entitled Unrestricted Warfare, written by the PRC’s Col. Qiao Liang and Col. Wang Xiansui. The publication outlined the methodologies a nation-state could deploy as part of an asymmetric war. Further, the same work outlined the U.S.’s weaknesses at that time were it to confront such asymmetric warfare. It did not focus any other nation-state, just the U.S.*

The colonels acknowledged that the U.S.—at the time of the paper—had considered using a range of tools in response to conflicts:

“…There’s no getting around the opinions of the Americans when it comes to discussing what means and methods will be used to fight future wars. This is not simply because the U.S. is the latest lord of the mountain in the world. It is more because the opinions of the Americans on this question really are superior compared to the prevailing opinions among the military people of other nations. The Americans have summed up the four main forms that warfighting will take in the future as: 1) Information warfare; 2) Precision warfare [see Endnote 8]; 3) Joint operations [see Endnote 9]; and 4) Military operations other than war (MOOTW) [see Endnote 10]. This last sentence is a mouthful. From this sentence alone we can see the highly imaginative, and yet highly practical, approach of the Americans, and we can also gain a sound understanding of the warfare of the future as seen through the eyes of the Americans. Aside from joint operations, which evolved from traditional cooperative operations and coordinated operations, and even Air- Land operations, the other three of the four forms of warfighting can all be considered products of new military thinking. General Gordon R. Sullivan, the former Chief of Staff of the U.S. Army, maintained that information warfare will be the basic form of warfighting in future warfare. For this reason, he set up the best digitized force in the U.S. military, and in the world. Moreover, he proposed the concept of precision warfare, based on the perception that “there will be an overall swing towards information processing and stealthy long-range attacks as the main foundations of future warfare.” For the Americans, the advent of new, high-tech weaponry, such as precision-guided weapons, the Global Positioning System (GPS), C4I systems and stealth airplanes, will possibly allow soldiers to dispense with the nightmare of attrition warfare. …”

The rise of military tools like drones for precision-guided stealth attacks was predicted; quite honestly, the PRC’s current cyber warfare could be a pointed response to Gen. Sullivan’s statement about information warfare.

But in acknowledging the U.S.’s future use of MOOTW, the colonels also offered up the most likely approaches in an asymmetric assault or response: trade war, financial war, new terror war in contrast to traditional terror war, ecological war. Of these, they cited a specific example of new terror war entity and attacks: Read more →

Pakistan Signs Gwadar Port Over to China Despite Rohrabacher’s Meddling

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Detail of CIA Pakistan transportation map showing region around Gwadar. Click on map for a larger image.

Detail of CIA Pakistan transportation map showing region around Gwadar. Click on map for a larger image.

Even though he was unsure of its pronunciation, Representative Dana Rohrabacher mounted what was initially a one-man campaign that he claimed was for a free and independent Balochistan. He did eventually enlist top-notch intellectual luminaries Louie Gohmert and Steve King in his effort, but the lingering question I had regarding his efforts on this front boiled down to:

Does Rohrabacher want to help the Baloch, or does he merely want US control of the port of Gwadar and an end to the planned gas pipeline from Iran to Pakistan through Balochistan?

We now have the opportunity to answer that question, as Rohrabacher’s attempts to arrange US control of Gwadar and to prevent the gas pipeline have failed. Pakistan officially transferred control of the port of Gwadar to China today from the Port of Singapore Authority. The final agreement relating to construction of the gas pipeline through Pakistan (Iran claims to have completed 900 kilometers of the pipeline within its borders already) was expected to be signed last Friday, but it appears a last-minute disagreement of gas pricing has delayed those signatures for a week. Here is Dawn on the transfer of Gwadar:

China took control of Pakistan’s Gwadar port on Monday as part of its drive to secure energy and maritime routes that also gives it a potential Arabian Sea naval base, sparking Indian concern. “The contract of operation of Gwadar port is formally given to China. Today, the agreement is transferred from the Port of Singapore Authority to China Overseas Ports Holding Company Limited,” President Asif Ali Zardari announced. “The award of this contract opens new opportunities for our people… It gives new impetus to Pakistan-China relations,” added Zardari in a speech broadcast live on television.

As the article notes, China had funded the bulk of the construction of the port, so it should come as no surprise that they would eventually gain control:

China paid about 75 per cent of the initial $250 million used to build the port but in 2007 PSA International won a 40-year operating lease. Then-ruler Pervez Musharraf was reportedly unwilling to upset Washington by giving control of the port to the Chinese.

I have to wonder whether Rohrabacher’s outright hostility shown to Pakistan over the Balochistan freedom movement and the issue of Dr. Shakeel Afridi played into their willingness to go against US wishes in signing Gwadar over to the Chinese. Perhaps Representative Rohrabacher can enlist a new ally in his battles with Pakistan since he is such an adherent to “the enemy of my enemy is my friend” approach. It appears that Iran is finding it necessary to build their own naval base very close to Gwadar so that they can keep an eye on what transpires there:

Iran’s Navy Commander Rear Admiral Habibollah Sayyari says the country is establishing a new base in the Sea of Oman near Pakistan’s border to boost the Islamic Republic’s defense capabilities. “The naval base, which is under construction, is situated in the Gwatr Gulf on our country’s farthest eastern shores bordering Pakistan,” Sayyari said on Sunday.

“The Iranian navy has so far had no military presence in the area, but now, we will be present in the region to defend the interests and maritime resources of our country and exercise a tighter control over the traffic in the region,” Sayyari noted.

Just as he took up arms to fight alongside Osama bin Laden’s Mujahideen movement against his arch-enemies from the Soviet Union, maybe Rohrabacher will decide to team up with Iran’s navy near Gwadar in an attempt to punish Pakistan for daring to thwart his wishes.

Why Does Mitt Hate Profit?

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[I posted substantially this post yesterday, but the BlogGods ate it along the way. So I’m reposting.]

Along with the deceitful attack on Italians who make better car company owners than GOP Private Equity types and the Lee Iacocca spin, Mitt has rolled out a radio version of attack on the auto bailout. From Greg Sargent, here’s part of the script:

Barack Obama says he saved the auto industry. But for who? Ohio, or China? Under President Obama, GM cut 15,000 American jobs. But they are planning to double the number of cars built in China — which means 15,000 more jobs for China.

And now comes word that Chrysler plans to start making jeeps in — you guessed it — China. What happened to the promises made to autoworkers in Toledo and throughout Ohio — the same hard-working men and women who were told that Obama’s auto bailout would help them?

The ad continues Mitt’s deceptive insinuation that GM and Chrysler aren’t also adding jobs in the US, which they are doing.

But it does something else. It takes a decidedly anti-profit stance.

You see, there are two reasons car companies are so gung-ho to enter (or re-enter, in the case of Jeep) the Chinese market. First, because it’s growing; when I was working in China, auto people considered the rising Chinese middle class to be 300 million–almost an entire US full of population. And most of them were just aspiring to buy their first car. That’s a whole lot of first time car buyers to sell to, as compared to US consumers, who are driving less and replacing their cars at a slower pace given more durable cars.

The other reason to go to China? Profit margins are bigger there than here. When I was in Shanghai in the mid-2000s, the profit margin on Buick Regals was about $2,000, as compared to the roughly $200 profit margin on a similar car here. The margins are closer now (because manufacturing in the US has gotten cheaper and in China has gotten more expensive), but China still offers good profit margins. Selling Buick Regals or Jeeps in China allows GM and Chrysler to accept lower margins on cars here.

By selling high margin cars in China, US companies can be more competitive here, meaning they will be able to expand sales and therefore production here, too.

All this is implicit in Sergio Marchionne’s response to Mitt’s ignorant rantings.

Together, we are working to establish a global enterprise and previously announced our intent to return Jeep production to China, the world’s largest auto market, in order to satisfy local market demand, which would not otherwise be accessible. Chrysler Group is interested in expanding the customer base for our award-winning Jeep vehicles, which can only be done by establishing local production. This will ultimately help bolster the Jeep brand,and solidify the resilience of U.S. jobs.

Marchionne notes 1) you can’t sell in China unless you build in China, 2) selling in China makes the Jeep brand stronger, 3) making the Jeep brand (and its profit margins) stronger makes it easier to keep up US production.

Marchionne’s implicit point should be where this discussion is heading: free trade hasn’t worked out to be fair trade. China–and Japan and Korea–still protect their markets, meaning if you want to sell there, you’ve got to make cars there.

Mitt has promised to get tough on China. But his series of auto ads have made no mention–not a peep!–of how he’ll reverse this practice and make it possible for Jeep to export cars made in Toledo. Indeed, when Obama launched a trade dispute over auto parts in September, Mitt scoffed at the effort (and ignored Obama’s decent and sustained effort launching trade disputes, one of which pertaining to specialty steel recently won at the WTO).

“The president may think that announcing new trade lawsuits less than two months before the election will distract from his record, but American businesses and workers struggling on an uneven playing field know better,” Mr. Romney said in a speech to the Hispanic Chamber of Commerce in Los Angeles.

Mitt Romney wants to attack American companies for going where profits are. And he’s doing so without discussing why that’s necessary.

That makes him neither a tough guy nor a good businessman.

Iran Putting Out Hopeful Signals Ahead of Amano Meeting in Tehran, Resumption of P5+1 Talks Wednesday

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Although today’s meeting with IAEA Director General Yukiya Amano in Tehran  is still in process as of this writing, Iran has put out very hopeful signals ahead of both this meeting and the resumption on Wednesday of the P5+1 talks in Baghdad. Adding to the atmosphere that a deal could be in the works are some positive words from Amano himself:

Before his arrival in Tehran Amano told reporters, “I really think this is the right time to reach agreement. Nothing is certain but I stay positive.” Amano added “good progress” had already been made.

/snip/

“We need to keep up the momentum. There has been good progress during the recent round of discussions between Iran and the IAEA,” Reuters quoted Amano as saying.

The same Mehr News piece carried upbeat news from the Iranian side as well:

Iranian Foreign Minister Ali Akbar Salehi had said he hoped an agreement would be reached to devise a “new modality” between Iran and the IAEA during Amano’s visit.

/snip/

“Iran had previously invited IAEA Director General Yukiya Amano to make a trip to Iran, but he decided to travel to Tehran and hold talks with our country’s officials before the Baghdad talks,” Salehi said.

“We regard the visit by the agency’s director general as a gesture of goodwill,” Salehi stated. “The focus will be on the issue of modality and a new working modality to help clear up the ambiguities and (answer) the agency’s questions. And we hope that an agreement will be reached between both sides to devise a new modality.”

Fars News has the details on who is taking part in today’s meeting:

Amano, accompanied by his chief inspector Herman Nackaerts and number two Rafael Mariano Grossi, was welcomed at the airport by Iran’s IAEA envoy, Ali Asqar Soltaniyeh, and a number of other officials.

During his one-day stay, Amano will hold talks with Head of the Atomic Energy Organization of Iran (AEOI) Fereidoun Abbassi Davani, Secretary of Iran’s Supreme National Security Council (SNSC) Saeed Jalili and Foreign Minister Ali Akbar Salehi.

The high levels of the participants on both sides of the talks do suggest that a deal could be imminent, and Fars collected a number of statements from diplomats agreeing: Read more →

Despite Progress on Iran-IAEA Talks, US Envoy Emphasizes War Plans

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Both Bloomberg and the AP’s George Jahn reported yesterday that the second session of talks in Vienna between the IAEA and Iran produced progress and that additional talks are now scheduled for May 21 in Vienna. But don’t look for news of this progress in the New York Times, because it’s not there. And don’t look for statements from the US praising the progress (although China did praise it) and urging further progress at Monday’s talks in Vienna or the P5+1 talks later in the week in Baghdad. Instead, US Ambassador to Israel Dan Shapiro chose to emphasize in an interview on Army Radio in Israel that US plans for war with Iran are ready to be put into action.

First, the good news on the progress. From Bloomberg:

Iran and International Atomic Energy Agency inspectors extended a round of negotiations over the Persian Gulf nation’s suspected nuclear-weapon work after both sides said progress had been made.

IAEA inspectors will meet again with their Iranian counterparts on May 21 in Vienna. They ended today two days of talks in the Austrian capital.

“We discussed a number of options to take the agency verification process forward,” IAEA chief inspector Herman Nackaerts told reporters. “We had a good exchange of views.”

/snip/

“We had fruitful discussions in a very conducive environment,” Iran’s IAEA Ambassador Ali Asghar Soltanieh said. “We have had progress.”

More details on the progress are reported by Mehr News:

Iran and the International Atomic Energy Agency have agreed to develop a modality for further cooperation, the Mehr News Agency has learnt.

The responsibilities and commitments of each side will be determined by the modality and the measures necessary will be taken based on the agreement.

In his report on the progress of negotiations, George Jahn couldn’t resist a partial reprise of his report over the weekend in which he breathlessly released a cartoon purporting to depict an explosives chamber where nebulous “Western diplomats” have leaked to Jahn that work to develop an explosive neutron trigger for an atomic bomb has been carried out. In an interesting development, Jahn has put a new accusation into this scenario. On Tuesday, I pointed out that if the accused work has been carried out in the chamber, then the steel walls of the chamber will be radioactive due to neutron activation and that this radioactivity will be dispersed throughout the entire thickness of the steel. That means the chamber cannot have its radioactivity removed by the cleaning process claimed by David Albright:

The process could involve grinding down the surfaces inside the building, collecting the dust and then washing the area thoroughly.  This could be followed with new building materials and paint.  It could also involve removing any dirt around the building thought to contain contaminants.

Jahn now allows for the possibility that Iran could not leave a chamber that is radioactive due to neutron activation in the building for an IAEA inspection:

 Some fear that Iran may even dismantle the explosives containment chamber believed to be inside the suspect building, taking it out in small pieces, if given enough time.

Why has Jahn’s language evolved from “scrubbing” the chamber to removing it? Read more →

Rohrabacher Attempts to Justify His Meddling With Pakistan

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Over the weekend, the Washington Post gave California Republican Congressman Dana Rohrabacher space so that he could attempt to explain to us why he is disrupting diplomatic efforts to repair US-Pakistan relations by continuing his quest for an independent Balochistan. Rohrabacher does manage a reference in the opening paragraph to the atrocities befalling the Baloch at the hands of Pakistani authorities, but his  column is more of a laundry list of what is wrong with Pakistan rather than why Balochistan should be independent.

Remarkably, Rohrabacher states “With this resolution, I do not seek to single out Pakistan”, but goes on to list a litany of complaints against Pakistan, most of which have nothing to do with the Baloch. Rohrabacher hits Pakistan for being an accomplice in the 9/11 attacks, for the fate of Shakeel Afridi and for harboring the Taliban. Coming from the man who coined the term “Freedom Fighters” to describe the Mujahedin while on Reagan’s staff and even going so far as to fight alongside bin Laden in Afghanistan against the Soviets, this is a remarkable level of hypocrisy. He also happens to mention that the Chinese have designs on the port of Gwadar. The clincher that Rohrabacher is simply punishing Pakistan comes in his penultimate paragraph:

It is time Washington stopped aiding Pakistan and developed a closer friendship with India and, perhaps, Baluchistan.

Yup, he’s not singling out Pakistan, he just thinks we need to stop supporting them and support their biggest enemy and those fighting from within.

Missing from Rohrabacher’s piece is any mention of what the Baloch are doing in their quest for independence. One would think that having been burned already by teaming with bin Laden out of hatred for the Soviets, Rohrabacher would look into the actions by those he is now supporting against Pakistan. Others appear to be aware that such examination will come soon, and we see a recent piece in Dawn where the independence movement attempts to justify some of its worst violence:

Brahamdagh [Bugti], whom the authorities in Pakistan have variously accused of financing, running and heading terrorist activities in Balochistan, rejected the perception that Baloch sardars were against development in their areas. He said the Baloch were, however, opposed to road-building projects meant for further exploitation of the province’s natural resources.

When asked about the murder of Punjabi settlers in Balochistan, Brahamdagh blamed the army. “When the army kills people, the family members [of those killed) have no choice but to react and take revenge,” he said.

The reason roads are being destroyed is that they are being used exploit natural resources and Punjabi settlers are being murdered because the Baloch have to kill someone in return for the Pakistani army killing their family members. What could possibly go wrong with supporting groups with these views?

 

World Approach to “Peace” in Syria: Arm Both Sides

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[youtube]http://www.youtube.com/watch?v=bE4tpmzb9SQ[/youtube]

The carnage in Syria continues unabated, with government forces shelling citizens, especially in the city of Homs. Qatar’s minister for international cooperation described Sunday’s veto of the UN Security Council resolution by Russia and China in this way:

Khaled al-Attiyah, Qatar’s minister for international co-operation,  said the vetoes sent “a very bad signal to Assad that there (is a) license to kill.”

Russia claims they are working for a peaceful settlement in Syria, with Foreign Minister Sergei Lavrov in Damascus now to speak to Assad:

Lavrov told Assad, according to Russia’s RIA news agency: “Every leader of every country must be aware of his share of responsibility. You are aware of yours. It is in our interests for Arab peoples to live in peace and agreement.”

Lavrov, whose government wields rare leverage in Syria as a major arms supplier to Damascus, said Assad assured him he was committed to halting bloodshed by both sides and that he was ready to seek dialogue with all political groups in Syria.

But the arms that Russia has been supplying to Assad are still being put to use against Syria’s citizens. From the same Reuters article:

Opposition activists said the fresh assault on Homs came after 95 people were killed on Monday in the city of one million, Syria’s third biggest. More than 200 were reported killed there by sustaining shelling on Friday night.

“The bombardment is again concentrating on Baba Amro (district of Homs). A doctor tried to get in there this morning but I heard he was wounded,” Mohammad al-Hassan, an activist in Homs, told Reuters by satellite phone. “There is no electricity and all communication with the neighborhood has been cut.”

A further 19 people were killed and at least 40 wounded in Tuesday’s barrage, activists said. Some reported fighting between army defectors and government forces trying move into areas the rebels hold in Homs.

Reflecting the total failure in what passes for world “diplomacy”, the response from the West is to arm the citizens of Syria to fight back against government forces who were armed by Russia. The approach starts out positively, as an attempt to prevent the arming of the Syrian government, but by the time Joe Lieberman gets involved, it goes terribly astray: Read more →

Early Effects of NDAA Iran Sanctions Being Felt: EU Agrees on Oil Embargo, China Cuts Oil Contracts by Half

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Iran's oil exports by country. (Click to enlarge) (From US Energy Information Administration; no, I don't know why China is at the bottom of the list)

Among the many controversial provisions in the NDAA which President Obama signed into law on New Years Eve are provisions aimed at disrupting Iran’s ability to export oil by punishing countries that do business with Iran’s central bank. Although the harshest sanctions on Iran’s bank don’t take full effect for another six months (and Obama says in his signing statement that he will regard the measures as nonbinding if they affect his “constitutional authority to conduct foreign relations”), Iran’s largest oil customers are planning to cut back dramatically on Iranian imports. The European Union has agreed in principal to a complete embargo on Iranian oil and China has already cut their imports from Iran for January and February to half their previous amount.

The moves by the EU and China will hit Iran very hard. As seen in the table above, China is Iran’s largest oil importer, buying 22% of Iran’s exports (but this only accounts for 11% of China’s overall imports), so cutting their order for the next two months in half will have a major impact on Iran’s overall oil revenues if replacement orders are not found quickly. The EU follows closely behind China, buying 18% of Iran’s oil exports. Note that these purchases are not spread evenly among EU nations, as Italy and Spain combine to account for over 75% of total EU imports of Iranian oil. Should the EU embargo actually take place, and even if China does not further reduce its purchasing, Iran is looking at a loss of about 30% of its oil export volume.

The Wall Street Journal describes some of the details of how the Iran oil sanctions are designed to take effect:

The bill specifically targets anyone doing business with Iran’s central bank, an attempt to force other countries to choose between buying oil from Iran or being blocked from any dealings with the U.S. economy.

Certain sanctions would begin to take effect in 60 days, including purchases not related to petroleum and the sale of petroleum products to Iran through private banks. The toughest measures won’t take effect for at least six months, including transactions from governments purchasing Iranian oil and selling petroleum products.

Reuters provides details on the status of the EU embargo:

European governments have agreed in principle to ban imports of Iranian oil, EU diplomats said on Wednesday, dealing a blow to Tehran that crowns new Western sanctions months before an Iranian election.

/snip/

Diplomats said EU envoys held talks on Iran in the last days of December, and that any objections to an oil embargo had been dropped – notably from crisis-hit Greece which gets a third of its oil from Iran, relying on Tehran’s lenient financing. Spain and Italy are also big buyers.

“A lot of progress has been made,” one EU diplomat said, speaking on condition of anonymity. “The principle of an oil embargo is agreed. It is not being debated any more.”

China is cutting its orders and is driving hard bargains on payments for the oil it is purchasing: Read more →