Russia and Iran to sign energy "road map"

July 13, 2010

Reuters

Russia said on Tuesday it planned to sign a road map to outline future energy cooperation withIran.

Russian oil and gas majors Gazprom, Gazprom Neft and LUKOIL, have signed billions of dollars worth of deals to help Iran develop its oil and gas fields but most projects are on holding because of sanctions.

The document will be signed on Wednesday when Iranian Oil Minister Massoud Mirkazemi meets his Russian counterpart Sergei Shmatko in Moscow, the oil ministry said without providing details.

At best, analysts said, it will reflect Russia's efforts to walk a safe path between international sanctions and Moscow's wish to maintain ties with a fellow oil and gas power.

"The ministers will discuss the current situation in Russia-Iranian energy cooperation and will outline prospects for future cooperation," the statement said.

"The ministries will study issues linked to the creation of favorable conditions to intensify and make cooperation in the energy sphere between Iran and Russia more concrete," it added.

Russia voted for sanctions in the United Nations Security Council on June 9 that target the Islamic Republic banking and shipping sectors because ofIran's failure to allay fears over its disputed nuclear programme.

"Russian companies are taking a cautious approach to this country at this moment they don't want to engage in politically risky and financially risky projects," Troika Dialog analyst Valery Nesterov said.

"The maximum terms they can offer are oil services contracts which are not especially rewarding as they don't secure additional oil supplies for the companies."

But Russian state controlled companies are unlikely to shut down investment or withdraw completely from Iran, holder of vast untapped oil and gas resources.

Russia's No. 2 oil producer, LUKOIL -- 20 percent owned by U.S. oil major ConocoPhillips -- has decreed a halt to its gasoline exports to fuel-hungry Iran.

But state controlled Gazprom has said it is bidding to develop the Azar oilfield and has expressed interest in Iran's giant South Pars field.

The Kremlin's influence in Tehran is a key lever of influence in its relationship with the United States and the European Union, which fear Tehran is seeking to create a nuclear bomb. Irandenies it is seeking nuclear weapons.

"There is an understanding that Russia needs to engage with Iran at some level," Weafer said. "The last thing the U.S. would actually want is for Tehran to end up only speaking to Beijing because that would limit U.S. back door access to Tehran."

(Reporting by Melissa Akin and Dmitry Zhdannikov; Editing by William Hardy)

Source: http://www.reuters.com/article/idUSTRE66C15020100713

BP and Iran Air end contract at Hamburg

July 13, 2010

Reuters

Oil major BP has ceased supplying jet fuel to Iran Air at Germany's Hamburg airport, both parties confirmed on Tuesday.

Two Iran Air aircraft were unable to refuel at the airport earlier this month and had to be diverted.

"We can confirm the contract finished at the end of June," sad a BP spokesman, without giving a reason. She declined to comment on whether BP has ended all contracts with the Iranian flagship carrier.

The confirmation follows reports that Iranian aircraft have been denied fuel in Germany, Britain and a Gulf Arab state as a result of the latest set of U.S. sanctions designed to heap pressure on the Islamic Republic over its nuclear program.

This was later denied by an Iranian official.

Iran Air's Germany manager Mohammad Reza Rajabi told Reuters he expected a new fuel agreement to be signed with a supplier in Hamburg "within a few days."

He declined to name the new supplier, adding that negotiations were underway.

Planes at other European airports are being fueled normally, he said.

"We do not have problems in other European airports, only there (Hamburg)...I think it will be a normal situation by next week."

Some aircraft which had not refueled at Hamburg have been diverted to Frankfurt and Vienna, he said.

Rival supplier Royal Dutch Shell plans to let its contracts to supply Iran Air with jet fuel lapse in response to the latest U.S. sanctions, an industry source said last week.

(By Michael Hogan and Emma Farge, Editing by William Hardy)

Source: http://www.reuters.com/article/idUSTRE66C4QP20100713

Iranian scientist decides to return to Iran

July 13, 2010
Reuters
Iranian nuclear scientist Shahram Amiri, who vanished during a pilgrimage, turned up at Pakistan's embassy in Washington on Monday and has decided to return to Iran "of his own free will," a U.S. official said on Tuesday.
Source: http://www.reuters.com/article/idUSTRE66C3KE20100713

Iran fuel imports nosedive as sanctions bite: source

July 26, 2010

Reuters

Only three cargoes of gasoline have so far reached Iran in July, according to a shipping document seen by Reuters, much less than the seasonal norm, as new sanctions cause ships carrying fuel to be diverted.

A series of new sanctions agreed since June specifically targets Iran's oil trade and industry, making it even harder to do business with the Islamic Republic. The EU adopted formally its latest measures on Monday.

Iran is the world's fifth largest crude exporter, but has to import around 40 percent of its gasoline needs because domestic refining capacity is inadequate.

Traditionally during the summer holiday driving season, Iran needs 11-13 cargoes a month, a Dubai-based trader told Reuters.

The document seen by Reuters showed only three cargoes of gasoline had arrived this month and were supplied by Turkish refiner Tupras and Unipec, the trading arm of China's Sinopec.

The companies were not immediately available to comment.

Another cargo is expected to arrive from Venezuela at the Iranian port of Bandar Abbas, two Gulf-based traders said.

They were not aware any other cargoes were heading to Iran.

"The new rounds of sanctions are making things hard right now, and many ships are being diverted, so Iran is only getting a fraction of its actual summer demand," said a trader.

Earlier this month the owner of a gasoline tanker refused to allow the vessel to sail to Iran from Turkey.

"Owners of ships are really worried right now about sending shipments toIran and that's why Iran is looking for alternative companies and countries to import from," said a Gulf-based trader.

As the pressure has mounted on Iran, the insurance market Lloyd's of London said it would not insure or reinsure petroleum shipments going into Iran.

Lloyd's, which has 15 to 20 percent of the global marine insurance sector, is seen as a major influence on other insurance markets with more players pulling back from offering cover to Iran.

Major shipping associations have also created clauses in contracts that enable ship owners to refuse to deliver refined petroleum cargoes to Iran.

ADAPTING TO CHANGE

Industry sources and analysts have anticipated some of Iran's traditional suppliers, such as China and Turkey, would stay loyal.

Venezuela, although very distant, making shipments costly, is also regarded as natural ally.

Iran can also adapt by upgrading its refining capacity, although this requires time and investment. For the shorter term, Iran can reduce the quotas of gasoline available at fully subsidized prices to curb demand.

The Iranian oil ministry has already said demand is on a falling trend. In June, it said average consumption since March had been 63.1 million liters, down 2.7 percent year-on-year.

Its website also said total daily production was 45 million liters, meaning about 18 million liters needed to be imported each day.

Standard gasoline cargoes are 33,000 tonnes or around 45 million liters, traders said, so one would provide around 2-1/2 days of import needs.

Other strategies for plugging the gap include smuggling refined products by land.

Trucks filled with fuel have managed to find a way into Iran despite a pledge by Iraqi Kurdistan to crack down on smuggling activities.

Asked about gasoline imports, an official from the National Iranian Oil Co. said on Monday there was "no sign of difficulties."

He also said crude exports were continuing to China and Europe.

For FACTBOX on Tactics adopted by Iran to overcome sanctions, please click on

(By Amena Bakr and Luke Pachymuthu Additional reporting by Barbara Lewis in Dubai, Robin Pomeroy in Tehran, Orhan Coskun Ankara and David Sheppard in London; editing by Keiron Henderson)

Source: http://www.reuters.com/article/idUSTRE66P2X620100726

Iran says sanctions might slow nuclear programme

July 7, 2010

Reuters

Sanctions against Iran could slow down its nuclear progress, a senior government official said on Wednesday, the first time Tehran has acknowledged the measures might have some bite.

"We cannot say the sanctions have no effect," the head of Iran's atomic energy agency, Ali Akbar Salehi, was quoted as saying by ISNA news agency. "Maybe they will slow down the work but they will not stop it, that's certain."

President Mahmoud Ahmadinejad had previously said a new wave of sanctions imposed by the United Nations, the United States and the European Union would have no impact on Iran's economy or its nuclear programme.

He called the U.S. sanctions -- which President Barack Obama said were Washington's toughest ever -- "pathetic" and said the U.N. resolution was worth no more than a "used handkerchief."

Salehi, who earlier on Wednesday said Iran's Bushehr nuclear power station would come on stream by the end of the summer, said the plant would not be affected by the sanctions, but Iran's more controversial uranium enrichment programme might be.

"In the case of enrichment and for some equipment like equipment for measuring, we might have some problems," Salehi said. But he added that Iran would be able to produce that equipment itself if necessary.

Iran has said it is prepared to return to talks with world powers on its nuclear programme, to discuss a fuel swap under which it would send some of its low-enriched uranium abroad in return for purer material -- enriched to 20 percent -- that it needs for a medical research reactor.

Salehi said Iran would continue enriching uranium to 20 percent -- an activity which particularly concerns the West as it is a significant step towards making weapons-grade material. He said Iran, which says its programme is for generating electricity and rejects Western suspicions it is seeking to build a nuclear bomb, had the right to enrich even further.

"We will not produce 20-percent-enriched uranium more than our needs, but we reserve the right to enrich to whatever level of enrichment for use in peaceful ways," he was quoted as saying by the official news agency IRNA.

Obama this month signed into law far-reaching U.S. sanctions aimed at squeezing Iran's refined petroleum imports. Among other measures, the latest round of U.N. sanctions, in June, expanded an arms embargo against Tehran and called for new measures against Iranian banks with suspected connections to the country's nuclear or missile programmes.

(Writing by Robin Pomeroy, editing by Mark Trevelyan)

Source: http://af.reuters.com/article/worldNews/idAFLDE6661AP20100707

Russia and U.S. downplay spy case; suspect on run

July 01, 2010

Reuters

Russian and the United States sought to shield improving ties from fallout in a Cold War-style espionage case on Wednesday, while a key suspect went missing after jumping bail in Cyprus.

After initially attacking the U.S. announcement of the arrest of 10 spy suspects as "baseless and improper" -- raising the specter of a diplomatic standoff -- Moscow stepped back with more conciliatory comments.

Neither nation wants to undermine fragile improvements in long-strained ties, political analysts said.

"We expect that the incident involving the arrest in the United States of a group of people suspected of spying for Russia will not negatively affect Russian-U.S. relations," a Foreign Ministry official said, on condition of anonymity.

U.S. officials echoed Russian hopes that the scandal, which had echoes of the fiction of John le Carre, would not ruin the relationship "reset" initiated by U.S. President Barack Obama and embraced by Russian President Dmitry Medvedev.

"We are going to work as hard as we can to move beyond this," State Department spokesman P.J. Crowley told a news briefing on Wednesday.

"It is absolutely evident that the scandal will wind down, as neither side wants a disruption of the 'reset' (of relations)," said Alexander Golts, a Russian military analyst.

A senior Obama administration official said Under Secretary of State for Political Affairs William Burns had discussed the matter with the Russian ambassador in Washington.

The U.S. Justice Department on Monday announced it had arrested 10 suspected spies in four locations on the eastern seaboard, where some of them had led seemingly typical suburban lives among unsuspecting neighbors.

SUSPECT SPY ON THE RUN

An 11th suspect, Christopher Robert Metsos, 55, was arrested in Cyprus on Tuesday and freed on bail. Cypriot police said on Wednesday that Metsos was missing and that a warrant for his arrest was being prepared for violating the bail terms.

Metsos had been expected to sign in at a police station in the coastal town of Larnaca but failed to appear, police said.

Metsos was accused of receiving and distributing money to the group, which U.S. officials say collected information on issues ranging from nuclear weapons research to the global gold market and CIA job applicants.

According to the Justice Department, he had received payments from a Russian official affiliated with Russia's mission to the United Nations in a spy-novel style "brush-pass" handoff, and also buried money in rural New York that was recovered two years later by other suspects.

U.S. accusations recalled spy scandals of the Soviet era and the more recent chill in relations with a Kremlin which, during the 2000-2008 presidency of ex-KGB officer Vladimir Putin, often accused the West of trying to weaken Russia through espionage.

But analysts said neither nation is in the mood for a new downturn in relations.

Russia is counting on U.S. backing to clinch entry into the World Trade Organization, where it is the largest economy still banging on the doors after a 17-year accession campaign.

That support was high on Medvedev's agenda at a summit with Obama last week that followed a visit to California's Silicon Valley, a hub of U.S. expertise crucial to Russia's uphill battle to modernize its overly resource-reliant economy.

Obama needs Russia on his side for efforts to rein in Iran's nuclear program, keep supply lines open to forces in Afghanistan and advance his goal of progress toward a world without nuclear arms.

The relatively mild Russian rhetoric clearly indicated that the Kremlin wants to limit the damage, Golts said.

Putin sent that message on Tuesday, telling ex-U.S. President Bill Clinton that U.S. police were "out of control" and "throwing people in jail." But he then added that they were just doing their job, and said he hoped the spy scandal would not reverse "all the positive gains."

Russian-U.S. ties deteriorated steadily after the U.S.-led invasion of Iraq in 2003, which Putin vehemently criticized, and hit new lows when Russia sent forces into pro-Western Georgia in a five-day war in 2008.

Signs of new warmth since then include Russia's backing of new sanctions against Iran this month and the major nuclear arms control treaty Medvedev and Obama clinched in April. 

By Conor HUmphries and Steve Gutterman

Source: http://www.reuters.com/article/idUSTRE65T27220100630

Iran says nuclear talks to resume with Brazil, Turkey

June 29, 2010

Reuters

Iran said on Tuesday it would soon resume nuclear talks with Turkey and Brazil -- a tentative first step back to international negotiations after Tehran was hit with a new wave of sanctions over its disputed nuclear work.

Iran has belittled the U.N., U.S. and European sanctions and President Mahmoud Ahmadinejad said on Monday he would return to long-frozen talks with world powers but on certain conditions only, and not before the end of August.

His foreign minister said talks would start before then with the two countries with which it agreed a nuclear fuel swap deal in May -- echoing a U.N.-brokered pact that Tehran backed out of late last year -- and which voted against the U.N. sanctions.

"There were some contacts with the foreign ministers of the three countries (Iran, Turkey and Brazil)," Manouchehr Mottaki told a news conference. "A joint meeting is on the agenda and we will announce it in the coming one or two days."

Iran has held no substantive talks with world powers since the deal in principle on the fuel swap struck with Russia, France and the United States in October.

The pact would have seen Iran sending 1.2 tons of low-enriched uranium (LEU) -- about 70 percent of its stockpile at the time -- abroad in exchange for specially processed fuel rods needed to keep the Tehran medical research reactor running.

In a turnabout, Iran agreed in talks in May with Brazil and Turkey to part with 1.2 tons of LEU. But by then Iran's LEU reserve had doubled in size, devaluing the swap's terms in Western eyes since it would no longer divest Iran of enough LEU to prevent its use for an atom bomb, if refined to high purity.

So the May agreement proved too little too late to prevent a new batch of punitive sanctions from the United Nations, European Union and United States.

Meanwhile, Iran has increased suspicions abroad by launching enrichment up to a level of 20 percent purity, asserting this will yield raw material for making the reactor fuel rods without foreign help -- but at the same time advancing much of the way down the road toward weapons-grade enrichment.

NEW IRANIAN CONDITIONS

Russia, which backed the U.S.-led push for further sanctions but has since complained about the United States and the European Union issuing stricter unilateral measures, said on Tuesday it wanted to get back to talks with Tehran.

Foreign Minister Sergei Lavrov said he wanted talks between Iran, the United States, Russia and the watchdog International Atomic Energy Agency focusing on providing Iran with reactor fuel rods so it would need to escalate enrichment itself.

"In the wake of the Brazilian and Turkish initiative, Russia, along with the United States, approached the director of the IAEA and proposed we arrange a meeting of technical experts from our three countries, including Iran, to discuss the possibility of supplying fuel for the experimental reactor in Iran, so that there will be no need for Iran to enrich the uranium to a level of 20 per cent," Lavrov said.

"I hope very much that Iran will respond positively and that this will help prevent the situation from deteriorating," he told reporters during a visit to Israel, which considers Iran's nuclear campaign an existential threat.

On Monday, Russia complained to the U.N. Security Council about what U.N. diplomats said was Germany's seizure of items bound for a nuclear power plant in Iran, saying such moves were "not in line" with U.N. rules.

On June 19, French President Nicolas Sarkozy told Russian President Dmitry Medvedev that France was ready to talk with Iran at the IAEA "without delay," using the Tehran declaration by Iran, Brazil and Turkey as a starting point [ID:nPAB008398].

The West fears Iran's nuclear work is aimed at developing the means to build bombs because of its history of secrecy and restricting IAEA inspections. Tehran says it will be solely for generating electricity and isotopes for medicine and farming.

Ahmadinejad has called on the major powers to "clarify" three things before talks could resume: their attitude to Israel's alleged nuclear arsenal, their stance on commitments to the nuclear Non-Proliferation Treaty and whether they come to the table as Iran's friend or its enemy.

World powers were likely to dismiss such conditions as irrelevant to the main issue -- Iran's refusal to negotiate limits and transparency with respect to its nuclear activity.

"Somehow implying there's a linkage between the Iranian issue and the Israeli issue ... will certainly not make life easier," said a Western diplomat versed in the Iran issue.

"Saying that as a punishment that they only want talks in the third week of August -- this is posturing which we shouldn't take too seriously ... We need to wait for Iran's official response on the (swap) plan and the offer of talks from the EU."

(Additional reporting by Amie Ferris-Rotman in Moscow and Sylvia Westall in Vienna; Writing by Robin Pomeroy and Mark Heinrich; editing by Janet McBride)

Source: http://www.reuters.com/article/idUSTRE65S31520100629

Obama, Saudi King Abdullah urge Iran over nuclear program

June 29, 2010

Reuters

President Barack Obama and Saudi Arabia's King Abdullah on Tuesday voiced "strong support" for international efforts to curb Iran's nuclear program, which the West says masks a secret drive to develop the capability for an atomic bomb, the White House said.

Obama and the King also expressed hope "proximity talks between Israelis and Palestinians will lead to the resumption of direct talks with the aim of two states living side-by-side in peace and security," the White House said in a statement.

(Reporting by Alister Bull; Editing by Patricia Zengerle)

Source: http://www.reuters.com/article/politicsNews/idUSTRE65S62620100629

Iran could have nuclear weapons by 2012, CIA chief warns

June 27, 2010

Telegraph

Iran has enough low-enriched uranium to produce two nuclear weapons, which it could have prepared and ready for delivery as early as 2012, Leon Panetta, the CIA director, said on Sunday.

Tehran would need a year to enrich the uranium fully to produce a bomb and it would take “another year to develop the kind of weapon delivery system in order to make that viable,” Mr Panetta said.

Sanctions imposed by the United Nations could help weaken Tehran’s government by creating economic problems, but were unlikely to put an end to Iran’s nuclear ambitions, Mr Panetta told the ABC network’s “This Week” programme.

Iran is under mounting international pressure over its suspect nuclear programme, which the West fears masks a covert weapons drive. Iran denies the charge, insisting that its atomic programme is for peaceful civilian purposes only.

Over the weekend, G8 leaders urged Tehran to hold a “transparent dialogue” over its suspect nuclear programme. Iran’s President Mahmoud Ahmadinejad said on Thursday that Iran would this week lay down its conditions for talks with the world powers.

The US Congress this week endorsed a sweeping package of tough new energy and financial sanctions on Tehran over the programme.

The Islamic republic has been flexing its military muscle mainly in the strategic Gulf region by staging regular war games and showcasing an array of Iranian-manufactured missiles.

Neither the United States nor its top regional ally Israel, the sole if undeclared nuclear-armed power in the Middle East, has ruled out a military strike to curb Iran’s atomic drive.

The UN Security Council this month slapped a fourth set of sanctions on Iran, targeting financial transactions and travel by senior military figures, to punish Tehran for its refusal to rein in its uranium enrichment programme.

Iran responded by barring two UN nuclear inspectors from returning to the country last week.

Source: http://www.telegraph.co.uk/news/worldnews/middleeast/iran/7857627/Iran-could-have-nuclear-weapons-by-2012-CIA-chief-warns.html