Iran Facing European Sanctions over Nuclear Programme

The Scotsman:

After embracing a diplomatic approach to contain Iran’s nuclear ambitions, European governments appear to be moving toward turning their carrot into a stick.

But as foreign ministers from France, Britain and Germany meet Iranian officials in Geneva for crucial negotiations today, it is unclear if a tougher strategy of economic sanctions would work.

The only certainty for Western powers in such a scenario would be a big negative: still higher petrol prices at the pump. READ MORE

Following months of fruitless talks, the European Union has begun warning that it is moving toward the US position that Tehran should be hauled before the UN Security Council for suspect nuclear activities in violation of the Nuclear Non-proliferation Treaty.

To avert a showdown that could result in UN sanctions, Tehran agreed to meet the three European ministers and the EU foreign policy chief, Javier Solana, for last-ditch talks which will take place in Geneva today.

The EU push followed Iran’s announcement last week that it was considering restarting its uranium-enrichment program, which Iran insists is only aimed at generating electricity as permitted under the non-proliferation treaty. The EU and the US fear the program is being used to develop nuclear weapons.

However, any strong sanctions against Tehran would likely cause oil prices, already around 50 dollars a barrel, to rise.

“The most severe sanctions that would affect Iran would be sanctions against their oil industry, that is, an international boycott on Iranian oil products,” said Gary Sick, a senior research scholar at Columbia University. ”That would mean basically taking 3 million barrels a day off the market which would probably cause the price to spike.”

Sick said it was far from certain that the Security Council would impose sanctions, with veto-wielding China and Russia are among countries that have expressed opposition.