It is really great to see the international community get behind us in our effort to avert bloodshed and war -especially our really good allies like Japan, South Korea and India. All of them have stated their complete support of our efforts and to show that support they have agreed to reduce their purchases of Iranian oil by as much as 20% -and have asked for waivers to buy the rest.
Of course, since they are also the main remaining purchasers of Iranian oil, the sanctions, instead of crippling Iran's money flow, will just reduce it a little (about 2 cents on the dime). Wow, with friends like that who needs enemies?
Japan's parliament approved government guarantees on insurance for crude oil cargoes from Iran, paving the way for it to become the first of Iran's big Asian oil buyers to get around the new European Union sanctions. The waivers and insurance guarantees will allow the Japanese government to provide cover of up to $7.6 billion for each tanker carrying Iranian crude bound for Japan in the event of accidents.
An EU ban on member countries importing Iranian oil takes effect on July 1 and includes a ban on EU insurance firms from covering Iran's exports. That is a headache for Japan, South Korea, China and India, which together buy two-thirds of Iran's oil exports and rely on EU companies to insure them.
Well, I guess I can understand why these countries are reluctant to stop buying oil from Iran. Oil is absolutely necessary and a sudden stop in supply would cripple a countries economy overnight, I mean, it's not like there are many places where they can turn to buy their oil. (that is, other than Saudi Arabia, Russia, Iraq, Canada, the United States, Venezuela, Brazil, Nigeria, Mexico, the North Sea and Southeast Asia).
India's government, which has also won an exemption to U.S. sanctions, has been trying without success to figure out how it will get around the EU sanctions. Iran's top buyer China has yet to detail how it plans to resolve the insurance problem, but industry sources there have said the country will find a way to keep imports flowing. South Korea will actually reduce imports to zero in July due to the insurance ban but Seoul, like Tokyo, has lobbied the EU to delay or get a waiver on implementing the ban on insurers.
The European Union will not cancel or delay the embargo on Iranian oil tankers. China, Japan, India and South Korea have been forced to cut overall purchases by about a fifth from the 1.45 million bpd they were buying a year ago ahead of the imposition of the sanctions.
Well, anyway, it's good to see such enthusiastic support from our friends and allies.
I have an idea. The next time Japan gets into an argument with China over fishing and oil rights in that part of the world and expects the US Navy to have their backs -lets tell them to pump some of that Iranian oil they're buying into their own ships and take care of business themselves....
Live Long and Prosper....