Well just in case the Iranian situation wasn’t difficult enough in and of itself (or here), there are always some around who will seek to take short-term benefit from the temporary embarassment of others. So this week, as June delivery oil prices spiked up around the 74 dollar a barrel mark, it became just a little bit clearer who might be doing what.
Earlier in the week it was China, with Hu Jintao’s visit to Washington in the headlines, who was making the running:
China’s close relationship with Iran’s defence industry will come under the spotlight when Hu Jintao arrives in Washington on Thursday, with at least one major state-owned conglomerate sending a delegation to lobby for the lifting of sanctions against Chinese companies allegedly involved in weapons proliferation….
the visitors include representatives from China North Industries Corporation â€“ Norinco â€“ a company singled out in 2003 for the most punitive US sanctions against a Chinese entity for its alleged aid to Iran’s ballistic missile programme.
All exports by Norinco and its subsidiaries to the US â€“ believed to run into hundreds of millions of dollars â€“ were banned. ….Norinco’s status highlights what American officials describe as a difficult balancing act in penalising Chinese companies for helping Iran’s military industry, while seeking Beijing’s support for internThe tabular content relating to this article is not available to view. Apologies in advance for the inconvenience caused.ational sanctions aimed at curbing the Islamic republic’s nuclear programme.
Yesterday, it was Russia’s Gazprom who, determined not to be left out of the act, warned EU member states against blocking its ambitions to expand in Europe, threatening it could shift gas supplies to North America or China.
The FT cites Gazprom representatives as saying “attempts to limit Gazprom’s activities in the European market and politicise questions of gas supply would not meet with good results” and explains that:
The comment followed the Financial Times revelation that the UK government had considered changing merger rules to block a potential Gazprom takeover of Centrica, Britain’s biggest gas supplier.
Ferran Tarradellas Espu-ny, a Commission spokesman, said Gazprom’s threat underscored the EU’s “need to diversify both the origin of our supplies and our supply routes”.
Earlier this year Gazprom sparked an international crisis when it briefly cut supplies to the EU in a dispute with Ukraine.
The FT also quotes France’s industry minister FranÃ§ois Loos, as saying that “there was no concrete reason for the most recent sharp rise in the oil price”. This is balderdash. The looming issue with Iran looks like it could turn extremely serious at some point, secondary players like Russia and China are, as I am suggesting, already positioning themselves to try and take some pickings, supply conditions are anyway extremely tight, and the hurricane season in the Gulf of Mexico has yet to get underway. I think it is clear that the EU has a major energy supply problem, that our most vulnerable economies (like Italy, or Portugal) could be knocked flat out by a sudden sharp hike in prices (or restriction in supply), and that makes us vulnerable to blackmail from a variety of quarters (something of which the secondary players are already all too well aware) . Methinks that our collective response here falls well short of what is required.