Iran serves notice on Pakistan for delay in gas pipeline project

Reportedly, Iran has served a third notice to Islamabad, renewing its intention to move the arbitration court for not laying the pipeline as part of the Iran-Pakistan gas line project. The project has been facing delays since 2014.

It is believed that the Interstate Gas System (ISGS) has funds to lay down the 81-kilometer pipeline to partially become part of the project. Now it is time Pakistan should come out of US hegemony and complete this gas pipeline at the earliest.

Iran had asked Pakistan in its second notice to construct a portion of the Iran-Pakistan gas pipeline project in its territory by March 2024 or be ready to pay a penalty of US$18 billion.

Tehran had sent a notice to Islamabad in February 2019 to move an arbitration court for not laying down the pipeline in Pakistan’s territory in the stipulated period under the IP gas line project. It threatened to invoke the penalty clause of Gas Sales Purchase Agreement (GSPA). The GSPA was signed in 2009 for 25 years but the project could not take shape.

Pakistan has been arguing that it could not materialise the project in its territory because of the US sanctions imposed on Iran, a view which authorities in Tehran have never subscribed, saying the US sanctions are not justified. Iraq and Turkey have been using gas from Iran for long as they have managed waivers on the US sanctions.

It is on record that India got a waiver for importing petroleum products from. Pakistan has, meanwhile, tried to contact the US authorities many times to know whether the US curbs on Iran would have any impact on Pakistan if it becomes a part of the IP gas line but the country has not received any response from Washington.

The GSPA (Gas Sales Purchase Agreement) was signed under the French law and the Paris-based Arbitration Court is the forum to decide disputes that arise between the two countries. The French arbitration court does not recognize the US sanctions.

It is believed that the top authorities in Pakistan have carved out a strategy under which it has been decided to partially implement the IP gas line project by laying down an 81-kilometer pipeline from Gwadar to the Iranian border, a point where Iran has already laid down its part of the pipeline from the gas field. This will help Pakistan avoid the expected penalty of US$18 billion if Iran moves the Arbitration Court.”

As per the plan, the 81-kilometer pipeline will connect Gwadar with the IP gas line project and the gas will be used in Gwadar initially. If the US does not invoke any kind of sanctions, then the pipeline will be extended from Gwadar to Nawabshah. If Washington imposes sanctions, then Pakistan will have valid reasons to abandon the project and this is how it would escape the US$18 billion penalty and arbitration court proceedings. To this effect, top-level leadership of both the countries is in constant touch at the ministerial level on a strategy to implement the project and the prime minister will be briefed by the authorities very soon and a go-ahead for the strategy will be sought.

The Special Investment Facilitation Council (SIFC) has also been sensitized over the latest notice from Iran and the strategy carved out by the authorities concerned.

According to top sources in SIFC, Pakistan has to show seriousness by March 2024 towards the Iran-Pakistan gas pipeline by laying down the 80-kilometer pipeline from Gwadar to the Iranian border or it would face the US$18 billion penalty.

Profile of prisoners swapped by Iran and United States

I am sure many of the readers of my blogs would be keen in reading the profiles of prisoners exchanged between Iran and United Stations. The real point to ponder is that the United States has used funds which it never owned.

On September 18, Iran released five US citizens as part of a prisoner swap. The four men and one woman had been imprisoned. One had been held since 2015. In return, the Biden administration released five Iranian men imprisoned in the United States, including two who had been held since 2019.

The United States also issued a waiver so South Korea could transfer US$6 billion of frozen Iranian oil revenues to Qatar, which will oversee limited Iranian purchases of humanitarian goods, including medical, education and agricultural goods. 

Four of the Iranians had allegedly violated US sanctions, and another had acted as an unregistered foreign agent of the Islamic Republic. Only two of the Iranians were going to return to Iran. “One of them, as he has family in another country, will be moved to join them in that third country, and apparently two of our citizens imprisoned in the US have said they wish to remain there due to their history of staying there,” foreign ministry spokesperson Nasser Kanani said.

The following are profiles of the prisoners.

US citizens released by Iran

Three of the five US citizens released by Iran are Siamak Namazi, Morad Tahbaz and Emad Shargi, no details are available for the two prisoners.

Siamak Namazi, a Dubai-based businessman was arrested during a trip to Iran in October 2015. In October 2016, he was sentenced to 10 years imprisonment for collaborating with an enemy state. Namazi had primarily worked for consultancies focused on energy before his detention. In 2005, he was a public policy scholar at the Woodrow Wilson International Center for Scholars. He also did a stint at the National Endowment for Democracy in 2006. Baquer Namazi, Siamak’s father, traveled to Iran to secure his son’s release but was also sentenced to 10 years for espionage in 2016. In October 2022, Iran released the elder Namazi so that he could seek medical treatment abroad.

Emad Shargi also a businessman was detained in April 2018, while working for a venture capital fund involved in technology. After being interrogated and held in solitary confinement, he was released on bail in December 2018. A year later, he was cleared of all spying and national security charges. But his passport was withheld, and he was not permitted to leave Iran. In November 2020, Shargi was summoned to court and convicted of espionage without a trial. He was sentenced to 10 years in prison.

Morad Tahbaz and eight other environmental activists were detained In January 2018. In November 2019, Tahbaz was sentenced to 10 years in prison for espionage. Tahbaz and his colleagues had been using cameras to track endangered Asiatic cheetahs and were accused of using that work as a cover for collecting “classified information.”

Iranian citizens released by the United States

Mehrdad Moein Ansari, an Iranian citizen and resident of the United Arab Emirates and Germany was arrested in 2019, for plotting to secure dual-use materials with potential military and nuclear applications for the Islamic Republic. In September 2021, he was sentenced to more than five years in prison. 

Kambiz Attar Kashani, a US-Iranian citizen was arrested in January 2022, for conspiring to export goods and technology to the Central Bank of Iran. He had used two front companies based in the United Arab Emirates to procure equipment and software for Iran. In February 2023, he was sentenced to 30 months in prison. 

Reza Sarhangpour Kafrani, an Iranian and resident of Canada was arrested for sending laboratory materials to the Islamic Republic. He had shipped the equipment—controlled for nuclear nonproliferation purposes—to Iran through Canada and the United Arab Emirates. He was indicted in July 2021 with 10 crimes, some of which carried maximum prison sentences of 20 years. 

Amin Hasanzadeh, an Iranian and permanent US resident was arrested in November 2019 on charges of fraud and interstate transportation of stolen property. Federal prosecutors accused Hasanzadeh of stealing sensitive technical data from his employer and sending it to his brother, who is connected to the Iranian military. He was indicted in December 2020. 

Kaveh Afrasiabi, the US-based Iranian was arrested in January 2021, for failing to report his status as a foreign agent in the United States. He had lobbied the State Department and a congressman for policies favorable to Iran while on the payroll of Iran’s UN mission since around 2007. His alleged crimes carried a maximum of 10 years in prison. 

 

Iranian oil exports to China triple

Iranian oil shipments to China have more than tripled over the past three years despite the US sanctions on the country and the increase in Russia’s shipments to the Asian country, data released by data analytics firm Kepler show.

According to the data Iranian crude exports to its major trade partner have been hovering around one million barrels per day (bpd) in 2023, while the figure was roughly 325,000 bpd in 2020.

Iranian oil shipments to China have been on upward trajectory since 2019. In 2021 the exports reached 585,000 bpd and in 2022 the figure was reported at 766,000 bpd.

The International Energy Agency (IEA) in a recent report titled "Oil 2023" confirmed Iran's daily export of one million barrels oil to China saying, “Despite severe financial restrictions, Iran managed to increase its crude oil production by about 140,000 barrels per day in 2022 to an average of 2.5 million barrels per day. It seems that Tehran has maintained its crude sales to China, which has been around one million barrels per day since the third quarter of last year.”

Iranian oil production also increased in the current year, in May the country’s oil output reached 2.9 million bpd, 350,000 bpd more than in 2022.

Back in April, Bloomberg reported that Chinese private refineries are buying more Iranian oil despite the rising competition for supplies from Russia.

“The teapot refineries are prioritizing the flows, with Russian supplies getting more pricey as mainstream buyers such as state-owned Chinese refiners and Indian processors take a greater share,” the report read.

In March, Chinese import of Iranian crude and condensate jumped 20%MoM to 800,000 barrels a day, and are on track to extend gains in coming months, Emma Li, an analyst with data intelligence firm Vortexa told Bloomberg.

While Iranian oil has long been sanctioned by the US, refiners in China have proved to be a consistent outlet.

Most Iranian oil used to go to state-owned refineries but the private refiners in Shandong especially are now running the show, said Homayoun Falakshahi, senior crude oil analyst at Kpler.

Earlier this year, Iranian President Ebrahim Raisi said that the oil and gas sector experienced a growth of 9% in the Iranian calendar year 1401.

Oil Minister Javad Oji has also said recently that a new record high will be reached in the country’s oil export in the current Iranian calendar year.

Despite the negative impacts of the US sanctions, Iran has been ramping up its oil production and exports over the past few months.

In his remarks in November 2022, President Raisi highlighted the failure of the enemy’s policy of maximum pressure, saying the country’s oil export has reached the pre-sanction levels.

Back in January, the EIA in a report put Iran’s average oil production in 2022 at 2.54 million bpd, 140,000 bpd more than a year ago.

Iran's oil production in 2021 was about 2.4 million bpd.

Iran-China trade exceeds US$5 billion in four months

The value of trade between Iran and China reached US$5.23 billion in the first four months of 2023, according to the data released by China’s customs administration.

The four-month trade between the two countries increased by 4% as the figure was US$5.02 billion in the first four months of 2022.

As reported, Iran’s exports to China during the period under review faced a 39% decrease as compared to the same period last year and reached US$1.52 billion. In the same period last year, China imported US$2.49 billion of goods from Iran.

During this period, China's exports to Iran increased by 46% to US$3.71 billion. China exported US$2.53 billion worth of commodities to Iran during January-April last year.

According to the data previously released by China’s customs administration, the value of trade between Iran and China increased by 7% in 2022 as compared to the previous year.

Based on China’s customs data, the Islamic Republic and China traded US$15.795 billion worth of commodities in 2022 that was US$1.035 billion more than the figure for 2021.

As reported, China's exports to Iran grew by 14% in the period under review as compared to the preceding year to reach US$9.44 billion. The Asian country exported US$8.258 billion worth of goods to Iran in 2021.

The value of Iran’s non-oil exports to China registered 2%decrease in 2022, reaching US$6.355 billion. Iran exported US$6.502 billion worth of goods to China in 2021.

Iran's share of China's total global trade last year was only 0.25%. China’s trade with the world reached $6.308 trillion in 2022, of which US$3.593 trillion was the share of the country's exports and US$2.715 trillion was related to imports. China's global trade grew by 4.4% last year.

China is one of Iran’s main trade partners that has maintained strong trade ties with the Islamic Republic despite the strict U.S. sanctions.

Iran and China officially signed the document for 25-year comprehensive cooperation in March 2021.

The document was signed between Iran’s former Foreign Minister Mohammad Javad Zarif and Chinese Foreign Minister Wang Yi at the Iranian Foreign Ministry.

Back in December 2022, Iran and China finalized 16 memorandums of understanding (MOU) under the framework of the two countries’ strategic 25-year agreement.

The MOUs were signed in an Iran-China comprehensive cooperation program summit which was held in Tehran on December 13 in the presence of Iran’s First Vice President Mohammad Mokhber and China’s Vice Premier Hu Chunhua.

The summit was focused on four areas explored by four committees between the two countries with the aim of paving the way for the implementation of the 25-year agreement.

 

 

Bulgaria: Newest customer of Iranian oil

The Eurostat, European Union statistics office announced the import of Iranian oil by three European Union (EU) members in 2022, and introduced Bulgaria as the newest customer of Iranian oil in this union, IRNA reported on Sunday.

The information published by Eurostat shows that the European Union imported 4,181 tons of crude oil or oil products from Iran last year.

Although the amount of EU oil imports from Iran is not a significant figure, it indicates the desire of European refineries to ignore the US sanctions against Iran, and the inclusion of these figures in the official European oil import statistics shows the desire of the European authorities to distance themselves from the sanctions, or at least showing their objection to the US sanctions policy against Iran.

Iranian President Ebrahim Raisi has said that the oil and gas sector experienced a growth of 9% in the past Iranian calendar year 1401.

Oil Minister Javad Oji has recently said that a new record high will be reached in the country’s oil export in the current Iranian calendar year.

The country’s oil export in 1401 was 83 million barrels more than that of 1400 and 190 million barrels more than the export in 1399, the minister announced.

Underlining that now oil export has reached the highest figure in the last two years, the official said, “Considering that the Oil Ministry is one of the main providers of the country's foreign currency; in the 13th government, despite the tightening of cruel sanctions, fortunately, thanks to the grace of God and the efforts of our colleagues in the country's oil and gas industries, there are good records in the field of exporting crude oil, gas condensate, and petroleum and petrochemical products.”

Despite the negative impacts of the US sanctions, Iran has been ramping up its oil production and exports over the past few months.

In his remarks in November 2022, President Raisi highlighted the failure of the enemy’s policy of maximum pressure, saying the country’s oil export has reached the pre-sanction levels.

Back in January, the US Energy Information Administration (EIA) in a report put Iran’s average oil production in 2022 at 2.54 million bpd, 140,000 bpd more than the previous year.

Iran's oil production in 2021 was about 2.4 million bpd.

 

 

United States targets Chinese and UAE firms

According to a Reuters report, the United States on Monday imposed sanctions on Chinese and other firms it said helped to sell tens of millions of dollars' in Iranian oil and petrochemical products to East Asia as it seeks to raise pressure on Tehran to curb its nuclear program.

The US Treasury and the US State Departments have imposed sanctions on a total of six companies, four based in Hong Kong, one in Singapore, and one in the United Arab Emirates (UAE) in actions that were announced in separate statements.

The Treasury accused Persian Gulf Petrochemical Industry Commercial Co. (PGPICC), one of Iran's largest petrochemical brokers, of using the firms to facilitate the sale of Iranian petroleum and petrochemical products to East Asia.

The Treasury targeted UAE-based Blue Cactus Heavy Equipment and Machinery Spare Parts Trading, which it said helped sell millions of dollars of Iranian-origin petroleum products to Hong Kong-based Triliance Petrochemical Company, which has previously been sanctioned by the United States.

It also targeted Hong Kong-based Farwell Canyon HK and Shekufei International Trading Company for facilitating such sales for onward shipment to buyers in East Asia.

The Treasury accused PGPICC of using the firms' bank accounts, along with those of Hong Kong and Malaysia-based PZNFR Trading, to collect millions of dollars in proceeds.

Separately, the State Department sanctioned Singapore-based Pioneer Ship Management for allegedly managing a vessel that carried Iranian petroleum products and Hong Kong-based Golden Warrior Shipping Company, for alleged transactions related to Iranian oil and petroleum products.

The actions freeze US-based assets and generally bar Americans from dealing with them. Others that engage in certain transactions with the targeted firms also risk being sanctioned.

The steps represent the third round of US-Iran related sanctions against Chinese firms in the last two months.

Since taking office in 2021, US President Joe Biden has been loath to sanction Chinese entities engaged in oil trade with Iran due to hopes of securing an agreement to revive the 2015 Iran nuclear deal.

Efforts to resurrect the deal - under which Iran had curbed its nuclear program in exchange for relief from US and other sanctions - have so far failed, leading Washington to look for other ways to increase pressure on Tehran.

"The United States continues to pursue the path of diplomacy to achieve a mutual return to full implementation of the Joint Comprehensive Plan of Action," the Treasury's Under Secretary for Terrorism and Financial Intelligence, Brian Nelson, said in the statement, referring to the 2015 deal by its formal name.

"Until such time as Iran is ready to return to full implementation of its commitments, we will continue to enforce sanctions on the illicit sale of Iranian petroleum and petrochemicals."

Reacting to the new sanctions, Iran's Foreign Ministry spokesperson Nasser Kanaani said in a statement that Iran will respond decisively and firmly to the White House's continuation of sanctions.

Iraq clears US$1.6 billion Iranian debts

Both, Iran and Iraq have announced that Baghdad has cleared its debts to Iran after months of talks over how to move forward with the financial issue. The move came after intensive diplomacy between Iran and Iraq.

A few weeks ago, Iranian Ambassador to Iraq Mohammad Kazem Al Sadeq met with the Governor of Iraq’s Central Bank Mustafa Ghaleb Mokhif in Baghdad to discuss ways to clear Baghdad’s gas and electricity debts to Iran.

During the meeting, they discussed aspects of banking and economic cooperation between the two countries, the payment of financial dues from Iraq, and overcoming the obstacles facing the work of Iranian companies in Iraq.

The repayments of Iraq’s debts faced two major problems: first, the Iraqi Parliament’s delay in approving the country’s fiscal budget and Second, US unilateral sanctions on Iran. 

Iraqi Prime Minister Mustafa al-Kadhimi had sought to find a solution to both issues. He said, “One of the problems that caused the delay in the payment of dues to Iran is the absence of the budget.” 

It seems that this issue has been resolved in recent weeks. Al-Kadhimi said Iraq’s debts date back to before 2020. Al-Kadhimi had cleared the responsibility of his government, which was formed in May 2020, from Iran's gas debt, amounting to about US$1.6 billion. He said, “There are no debts owed by the current government regarding Iranian gas.”

Iraq’s Electricity Ministry echoed a similar point in its statement announcing the repayment of debts. “The ministry announces the start of the payment procedures that will be completed within the next two days, bearing in mind that the issue of financial obligations towards neighboring Iran is one of the problems carried over by previous governments, and the current government has borne it, by heading towards internal borrowing to pay off debts, which were not paid due to the scarcity of financial allocations resulting from not approving the budget for that year,” it said. 

After much bickering, Iraq paid its debts to Iran and Tehran confirmed that it received its money from Iraq. 

Iranian Oil Minister Javad Oji announced that Iran had received US$1.6 billion in arrears for gas exports to Iraq. 

“In light of the active energy diplomacy, and after several months of negotiations, we received, hours ago, US$1.6 billion in arrears due from past years regarding gas exports to Iraq,” Oji wrote on Twitter. 

“Since the beginning of current Iranian year, as compared to the same period last year, the country's gas exports have increased by 25%, and the receipt of hard currency earnings from it has increased by 90%,” he added. 

Iraq relies on Iranian gas to operate electric power plants. Earlier, the Iraqi Minister of Electricity Adel Karim announced that Iraq needs Iranian gas for 5-10 years while confirming the ministry’s agreement with the Iranian side to supply the country with 50 million cubic meters of gas per day.

The repayment of Iraq’s debts to Iran came at a time when US unilateral sanctions against Iran are still in place. This may be the reason why some analysts underlined the need for South Korea to follow in the footsteps of Iraq. South Korea owes Iran US$7 billion in oil debts and has been reluctant to clear its debts. Iran has called on Seoul to pay its debts but the Iranian demand has fallen on deaf ears. 

South Korea has linked the repayment of debts to the outcome of talks in Vienna over reviving the 2015 Iran nuclear deal, officially known as the Joint Comprehensive Plan of Action (JCPOA).

Iranian Foreign Ministry spokesman Saeed Khatibzadeh pointed to South Korea’s stonewalling in his Monday presser. “A new government has come to power in South Korea and they have made promises that they want to pay off Iran's debt, but we have not seen any move,” he said.

Khatibzadeh noted, “We are waiting to see the difference between the new government and the previous non-compliant government in terms of debt repayment.”

He then appeared to compare South Korea with Iraq. “We give the new Korean government time to show in practice what it is doing to repay its debts, like the friends we had in the region,” he said. 

 

Hezbollah to arrange Iranian fuel for Lebanon in defiance of US sanctions

An Iranian fuel shipment arranged by Hezbollah for Lebanon is likely to sail on Thursday. The Group has cautioned its US and Israeli foes against any moves to halt the consignment aimed at easing an acute fuel crisis in Lebanon.

Hezbollah's opponents in Lebanon warned the move could have dire consequences. Saad al-Hariri, a former prime minister, said it risked sanctions being imposed on a country whose economy has been in meltdown for nearly two years.

Israeli military spokesman Lieutenant Colonel Amnon Shefler declined to comment on whether Israel would take any military action to stop the shipment, but called it part of an Iranian scheme to export its revolution and promote its proxies.

The arrival of the Iranian fuel oil would mark a new phase in the financial crisis which the Lebanese state and its ruling factions, including Hezbollah, have failed to tackle even as fuel has run dry and shortages have triggered deadly violence.

There was no comment from the Lebanese government on the announcement made by Hezbollah leader Sayyed Hassan Nasrallah.

The US ambassador to Lebanon, Dorothy Shea, told Al Arabiya English that Lebanon didn't need Iranian tankers, citing "a whole bunch" of fuel ships off the coast waiting to unload.

The United States was in talks with Egypt and Jordan to help find solutions to Lebanon's fuel and energy needs, she said, speaking hours after Hezbollah's announcement.

Marking the biggest threat to Lebanon's stability since the 1975-90 civil war, the financial crisis has hit a crunch point, with hospitals and other essential services being forced to shut or scale back due to power cuts and the acute scarcity of fuel.

Fuel shortages have worsened since the central bank said last week it would no longer finance the imports at heavily subsidized exchange rates. The government has yet to raise official prices, however, leaving shipments in limbo.

Nasrallah said further Iranian shipments would follow to help the people of Lebanon.

"I say to the Americans and the Israelis that the boat that will sail within hours from Iran is Lebanese territory," Nasrallah said, suggesting that any action to stop it would be met with a response.

"We don't want to get... into a problem with anyone. We want to help our people," he said in a televised address.

Iran's semi-official Nournews said the fuel was all purchased by a group of Lebanese Shi'ite businessmen.

"The shipments are considered their property from the moment of loading," said the news website, which is close to Iran's Supreme National Security Council.

In June, Nasrallah said Iran was prepared to accept payment in the Lebanese currency, which has lost more than 90% of its value in two years.

US sanctions on Iran, reimposed in 2018 when then-President Donald Trump withdrew from a 2015 nuclear deal with Tehran, aimed to cut its oil sales to zero.

Hezbollah, founded by Iran's Revolutionary Guards in 1982, is also targeted by US sanctions.

Nasrallah did not say when or where the shipment would dock. One possibility is in neighboring Syria, where Reuters reported in April the group was readying fuel storage capacity as part of plans to respond to the crisis.

Hariri criticized Nasrallah for declaring the ships Lebanese territory, rejected what he described as Lebanon being treated as an Iranian province, and said the country could suffer the fate of Venezuela, which is under heavy sanctions.

Samir Geagea, a Christian politician and Hezbollah opponent, said that having usurped government authorities in security and military affairs, the group was now taking over economic decision-making to the detriment of the Lebanese.

Pakistan Prime Minister calls for lifting sanctions on Iran to combat coronavirus

Prime Minister Imran Khan, in an interview with Associated Press has called for lifting of sanctions on Iran to enable it to combat coronavirus.

In a call for action from the international community, Imran Khan said it was time to end US sanctions on Iran, where one of the worst coronavirus outbreaks in the world has unfolded. 

Iran has struggled to respond in part because of crippling sanctions imposed by the Trump administration.

Khan further added that Iran is a “classic example” of a place where the humanitarian imperative to contain the outbreak outweighs political rivalries or economic dogmas.   

The prime minister said he fears the new coronavirus will devastate the economies of developing nations and warned richer economies to prepare to write off the debts of the world’s poorer countries. 

“It’s not just Pakistan. I would imagine the same in India, in the subcontinent, in African countries,” the prime minister said, referring to the virus, “If it spreads, we will all have problems with our health facilities. We just don’t have that capability. We just don’t have the resources.”