Wednesday, July 31, 2013

House Approves Tough New Sanctions against Iran

The U.S. House of Representatives today approved - with overwhelming bi-partisan support - new, tough sanctions against Iran. The move is seen as a strong signal by the House to the Iranian government, including the incoming administration of President-elect Hassan Rouhani, that the U.S. will not reduce pressure on the Islamic Republic until it changes course on its nuclear program. 
The Nuclear Iran Prevention Act (H.R. 850) significantly expands U.S. sanctions on Iran by granting the president specific authorization to bar companies from doing business in the United States if they carry out significant trade with Tehran. The legislation expands sanctions to strategic sectors of the Iranian economy not targeted by previous legislation. And the legislation is designed further to dramatically reduce Iran’s exports of crude oil and petroleum condensates.
The bill also stiffens penalties for violations of existing laws. The Senate is also expected to move quickly on its own version of sanctions legislation. 

File photo: Iran’s Kharg Oil Export Terminal (Getty Images)

Influential Kayhan Editor Calls for No-Confidence Vote Against Rouhani’s Ministers

Hossein Shariatmadari, the influential editor of Kayhan, has called on Majlis, the Iranian parliament, to vote against many ministers expected to be nominated by Hassan Rouhani after his inauguration on August 4. The list of proposed cabinet ministers has not yet been officially announced, but Shariatmadaril today wrote in an editorial piece that many of them supported the Green Movement in 2009. He did not disclose their names.

The Kayhan editor is believed to have close links to and speaks for an ultraconservative faction within the Leadership House (Khamenei’s office) that controls the country’s security apparatus. 

“Because there are indications that supporters of Fetneh (Green Movement) are in the list (of proposed ministers), the Majlis should send its greetings (to the new government) through no-confidence votes against those ministers,” wrote Shariatmadari. (Kayhan, 31 July)

File photo: Kayhan’s Editor-in-Chief Hossein Shariatmadari (Kayhan)

Asia’s Iran Oil Imports

Asian buyers reduced their oil imports from Iran to 790,054 bpd in June, down from 1.37 million bpd in the same month last year. In the first six months of 2013, Asian imports fell by 22 percent to 961,127 bpd, Reuters reported today. Since oil sanctions against Iran started last year, oil exports are down 60 percent on average compared to pre-sanction levels.

And in spite of Rouhani’s victory in June presidential election, and only four days prior to his inauguration, the U.S. Congress is set to vote today to toughen the already harsh sanctions against Iranian oil industry, aiming to bring Iranian oil exports to a halt. The move would complicate Obama administration’s strategy to strike a deal with the new Iranian government over the country’s nuclear program.
"There is continuing pressure from the United States to reduce Iranian crude imports," said Robin Mills, chief analyst at Manaar Energy Consulting. "They are coming up with a fresh bunch of sanctions to reduce Iranian crude exports further." (Reuters, 31 July)

Last month, the U.S. government granted its third 180-day waiver on sanctions applied to Asian countries, including India, China and South Korea, for significantly reducing Iranian oil imports in the six months through May. Japan won its third six-month waiver in March. Japan's renewal will come up in September, while the waivers for the other Asian buyers will come up in November-December. The new legislation in Congress would practically stop those waivers.

Iran Air Fokker 100 maintenance at Merhrabad

Iran Air technicians atop wing of Fokker 100 (F-28-0100)  EP-CFM (cn 11394)
Posted 7/26/13 at Iran Air on Facebook

Fokker 100 (F-28-0100) EP-IDA (cn 11292) in front of Iran Air overhaul hangar
Photographed 7/1/13 by Mehrad Watson /

Fokker 100 (F-28-0100) EP-CFL (cn 11343) inside Iran Air's Azadi Hangar
Photographed May 2013 by Mehrad Watson /

Tuesday, July 30, 2013

Israelis and Palestinians Re-Start Peace Talks

Negotiating Final Status Agreement for Two States 

Secretary of State John Kerry said today that Israeli and Palestinian negotiators would convene again in the Middle East within two weeks and that their goal would be to work out a comprehensive peace agreement within nine months. (The New York Times, 30 July)

Kerry described the talks in Washington on Monday and Tuesday as constructive, and said they had involved three-way discussions that included the United States, as well as direct discussions between the Israelis and the Palestinians.

“The parties have agreed to remain engaged in sustained, continuous and substantive negotiations on the core issues,” said Kerry, who was flanked by Tzipi Livni, Israel’s justice minister, and Saeb Erekat, the chief Palestinian negotiator.
“Our objective will be to achieve a final status agreement over the course of the next nine months,” Mr. Kerry said. “We all understand the goal we are working towards: two states living side by side in peace and security.” (The New York Times, 30 July)

Earlier in the day, Mr. Kerry and the Israeli and Palestinian negotiators went to the White House to meet with President Obama and Vice President Joe Biden.
Photo credit: John Kerry with chief negotiators Tzipi Livni of Israel (R) and Saeb Erekat of Palestine. Washington, 30 July 2013. (Reuters)

Iran auto production figures, June 2013

Above: Saipa Tiba / KIA Pride platform 

Below are Iran auto production figures for Khordad 1392 / ~June 2013 (Source: 
(Table: matgasnier at Best Selling Car Blog)

 Additional observations from matgasnier at Best Selling Car Blog: 
The Saipa Pride is back above 20,000 monthly units for the first time so far in 1392 to 20,834, however down 18% on last year. In second place we find the only model in the Top 5 to to enjoy a year-on-year: the Peugeot Pars, basically a 1987 Peugeot 405, is up 9% to 6,336 units and is now also #2 year-to-date at 11,709 units. The Iran Khodro Samand is back up 5 spots on last month to round up the podium at 3,279 units, down 68% year-on-year, and is followed by the Peugeot 405 (-74%) and Renault Tondar 90 (aka Dacia Logan at -55%).
Because at the same time last year they were either still kick-starting their production or had it interrupted, both the Saipa Tiba at #6 and 2,829 units (+131%) and the Iran Khodro Runna at #7 and 1,987 (+3386%) post impressive year-on-year growths, however they remain far from their best monthly volumes. Notice also the Chery MVM315 (aka Fulwin 2) at +434% year-on-year, however the Khordad 1392 production figure is estimated and will be confirmed next month.
Due to sanctions, Iranian car production continues to adjust away from Western and towards Asian model types. Barring a rapprochement with the West, this trend will continue.

Monday, July 29, 2013

Tat Mall in Tehran's District 22, under construction

Massive Tat Center Project will be the largest mall in the Islamic Republic of Iran

Construction equipment sheds and on-site workers' dormitory

Emerging column construction, with huge Monitowoc crawler crane in background

On-site concrete cooling system equipment

Artists's rendering of completed project, aerial view

Artist's rendering of completed Tat Mall facade

Artist's rendering of completed interior view

 Photos: Perlite Construction Co

A few more indicators for Iran's economy

In mainstream media reporting, the two indicators near exclusively cited for Iran's economy are inflation and oil export figures. Below are a few more economic indicators (and projections) provided to give a slightly fuller picture:
-Oil and gas exports initially took a dive in 2012 due to EU sanctions on the purchase of Iranian oil and US sanctions on the Iranian Central Bank, which undermined exports to non-European buyers of Iranian oil. 

-Growing gas and gas condensate exports will be the main factor behind the growth of petroleum exports in the current Iranian calendar year.

-The real success story in Iranian exports is the expansion of the country’s potential in non-oil exports. -The government has set a goal to achieve balanced trade between Iran’s non-oil exports and the country’s imports.

-Based on the latest statistics from the Iran Customs Administration, in the first three months of the current Iranian calendar year, which began on March 21, 2013, the value of Iran’s non-oil exports reached $7.7 billion while the value of imports stood at $9.4 million, i.e., a quarterly non-oil trade deficit of $1.7 billion.

-Taking into account the oil and gas exports, the country [will be] producing a healthy trade surplus. Though severe banking sanctions have impeded the repatriation of export revenues, Iran will develop new mechanisms to repatriate these funds and to boost its economy.

Source: Iran's Pivot to the East by Bijan Khajehpour for Al-Monitor Iran Pulse. For additional commentary, click HERE.

Sunday, July 28, 2013

Ahmadinejad to Build a Technical College

Outgoing Iranian President Mahmoud Ahmadinejad plans to establish a technical college in Tehran after leaving office on 3 August. Named the University of Iranians, the institution will specialize in nuclear engineering, nanotechnology and aerospace. Ahmadinejad received the permit for the college from the Supreme Council of the Cultural Revolution, a government body overseeing higher education in Iran. (IRNA/UPI, 28 July)
Photo credit: Iran's outgoing president Mahmoud Ahmadinejad (L) meets President-elect Hassan Rouhani in Tehran on June 18, 2013. (UPI) 

HPLC Cuts Iran Crude Imports

Mindful of the impact of Western sanctions, India’s biggest oil importer has increased imports from Iraq at the expense of Iranian crude. Hindustan Petroleum Corporation Limited (HPCL) has virtually slammed the door on Iran for crude oil imports during 2013-14.

“Because of the sanctions the U.S. and the European Union imposed on Iran… there is no crude-lifting contract with NIOC for 2013-14,” said a statement by HPLC. (The Hindu, 28 July)
HPLC’s existing contract with Iraq’s State Oil Marketing Company (SOMO) for 2.25 million tons (45,000 barrels a day) of Basra light crude has been revised to 3 million tons (60,000 barrels a day). HPLC has also added a 50,000 barrels a day contract for 2013-14 with Saudi Arabian Oil Company (Saudi Aramco).
File photo: Iran's Kharq Oil Terminal (Getty Images)