The U.S. withdrew from the 2015 Iran accord last year and re-imposed sanctions. In recent weeks, Iran and Britain have seized a tanker each. Those actions add pressure to the 2015 accord. Iran also admits breaching restrictions on its production of enriched uranium.
Amid reports that Iran has seized 2 vessels near the Strait of Hormuz oil prices have remained remarkably stable. Last weekend there were talks in Vienna between Iran and nations of the EU, China and Russia. The Iranians called the atmosphere “constructive” for whatever that may mean.
The aim of the meeting was apparently to ease recent tensions. The Iranians hope to keep the 2015 agreement alive. Earlier this month, the UK, French and German leaders had issued a joint statement. They said their countries were deeply troubled by events in the Gulf. The EU nations said it was time to act responsibly. It is time to seek a path to stop the escalation of tensions. That is diplomatic speak for let’s appease Iran.
The diplomatic dance…
Interestingly, China’s representative said all parties had “expressed their commitment to safeguard the JCPOA and… expressed their strong opposition against the US unilateral imposition of sanctions.”
Iran pushed to activate a barter system developed by the Europeans. Under the barter system they would be able to trade with Iran without violating U.S. sanctions. Iran noted the system is not functioning yet, but it is in the final stages of development.
The head of Iran’s Atomic Energy Organization said Iran will restart activities at the Arak heavy water nuclear reactor. Western powers have said Iran’s nuclear ambitions must be curbed. The concern is that Tehran intends to build nuclear weapons. That is a point which Tehran denies; though they have no other explanation for the Arak facility.
Something to think about…
This activity is important for two reasons. It shows our “allies,” the EU nations working with countries currently not friendly to American interests. This demonstrates the EU is actively working to diminish the importance of America’s position as the dominant world reserve currency. When you think about the amount of debt America carries ask yourself if this activity reduces your comfort level.