Sunday, January 27, 2013

27-Jan-13: Developing: Iran, its nuclear plans and the oil industry

Following the revelations made this weekend by an Iranian diplomat who defected to the West and who has blunt things to say about what the regime in Tehran plans to do with nuclear technology, it's hard to ignore an important business story - an exclusive - from Reuters that went out on the news wire on Friday.

First, if you have not yet seen it, please read what the Iranian diplomat, his country's consul in Oslo, disclosed: "27-Jan-13: Tehran insider reveals what the Iranians really mean to do with their nuclear program". With his disturbing disclosures in mind, along with what we know about Iran's deep investments in terrorism ["21-Jul-12: How involved in terror against Israelis and Jews are the Iranians?"], here is what Reuters reported on Friday.

Exclusive: Samsung Total strikes Iran oil deal, lured by cheap fuel - sources
Reuters | Fri, Jan 25 2013South Korea's Samsung Total Petrochemicals Co has revived a contract to buy Iranian oil after a year's hiatus, as thin margins in plastics make the cheap fuel from Iran hard to resist... Samsung Total stopped importing oil from Iran last year as the U.S. and European Union imposed sanctions to halt a nuclear program the West suspects Iran may be using to develop arms. Tehran denies this. To comply with U.S. sanctions, importing countries are required to reduce purchases of Iranian oil.
Co-owner Total also stopped buying Iranian oil for its refineries to comply with EU sanctions last year...
Stringent U.S. and European sanctions aimed at reducing Iran's oil income and forcing Tehran to curb its nuclear program have made shipping and paying for the oil hard, halving the Islamic Republic's crude exports. The deal is a rare example of a buyer returning to the market for Iranian oil despite the obstacles arising from sanctions and efforts by Western powers to stem the flow. After jarring interruptions in exports from Iran last year that included a halt in shipments to top consumers Japan and South Korea, importers have found ways to keep oil flowing without violating sanctions. The allure of cheap oil and improved margins has made it worthwhile for the South Korean joint venture between two big international firms to find ways around difficulties. The deal may save Samsung Total as much as $6.7 million in costs, according to Reuters calculations...
Replacing the Iranian oil forced up Samsung Total's input costs, contributing to a fall in operating profits...
"The deal can be easily understood if you look at Samsung Total's financial situation," according to a government source in Seoul with direct knowledge of the matter.
It's not only the South Koreans who are doing quiet deals with the Iranians. Samsung Total Petrochemicals Co is a joint venture between Samsung Group and energy giant Total of France. "Spokespeople at Total, Samsung Total and the Samsung Group declined to comment", says Reuters.

There are probably some buyers of consumer electronics, cell phones and tablet computers out there who may be thinking about Samsung's actions the next time they place an order.

Meanwhile, the Iranians have been cooking up some deal announcements of their own. In the past few hours, Fox News said the Iranian oil ministry announced that
all crude oil and gas exports have been banned to the 27-nation European Union, which has already imposed its own boycott on Iranian energy imports as part of sanctions over Tehran's nuclear program... Sunday's announcement by spokesman Ali Reza Nikzad Rahbar could be a symbolic act designed to reflect anger at Western unity over economic pressures on Iran. The semiofficial Mehr news agency quotes Rahbar as saying the Iranian ban will remain as long as "hostile decisions" are made by the EU.

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