Ending Iran Sanctions Could Push Down Oil Prices

Analyst: Ending Iran Sanctions Could Push Down Oil Prices

Iran’s economy has been hammered by a series of sanctions that have pushed it into recession, slashed the value of its currency, sparked soaring inflation, and hurt its oil sector.

If and when Iran works out a deal with the United States and other nations to limit its nuclear program, some of those sanctions will end.

One economic expert said the end of sanctions could bolster growth in some of Iran’s neighbors and push global oil prices down further.

Peterson Institute for International Relations scholar Gary Hufbauer said ending sanctions could cut oil prices from their current $50 a barrel range to around $35 per barrel.

Crude prices

Hufbauer said after sanctions, Iran could boost production by half a million barrels a day in a few months, and the additional supply could put downward pressure on crude prices worldwide.
While that would not be a large percentage of the approximately 90 million barrels of oil a day consumed by the global economy, Hufbauer said the market is oversupplied right now and is sensitive to additional supplies.

But U.S. Treasury Secretary Jacob Lew said it is a “myth” that Iran’s economy would “instantly recover” because sanctions have pushed it into a “deep hole.”

Lew said sanctions have cost Iran “over $160 billion” in oil revenue since 2012.

The gross domestic product shrank 9 percent in the two years ending in March 2014, and is “15 to 20 percent smaller” than it would have been otherwise.

Lew said Iran needs “half a trillion dollars” in domestic investment.

The U.S. Congressional Research Service said sanctions cut Iran’s oil exports by half, and falling oil prices cut revenue in half again.

Value of currency

The economic problems caused the value of the Iran’s currency, the rial, to fall about 56 percent on unofficial markets, and inflation is estimated to have hit 50 percent at one point.

The departure of a number of foreign oil firms has reduced Iran’s access to the technology needed to update its oil industry, crimping the long-term outlook for the sector.

Sanctions also hurt efforts to modernize Iran’s non-oil industrial sector by blocking access to imported parts and materials.
That is one reason that Peterson Institute scholar Hufbauer said opening up Iran’s economy could provide a welcome boost to business in nearby nations in a region with many troubled economies.

He said the sanctions effort aimed at Iran was effective because of an unusual level of cooperation among other nations.

Also, he added Iran’s economic troubles created the political pressure that prompted the nation’s leaders to bargain with the United States and other nations.


Serbia Protests Attack on PM at Srebrenica Ceremony 

Serbia is protesting an attack Saturday on its prime minister at a ceremony marking the 20th anniversary of the Srebrenica massacre, calling it an "assassination attempt" and demanding a formal apology from Bosnia-Herzegovina.

The attack came moments after Prime Minister Aleksandar Vucic entered a cemetery near the enclave to lay flowers commemorating the slaughter of 8,000 Muslim men and boys by Bosnian Serbs toward the end of the 1992-95 war.

Vucic, once a Serbian ultranationalist who supported Bosnian Serbs in the conflict, attended the ceremony in an apparent gesture of reconciliation.  Both he and his entourage were bombarded with stones and other objects. The prime minister escaped the scene with broken eyeglasses and minor facial injuries.  

The Muslim Bosniak mayor of Srebrenica, Camil Durakovic, said he was "deeply disappointed and I truly apologize to Prime Minister Vucic for what he experienced."

Council of Europe Secretary General Thorbjorn Jagland condemned the attack.

The ceremony in Potocari "should have been a place for reflection, reconciliation, not violence," Jagland said.

Former U.S. President Bill Clinton and other world dignitaries also attended the ceremonies and laid flowers at the memorial without incident.

"I grieve that it took us so long to unify ... to stop this violence," said Clinton, who was in office at the time of the massacre.

Clinton said before the attack on Vuvic: "I want to thank the prime minister of Serbia for having the courage to come here today, and I think it is important that we acknowledge that."

Authorities billed Vucic's presence as a measure of how much the region has healed since the breakup of the former Yugoslavia and the outbreak of war that gripped the region in its aftermath.

But the visit came just days after the Vucic government asked ally Russia to veto a United Nations resolution that would have condemned Serbia for insisting that the killings did not qualify as genocide.

Saturday's memorial ceremonies, attended by tens of thousands of mourners, came ahead of the burial of 136 newly identified victims of the killings — the worst mass killings on the European continent since the end of World War II. Thousands more victims already are interred at the Potocari Memorial Cemetery outside Srebrenica.

On July 11, 1995, Bosnian Serb forces overran the U.N. enclave at Srebrenica, which was nominally protected by Dutch troops, and launched days of bloodshed. Serbs dumped their victims in mass graves around Srebrenica in an effort to hide the magnitude of the slaughter.

In a statement, President Barack Obama said the world "can offer no solace that fully addresses the pain borne by the victims’ families. But we must look back at Srebrenica with clear eyes, commemorate the tragedy and learn from it."

The Dayton Accords brokered in the 1990s by U.S. negotiators formally ended the Bosnian war, which claimed 100,000 lives.

WATCH: Serbian PM Attacked at Srebrenica Event


Some US Locales Cool to Same-Sex Marriage Ruling 

The U.S. Supreme Court’s ruling legalizing same-sex marriage has sparked a furious backlash in some conservative states across the country.

While most state and county governments followed the ruling, some county clerks have stopped issuing marriage licenses or even quit their jobs in apparent defiance of the high court’s decision.

In Texas, Governor Greg Abbott accused the Supreme Court of abandoning its role as an impartial judicial arbiter and turning itself into a non-elected legislative branch where five of the nine justices imposed their personal views onto the entire country.

Religious rights

In his state, Abbott said citizens’ religious rights continued to be protected. He has issued a directive to state agencies instructing them to prioritize the protection of Texans’ religious liberties.

Many citizens said same-sex marriage is in conflict with their religious beliefs.

Texas Attorney General Ken Paxton also told those county clerks who have refused to issue marriage licenses to same-sex couples that numerous lawyers were ready to assist them in any litigation to defend their religious beliefs.

In Kentucky, Casey County Clerk Casey Davis made himself an overnight media star as well as a hate mail target when he refused to issue marriage licenses to same-sex couples who have come to his courthouse.

Davis said he had stopped issuing marriage licenses to all couples following the U.S. Supreme Court's ruling that legalized same-sex marriage.

Earlier in the week, Davis tried to meet with Democratic Governor Steve Beshear to ask him to call for a special session of the state legislature so it can pass a law allowing people to purchase marriage licenses online instead of going to the courthouse, similar to the process of purchasing a hunting or fishing license.

'My conscience'

Davis told VOA that although he took an oath to perform the office of county clerk to the best of his ability, but that ability should not go beyond his conscience.

“My conscience does not stop with the issuance of marriage licenses; my conscience is included in every decision that I make, whether I’m at work or whether I’m at home, trying to raise my family,” he said. “My ability is governed by my conscience."

Davis argued that the Supreme Court’s decision on same-sex marriage left out the rights of the people who didn’t agree with same-sex marriage.

"Somewhere along the line, someone needs to say ‘Hey, I still have rights. I don’t mind you having yours. But would you please give me the same courtesy and give me mine?’ ” he said.

Davis said he believed “the First Amendment of the Constitution of this nation put religious freedom there because if we lose that (freedom), we’ve lost everything.”


In Mississippi, a Grenada County circuit clerk did not want to be responsible for issuing marriage licenses to same-sex couples and chose to resign after serving in that office for 24 years, saying that the Supreme Court ruling violated his core values as a Christian.

Sam Marcosson, a constitutional law professor at the Louis D. Brandeis School of Law in Kentucky, said clerks who refuse to issue marriage licenses to same-sex couples risk criminal official misconduct charges.

“It’s a misdemeanor, not a serious crime, but it’s a crime,” Marcosson said.

“That would be within the discretion of the prosecutors to bring those charges and begin the prosecution in the county, because as a government official, you have the responsibility to all the citizens to perform the duties of your office, so a potential criminal charge could be filed, if it got to that point,” he said.

Marcosson said judges could also enforce fines that would continue to grow as long as the clerks remained out of compliance with the law.

In the end, the clerks could either quit or be charged.

Marcosson said marriage license issuance is one area "in which the law is not settled from state to state.”

Businesses affected

He also noted that the Supreme court ruling affects business owners as well as government officials.

“In some states, there are nondiscrimination requirements that tell them (business owners) if you are going to be in business, you have to be in business and provide your services to all, whether it’s a same sex couple or opposite sex couple," Marcosson said.

In other states, however, there isn’t such non-discrimination requirement. “They can pick and choose which weddings they will open their business to,” he added.

Amber Duke, communication manager of the American Civil Liberties Union of Kentucky, said three counties in that state are not issuing marriage licenses to any couples.

She noted her agency filed a lawsuit against one of them, Rowan County, and its clerk on behalf four couples: two same-sex couples and two opposite-sex couples who were denied marriage licenses by the county clerk.

Government duty

The lawsuit argued that while the clerk had the absolute right to believe in whatever she wanted, as a government official sworn to uphold the law, she could not pick and choose which duties her office would perform.

“Not only (did) the Supreme Court ruling come out and say that same gender couples have the right to marry, the governor of our state, just a couple of hours after that ruling came out, issued guidelines to all of the clerks in the state and asked them to act immediately, to distribute licenses to same gender couples,” Duke said.

She said the Kentucky state attorney general had also put out statements since the ruling, saying that marriage equality is the law of the land and that county clerks need to follow the law.

“So it’s definitely very clear, and we see no legal justification that any of these clerks has for denying anyone’s marriage license,” Duke added.


Burundi Presidential Election Postponed 

Burundi's presidential election has been postponed by nearly a week after United Nations and African officials warned the vote could spark more violence in the already tense country.

A decree signed by Burundian President Pierre Nkurunziza on Saturday rescheduled the vote from July 15 to July 21.

Nkurunziza’s decision to stand for a third five-year term sparked a failed coup attempt in May and weeks of violent protests. Critics of the president say he is violating term limits established by the constitution and the Arusha Accords that ended Burundi's 12-year civil war, which ended in 2005.

The United Nations' deputy political chief warned Thursday that “Burundi is on the brink again," and said the country faced grave danger because Burundian leaders were putting personal interests before those of the country.

The five-nation East African Community, which had been trying to mediate the disputed elections, had called for a two-week postponement to allow time for additional talks between Nkurunziza’s ruling party and opposition parties.

Meanwhile, government forces have clashed with gunmen in a wooded area on the central African nation's border with Rwanda. The governor of Kayanza province, Canisius Ndayimanisha, said the gunmen crossed from Rwandan territory — an unconfirmed allegation, but one that could fan fears of a widening conflict.

On Friday, the U.S. expressed concern about reports of fighting in Burundi and recently broadcast remarks by Burundians threatening to use force against the government.  

The State Department said in a statement, "We strongly oppose any armed activity or incursions into Burundi and will seek to hold accountable those responsible for gross human rights abuses."


Typhoon Chan-hom Weakens Over Land in Eastern China 

Typhoon Chan-hom has been downgraded and is weakening as it moves inland over eastern China after drenching the coast with more than 10 centimeters (almost 4 inches) of rain.

More than 1 million people in Zhejiang and Jiangsu provinces were evacuated and 30,000 ships were ordered to return to port. One resident who stayed behind said the wind was powerful enough to blow the rain through a closed window.

Chinese officials said this might be the strongest storm to strike the east since the Communists seized power in 1949.

Despite the fierce weather, no deaths or injuries have been reported.

Chan-hom struck China after hitting southern Japan and the northern Philippines.

This was the second powerful storm to make landfall in China in recent days. Typhoon Linfa hit China's southern Guangdong province on Thursday but quickly lost its strength.

voice of America
Ending Iran Sanctions Could Push Down Oil Prices Ending Iran Sanctions Could Push Down Oil Prices Reviewed by Ajit Kumar on 9:46 AM Rating: 5

No comments:

Powered by Blogger.