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Iran on the brink… of what?

Posted by Richard Friday, November 12, 2004

Call it cowardice if you like, but we’ve been avoiding covering the continuing saga of Iran, and the EU intervention – perhaps not consciously, but with a certain sense of weariness that it's all to much to take on board.

However, not that the situation seems to be coming to a head – or not – we can retail a Reuters report that Iran looks likely to accept a deal brokered by the EU, suspending potentially weapons-related nuclear work in return for avoiding UN Security Council referral.

The International Atomic Energy Agency (IAEA) has told Iran it must inform it of its intention to suspend key nuclear activities, including uranium enrichment, by today if it is to be included in a report by IAEA chief Mohamed ElBaradei due to be circulated to IAEA board members on Friday.

Iranian officials said earlier on Thursday the Islamic state's clerical leadership was still grappling with the question of whether to accept the EU deal. Foreign Ministry spokesman Hamid Reza Asefi said there were some "problems" with the agreement.

Western diplomats said Iran was pushing for some tangible benefits, such as the immediate resumption of EU trade talks, in return for agreeing to suspend nuclear fuel cycle work.
Iran, of course, denies US accusations it is seeking nuclear arms. It says its atomic ambitions are limited to producing electricity from nuclear power reactors.

What any intelligent person might be asking about all this is why Iran, with some of the largest reserves of oil and gas in the world, needs to consider using nuclear power for its electricity generation.

Furthermore, understanding Iran’s motives are further complicated by the recent signing of a mega-gas deal between Beijing and Tehran worth $100 billion. Billed as the "deal of century", this agreement is likely to increase by another $50 billion to $100 billion, bringing the total close to $200 billion, when a similar oil agreement, currently being negotiated, is signed in the near future.

The gas deal entails the annual export of some 10 million tons of Iranian liquefied natural gas (LNG) for a 25-year period, as well as the participation, by China's state oil company, in such projects as exploration and drilling, petrochemical and gas industries, pipelines, services and the like. The export of LNG requires special cargo ships, however, and Iran is currently investing several billion dollars adding to its small LNG-equipped fleet.

No doubt this deal has its larger political ramifications as it has united two players, if only in trade, which are hostile to the US. And, with Israel cast as a US "client state", there was always a possibility of Israel repeating its tactics against Iraq's French-built Osirak reactor in 1981, when an air strike took out the facility before it became operational, which may have promoted the current alliance.

Altogether, this is a messy, muddy story, in an unhappy, troubled area of the world but, now that we have broken the ice, so to speak, it is one to which, no doubt, we will return.