Friday, January 13, 2012

Madness: The U.S. Sanctions Firms in China, Singapore and UAE Over Iranian Oil

The US government on Thursday sanctioned energy trading firms Zhuhai Zhenrong of China, Kuo Oil of Singapore and FAL Oil of UAE for doing business with Iran's energy sector.

The action bars the companies from receiving US export licenses, US Export Import Bank financing and loans worth more than $10 million from US banks, the State Department said in a press release.

The State Department said Zhenrong brokered the delivery of more than $500 million in gasoline to Iran between July 2010 and January 2011.

Kuo of Singapore sold more than $25 million in refined products to Iran between late 2010 and early 2011, the State Department said.

FAL provided more than $70 million in refined petroleum to Iran over multiple shipments in late 2010, the US said.

All three companies struck deals that exceeded the $1 million threshold under US law, with annual transactions exceeding the $5 million threshold for a 12-month period, the State Department said.

The State Department stressed that the sanctions target the companies, not their governments.

Free trade is likely the only thing keeping the Strait of Hormuz open. If the U.S. government becomes successful in preventing the sale of oil by Iran, the economic incentive to keep the strait open disappears for Iran and the U.S. sticks another finger in the eye of the country.

During Treasury Secretary Geithner's recent trip to Asia, he was able to get Japan to agree to reduce shipments from Iran. However, Geithner was unable to get such an agreement from China. China's unwillingness to go along with the mad plan of the U.S. government may be one of the few threads keeping the strait open.


  1. Bob,

    Remember my review of King of Oil? Marc Rich built part of his wealth on subverting previous economic sanctions and oil embargoes, establishing a trade network of Iranian oil w/ Israel and getting oil to the apartheid state of South Africa.

    The "embargo" and sanctions will be in name and official status only. Some willing entrepreneurs and connected operatives working behind the scenes will ensure the oil still gets sold, albeit it at a much higher and more profitable black market price.

  2. Sounds like an act of war...the U.S. will keep putting more and more sanctions, until Iran (or China) strikes first. Then the U.S. will be "justified" into going to another endless, bankrupting war.

    We are screwed...

  3. I bet you as I write this some entrepreneur out there is finding ways to get Iranian oils onboard ships headed to Europe and USA.

    After the sanctions are over he'll have made hundreds of millions just like Marc Rich did when the Arabs themselves impeded oil trade in the 70s.

  4. Notice the direction and products the announced sanctions represent. They all involve shipping refined petroleum products INTO Iran.

    Iran has limited refining capacity. The purpose of these sanctions is to cripple Iran's economy and to immobilize its people.

    It could well be that the war party considers it to be easier to goad Iran into a war by choking off its imports of refined petroleum products than by limiting its crude exports.

  5. Sanctions are just another way to start a war as Dr. Paul explains. This is truly insane

  6. Seems similar to FDR's policies towards Japan. Pretty common practice to make the other side take the first shot. BTW, why don't these oil producing nations build their own refineries? Nigeria is in the news suffering from the same problem.