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Tim Daiss

Tim Daiss

I'm an oil markets analyst, journalist and author that has been working out of the Asia-Pacific region for 12 years. I’ve covered oil, energy markets…

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Iran Warns North Korea About The United States

Now that the much-anticipated meeting between President Donald Trump and North Korean leader Kim Jong Un in Singapore fades from the news cycle, giving way to a myriad of analysis from seemingly all corners, Iran is giving its take on the historic meeting of the two leaders.

Iranian Foreign Ministry Spokesman Bahram Qassemi said in press conference that “Iran wants peace and stability on the Korean peninsula. Iran welcomes any steps toward peace in the welfare of the people.”

“But given the past record of the U.S. and President Donald Trump who has violated international treaties, especially the 2015 nuclear deal, Iran remains deeply pessimistic about Trump’s intentions. North Korea should act with caution. The nature of the U.S. government is not such that one can be optimistic about it.”

Iran’s comments over the summit between Trump and Kim come as the commencement of renewed U.S. sanctions against the Islamic Republic nears, which could remove as much as 500,000 barrels of Iranian oil per day, perhaps more, from world markets. Moreover, there is a ticking clock involved that Tehran has to worry about.

On May 8, Trump’s executive order over Iran’s nuclear development started a 180-day countdown timer for the White House to re-impose all of the sanctions on Iran that were relaxed under the Obama-era deal reached in 2015.

Searching for allies

Since May 8, Tehran first turned to the EU for help to nix the impact of any renewed U.S. sanctions imposed unilaterally by Washington. However, with many EU members either unwilling or unable to risk backlash from Washington, Iran then turned to OPEC for help, asking the 14-member oil producing cartel to support it against what Iran’s Oil Minister Bijan Zanganeh called “illegal, unilateral and extraterritorial sanctions,” a reference to U.S. interference. Related: Oil Prices Rebound On Crude, Gasoline Inventory Draws

The problem for Iran in seeking help from a unified OPEC is arch-rival and de facto OPEC leader Saudi Arabia who, along with the U.S., is trying to minimize Iran’s influence in the region. Any help from OPEC over U.S. sanctions, therefore, is off the table.

North Korea hails historic summit

Moreover, Iran’s words of advice for Pyongyang seem to have been muted in North Korea, which has hailed the Trump-Kim meeting as a win for the Kim regime, but also praising Trump in the process.

"Thanks to the fixed decision and will of the top leaders of the two countries to put an end to the extreme hostile relations between the DPRK [North Korea] and the US -- which lingered for the longest period on the earth in terms of acute confrontation -- and to open up a new future for the sake of the interests of the peoples of the two countries and global peace and security, the first DPRK-US summit was held," North Korean media said in a television broadcast after the summit.

After giving a detailed account of the Singapore meeting, North Korean state-run media outlet Rodong Sinmun said the summit met “with success amid enthusiastic support and welcome of the whole world come to be a great event of weighty significance in further promoting the historic trend toward reconciliation and peace, stability and prosperity being created in the Korean Peninsula and the region and in making a radical switch over in the most hostile DPRK-U.S. relations, as required by the developing times.”

In its first report on the summit, the official KCNA news agency said on Wednesday that the apparent breakthrough in relations to Kim's "proactive peace-loving measures" earlier in the year. The news agency also applauded Trump's willingness to negotiate despite longstanding hostility between the two countries.

Iran’s quandary

However, while more work remains to be done to see that any initial agreement between Trump and Kim will be furthered, Iran will have a more difficult time appeasing Trump.

On June 12, the same day as the summit in Singapore, Trump said that he’d soon like a “real deal with Iran.” He added, "I hope that, at the appropriate time, after the sanctions kick in — and they are brutal what we've put on Iran — I hope that they're going to come back and negotiate a real deal because I'd love to be able to do that but right now it's too soon to do that.”

Also, in another part of the geopolitical triangle between the U.S., Iran and North Korea, it remains to be seen if the U.S. will press North Korea over its alleged military ties with Iran, a potential sticking point for further negotiations between Washington and Pyongyang. Related: Can Saudi Arabia Prevent The Next Oil Shock?

In August, Kim Yong Nam, chairman of the Supreme Assembly of North Korea, spent 10 days in Iran meeting with both Iranian President Hassan Rouhani and top officials to further ties. However, media in the U.S. also said the meeting could have been a cover for the two sides strengthening military cooperation. The meeting between Iran and North Korea was also likely an attempt by Pyongyang to ease the impact of U.S.-led sanctions by increasing bilateral trade and assistance between the two fledgling nuclear powers.

Now that the lifting of U.S. sanctions from North Korea is a possibility, this dynamic could also isolate Iran further as it seeks allies anywhere it can to battle American hegemony.

Enter U.S. oil

Another outcome of the Trump-Kim meeting is the possibility of U.S. crude oil exports to North Korea. Part of U.S.-led sanctions against North Korea over its nuclear development include fuel imports, intended to hit the country’s economic growth and potentially make it want to give up its nuclear plans for sanctions relief – a strategy that may be unfolding. While U.S. oil shipments to North Korea could arguably be a long way off, just the possibility could help insure a sustained pivot between the two historic adversaries.

By Tim Daiss for Oilprice.com

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  • Mamdouh G Salameh on June 14 2018 said:
    Iran is well placed to warn North Korea about dealing with the United States having seen how US President Trump walked away from the Iran nuclear deal on the 8th of May 2018 without even suggesting any amendments to it or providing any justifications for how Iran was violating the nuclear accord. In fact, the IAEA confirmed on May 9 that Iran is in compliance with its nuclear commitments.

    Even without Iran’s warning, North Korea has fully learnt the lessons of Iraq and Iran. The Iraq lesson is that Saddam Hussein would have been still in power if he had nuclear weapons. The Iran lesson is an eye-opener for Kim Jung Un strengthening his instinct not to trust any future agreement with the United States and also not to relinquish any of his nuclear weapons.

    The lesson of history is that since the Second World War no country which acquired nuclear weapons has ever thought of relinquishing them. North Korea is never going to be the exception.

    The summit was a golden opportunity for the North Korean leader to bask in the international limelight having met the president of the United States on equal terms. President Trump might get some credit for de-escalating tension between his country and North Korea. But that is all.

    While Kim Jong Un pledged to work towards denuclearization, this in no way means that he will give up his nuclear weapons. He will drag the United States in negotiations for years while seeking the lifting of US sanctions against his country, secretly perfecting his nuclear arsenal and also getting massive financial aid from South Korea.

    It is my view that Kim Jung Un will draw most of the benefits from the summit after which the crisis between the United States and North Korea will be back at square one exchanging threats and escalating tension.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • John Kessinger on June 15 2018 said:
    Excellent analysis by Mr. Salameh. I agree wholeheartedly.

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