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The European Union and US sanctions against Iran, intended to limit its oil exports and put the nation under economic pressure, will soon take full effect. They have been established in an attempt to force the cessation of uranium enrichment which the West fears is aimed at developing nuclear weapons; although Iran protests that their intentions are peaceful.
The International Energy Agency (IEA) has recently stated that the wide-ranging sanctions against Iran could its oil exports by as much as 1 million barrels per day (40% of total production).
In an attempt to avoid the full force of the sanctions in July, Iran is set to resume talks about its secretive nuclear program with Western countries, plus Russia and China.
Although to throw a stick into the works and hopes of the EU and US, President Mahmoud Ahmadinejad was reported on Tuesday as announcing that, “we must say to them that we have that much saved that even if we didn't sell oil for two to three years, the country would manage easily.”
If this proves to be true, it severely reduces the Wests power in the talks, and could mean that the high oil prices experienced around the world, which have been largely affected by the situation in Iran, will have been suffered for little gain. Many countries are struggling to find new supplies of oil in an attempt to avoid Iranian crude, and are themselves experiencing economic problems as a result. The popularity of the European Union and the US government could plummet if it turns out that the sanctions against Iran actually prove ineffective.
By. James Burgess of Oilprice.com
James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…