Javad Karimi-Qoddusi, a member of the parliamentary National Security and Foreign Policy Committee, said: "In line with this bill and Iran’s sovereign rights, the Islamic Republic of Iran will not let oil tankers, which carry oil to the countries that have imposed sanctions against Iran, such as the European Union, the USA, and occupier Israel, pass through." He added: "When they impose sanctions on Iran unfairly, the implementation of sovereign rights in Iran’s internal and coastal waters is the least solution." Source BBC Monitoring Newsfile, July 2, 2012.
In the most recent issue of Foreign Affairs (July-August, 2012) Kenneth Waltz argues why Iran should be allowed to get the bomb. In the previous issue, Jacques Hymans argues why the Iranian leadership will “botch” it up and fail to get the bomb. Strategists may debate with words. Iran advances with centrifuges.
Meanwhile, the EU sanctions started on July 1. Diplomatic talks have failed. Iran is proceeding toward achieving a bomb. Iran’s missile testing also proceeds. So does the rapprochement between Iran and the new Egyptian government.
The July 2 edition of KGS NightWatch summarizes the new Egyptian president Mursi’s action to release the sheikh who masterminded the 1993 World Trade Center bombing as follows.
“The Egyptian economy is in collapse. The political system is unsettled. The roles of the Army and of Sharia in national life are begging for resolution. Nevertheless, Mursi focused on the fate of the blind sheikh as a first order of business, deliberately provoking the US.”
They conclude, “This man does not seem to be in touch with the depth of the wound Egypt has suffered because of the apocryphal Arab spring. Alternatively, he deliberately is pursuing an Islamist agenda, which he did not disclose and which considers the present travails of Egyptians to be the path to redemption. In either case, the regional security situation is being altered fundamentally.”
Concomitantly, Iranian Foreign Minister Ali Akbar Salehi said Iran is prepared to restore diplomatic relations with Egypt at the ambassadorial level when Egypt is ready, Mehr news agency reported on 2 July.
Europe-centric markets have ignored this risk during the recent sell off. The risk premium seems to have diminished in the oil price. Is this a correct view?
We think not.
In our view, the oil markets maintain the present prices in spite of worldwide slowing. The existing price levels for WTI and Brent are sustained in spite of the economic weakness in the US, China and Europe.
To us that says the oil markets are tighter and riskier than other analysts would have us believe. Furthermore, the other side of this current round of global economic weakness is recovery. When it comes, oil is headed north.
In the US, an energy sector resurgence is underway. Shale and natural gas are evolving positively. The US is on a long-term growth path with energy. At Cumberland, we have a US-centric, multi-ETF energy sector position in our portfolios.
When we get to the other side of July 4th, we expect to see the evolution of the Persian Gulf threat from Iran. We take it seriously. It is going to be a hot summer.