Despite the increasingly tough sanctions Iran is continuing work on its enrichment program. Almost daily some major international company announces they will comply with the sanctions and halt business with Iran but the country marches on.
An IAEA aide said this weekend that Iran is making steady progress in its nuclear enrichment program and the clock is ticking on Iran's ability to make a bomb. Olli Heinonen stepped down in August as Chief of U.N. nuclear inspections worldwide. He is not a low level clerk and he knows what he is talking about.
He noted that Iran's monthly output of low-enriched uranium had been stable at about 120 kg. He also believes the Stuxnet computer worm has dramatically infiltrated Iran's nuclear systems and is slowing their progress. However, although there have been a significant increase in technical glitches at Natanz he is not ready to say the worm actually impeded in the centrifuge process.
The Stuxnet worm specifically targets equipment manufactured by Siemens and that equipment is installed in the Bushehe nuclear plant. Numerous reports claim the worm has caused significant damage at the plant. Iran believes the worm was written by Israel or the U.S. in order to attack Iran's nuclear progress.
Since the worm has turned up in equipment all over the world that is not a likely scenario although I do believe they would have done it if they could.
The IAEA said last month Iran had accumulated 2.8 tonnes of low enriched uranium. Only about 1,000 kg is required to make a bomb.
Royal Dutch Shell joined a growing list of international companies that are pulling out of Iran. France's Total, Norway's Statoil and Italy's ENI all announced they would stop any activities in or with Iran. Japan's Inpex Corp also said it may withdraw from an Iran oil field even though it was not specifically named on the U.S. target list. Inpex has a 10% interest in the Azadegan oil field project. The field was Iran's biggest find in 30 years when it was discovered in 1999 with estimated reserves of 26 billion barrels and recoverable reserves of six billion.
The U.S. also announced new sanctions against Naftiran Intertrade Co, a subsidiary of the National Iranian Oil Company based in Switzerland. Iran has been using shell companies outside Iran to get around the sanctions. The U.S. and its allies are researching these companies and putting them on the list. Recent U.S. legislation allows the administration to penalize companies doing more than $15 million in sales to Iran's energy sector.
Iran has been struggling to overcome the gasoline sanctions. Iran imports more than 40% of its gasoline. The sanctions have been very effective in reducing those imports. In recent months Iran has removed the internal subsidy on gasoline and converted several petrochemical plants to make gasoline in order to get around the sanction. Last week Iran announced it was self-sufficient and was now exporting gasoline. Nobody believes them but that is what they claim.
Iran has been making noises like it wants to settle the enrichment question but they are masters at talking and delaying. I believe they are really hurting without gasoline and with all the oil companies pulling out they are going to see a rapid decline in crude production. The situation is rapidly coming to a point where the Iranian administration will have to make concessions or the government will be overthrown. If Iran can't sell its oil and can't import gasoline it should spiral out of control very quickly.
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