The five permanent members of the U.N. Security Council plus Germany met on Saturday to discuss new sanctions on Iran. The meeting did not go as the U.S. hoped and it looks like new sanctions could be months away if at all. This should remove any worry over Iran doing something stupid in the near future and the threat of oil disruption from the Persian Gulf has dropped significantly.
The five permanent members of the Security Council China, Britain, France, Russia, the U.S. met along with Germany to discuss sanctions on Saturday. The meeting had been scheduled especially to allow the ranking Chinese diplomat with authority to make decisions to attend the meeting. It was delayed, rescheduled more than once just to make sure the top guy would be there. Unfortunately he canceled at the last minute and sent a clerk to take notes. Needless to say the other five nations were not happy.
The "counselor" from China's U.S. mission, Kang Yong, was the lowest level diplomat at the meeting. His sole function at the meeting was to take notes and read China's official position once again. That position says China does not want Iran to build a bomb. China wants illegal uranium enrichment to stop. China wants these points to be negotiated peacefully rather than with additional sanctions. I seriously doubt that is ever going to happen!
China is taking care of Iran because Iran gave them a couple sweetheart deals on oil from Iran. China does not want Iran to back out of those deals so they are stonewalling at the U.N. Security Council where their vote is an instant defeat of any new sanction proposal.
China is not being a friend to the U.S. and relations over the last year have gone steadily downhill. The pleas on many topics from the current U.S. administration are falling on deaf ears in China.
The U.S. would like new sanctions on Iran before the May meeting of the Nuclear Non Proliferation members and Iran is a member although they have threatened to withdraw. The U.S. is afraid Iran will cause a big scene pitting east against west and portray the U.S. as dictator to smaller nations and claim we are trying to pick a fight with Iran so we can protect Israel.
The U.S. and Iran are still technically in formal talks on halting the enrichment. This is a delaying tactic by Iran. At each meeting Iran gives a list of demand and then tells the press they are waiting on our replies. It is the same way every meeting. This is the rope-a-dope international style.
China's former ambassador to Iran said it will be nearly impossible for the Security Council to impose new sanctions without China's consent and the complete breakdown of the phony, er excuse me, the formal talks.
The ambassador pointed out that the Obama administration had not made any progress on the Iran issue since being elected.
The new sanction discussions revolve around shutting down Iranian shipping companies that have violated the arms embargo. They would also ban nations and international lenders like the World Bank from giving Iran any grants, loans or other financial aid until the enrichment was stopped. The U.N also wants to shutdown funding for the Iranian Revolutionary Guard Corp. The IRGC has evolved into a major domestic institution with controls on several industries, commercial services and black-market enterprises.
Secretary of State, Hillary Clinton, said the Obama administration also wants to target Iran's ruling elite. How they would do that peacefully is unknown.
The entire scenario of a "rising security premium" in oil due to the coming showdown with Iran has been pushed to the sidelines. With no consensus and no sanctions likely Iran was the winner of the year-end deadline for halting enrichment. They have bought another 2-3 months and that means any security premium will probably bleed away over the next few days.