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January 14, 2012

US Tells Israel not to Attack Iran and China could make up to $100 million every day there are full Sanctions on Irans oil

1. Wall Street Journal - U.S. defense leaders are increasingly concerned that Israel is preparing to take military action against Iran, over U.S. objections, and have stepped up contingency planning to safeguard U.S. facilities in the region in case of a conflict.

President Barack Obama, Defense Secretary Leon Panetta and other top officials have delivered a string of private messages to Israeli leaders warning about the dire consequences of a strike. The U.S. wants Israel to give more time for the effects of sanctions and other measures intended to force Iran to abandon its perceived efforts to build nuclear weapons.

The high-stakes planning and diplomacy comes as U.S. officials warn Tehran, including through what administration officials described Friday as direct messages to Iran's leaders, against provocative actions.




The U.S. and Iran, however, have taken steps in recent days apparently designed to ease tensions. Iran has agreed to host a delegation of United Nations nuclear inspectors this month. The U.S., meanwhile, has twice this month rescued Iranian sailors in the region's seas.

Covert efforts by Israel's intelligence service to prevent Tehran from developing nuclear weapons have been credited with slowing the program without the high risk of military conflict that could be sparked by an airstrike

Mr. Netanyahu said in a recent interview that Iran has begun to "wobble," a signal some U.S. officials believe suggests he is willing to follow the current U.S. strategy, which seeks to avoid a military confrontation with Iran.

"Our concern is heightened," a senior U.S. military official said of the probability of an Israeli strike over U.S. objections.

Tehran crossed at least one of Israel's "red lines" earlier this month when it announced it had begun enriching uranium at the Fordow underground nuclear facility near the holy city of Qom.

The planned closing of Israel's nuclear plant near Dimona this month, which was reported in Israeli media, sounded alarms in Washington, where officials feared it meant Israel was repositioning its own nuclear assets to safeguard them against a potential Iranian counterstrike.

Inside the Israeli security establishment, a sort of good cop, bad cop routine, in which Israeli officials rattle sabers amid a U.S. scramble to restrain them, has assumed its own name: "Hold Me Back."

2. Business Week - China stands to be the biggest beneficiary of U.S. and European plans for sanctions on Iran’s oil sales in an effort to pressure the regime to abandon its nuclear program.
“The sanctions against Iran strengthen the Chinese hand at the negotiating table,” Michael Wittner, head of oil-market research for Societe Generale SA in New York, said in a phone interview. While there are no confirmed numbers, Chinese refiners are likely to win discounts on Iranian crude contracts as buyers from other nations halt or reduce their purchases of Iranian oil to avoid being penalized under U.S. and European sanctions, he said.

At the same time, the U.S. is bearing most of the cost of air and sea patrols and surveillance in the Strait of Hormuz, through which transit 17 million barrels a day of crude, or 20 percent of world supplies. China, the No. 2 importer of oil after the U.S., enjoys protection for the shipping lanes without paying a cent, retired Admiral Dennis Blair, a former U.S. Director of National Intelligence.

As the world’s second-largest economy after the U.S., China often gets an economic free-ride “even absent the current tensions in the Persian Gulf,” said Erica Downs, a China and energy specialist at the Brookings Institution, a research group in Washington.

In Afghanistan, China benefited economically from the U.S.- led war to oust the Taliban, Downs said. In 2007, Metallurgical Corp. of China won the right to develop Afghanistan’s largest copper deposit, even as U.S. forces were fighting and dying in the country, she said.

“It has been a long-standing policy of Beijing’s to undermine U.S. influence in the Middle East even as the Obama administration is shifting its diplomatic and military pivot to the Asia-Pacific,” Lam said in an e-mail. “There is no possibility that Beijing will curtail its oil imports from Iran, which is seen by Beijing as a major ally.”

Instead, China’s oil executives are expected to demand lower prices for Iranian crude, said Mark Dubowitz, director of the Iran Energy Project at the Foundation for Defense of Democracies, an advocacy group in Washington.

Dubowitz estimates that if China were the only remaining buyer of Iranian crude, it might command as much as 40 percent discounts. Among the other major refiners of Iranian oil, India has increased orders from Saudi Arabia, and Japanese and South Korean officials say they are gradually reducing their dependence on Iran, Dubowitz said.

Is China free riding ? Yes.
Are other nations the chumps ? Yes.
Is it China fault that they are taking advantage ? No.

Iran exports about 2.5 million barrels of oil per day or about 900 million barrels per year. China normally gets about 22% of it. If China is the only one buying. Then they get $90 billion worth of oil for $54 billion and save $36 billion.

If China is only getting half of the oil and a 20% discount they would get $25 million every day. If they get all of the oil and all of the discount, they will get $100 million every day.

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