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The Latest from Iran (26 June): The Oil Squeeze

See also Iran Feature: The Week in Civil Society --- At Neda's Grave
Iran Snap Analysis: A Fight Within the Regime Over Egypt
The Latest from Iran (25 June): Doing the Currency Slide

1800 GMT: Oil Watch. Earlier we reported an apparent attempt by the National Iran Tanker Company to circumvent oil sanctions by re-naming 10 tankers and putting them under the Tanzanian flag (see 1100 GMT). It appears, however, that NITC has further problems....

Industry sources say the company has delayed the expansion of its fleet. A senior NITC official said the firm has yet to take delivery of a 318,000 deadweight tonne tanker "Safe", the first of 12 new supertankers the firm was to manage under a $1.2 billion contract with Chinese shipyards. Delivery was initially scheduled for May.

The delay also deprives the Islamic Republic of capacity to store oil on vessels as its customers cut purchases. Iran-based shipping sources said in April that Tehran had been forced to deploy more than half of its national tanker fleet to store oil at anchorage. That proportion has since increased, trade sources say.

1320 GMT: Economy Watch. Could this be the first sign of mass protests over the economic situation? Farnaz Fasshi reports for The Wall Street Journal:

Iranians protesting soaring food prices launched a spontaneous three-day boycott of milk and bread purchases, in a sign that growing economic hardship could lead to more civil disobedience.

The grass-roots campaign, which ran from Saturday through Monday, wasn't affiliated with any opposition group. Dozens of Iranians said in interviews and on social-networking sites and blogs that they had participated in the boycott, and a number of bakeries and grocery stores across Tehran, the capital, reported declines in milk and bread sales of as much as 90%....

Prices of basic goods rise almost daily. Independent economists estimate annual inflation is hovering between 50% and 60%. In the past two weeks, the price of bread has increased 33%, chicken 28.5% and milk prices are climbing daily, according to Iranian newspapers and semiofficial news websites.

1250 GMT: Truce? Foreign Minister Ali Akbar Salehi, visiting Cyprus, has called on the European Union to reconsider its embargo on imports of Iranian oil, scheduled for 1 July: "We hope that the European Union looks into the matter with more rationality and wisdom because I think nobody benefits from confrontation."

Salehi also asked Nicosia to assist, "In view of the misunderstandings that have transpired between Iran and the European Union, it would be possible to take effective steps towards the reduction and removal of such misconceptions with the help of Cyprus."

1100 GMT: Oil.Watch. Trying to get around US and European Union sanctions, the National Iranian Tanker Company has renamed at least 10 of its vessels, switching them to a Tanzanian flag.

NITC has renamed five very large crude carriers, each holding about 2 million barrels of oil, and five Suezmaxes, hauling 1 million barrels, according to the Equasis shipping database maintained by the European Commission. All the ships were previously registered in Malta or Cyprus.

0720 GMT: Nuclear Watch. Ali Bagheri, Iran's deputy nuclear negotiator, has told Fars, "If the 5+1 Powers (US, Britain, Germany, France, Russia, and China) act outside their agreements, it will be more costly for them."

Following the statements at last week's formal talks in Moscow, the two sides are due to hold technical discussions in Istanbul on 3 July.

0700 GMT: Foreign Affairs (Iraqi Front). An intriguing attack in the Iranian press on the autonomous Kurdish Regional Government in Iraq....

Farda News alleges that the KRG, led by Massoud Barzani, has become a safe haven for Israeli intelligence agents to assssinate Iranian nuclear scientists and that the Mossad “has apparently even set up a military base in this area and is freely operating there".

Press TV adds:

Regional media had previously reported that Mansour Barzani, Massoud’s son, had received two Tel Aviv officials, the Israeli chief of special operations and the coordinator for Israeli-Kurdish relations, in the Kurdistan region.

During their one-and-a-half-hour meeting, the two sides reportedly explored all avenues for increasing bilateral military relations and the ensuing trade with Israel.

Minister of Intelligence Heydar Moslehi said on 17 June that Israel was "exploiting the soil of a region abutting our land and even has a terrorist training base and military site there." He did not specify the country, however.

US journalist Mark Perry revealed earlier this year that Israeli services had established a presence in Azerbaijan.

0600 GMT: South Korea, a leading Asian consumer of Iranian oil, has confirmed that it will halt imports from 1 July,  following a European Union ban on insurance for tankers carrying Tehran crude.

South Korea took almost 10% of its oil from the Islamic Republic in 2011, but a joint statement from the Ministries of Economy, Finance, and Foreign Affairs said:

South Korea's imports of Iranian oil will be suspended, as the EU will suspend crude imports from Iran and also halt its insurance and reinsurance cover on the crude imports from July 1. The government will continue to make efforts to minimize impacts on domestic industry and the economy including oil supply, and exports to Iran, although the imports of Iranian oil are suspended.

A deputy minister Moon Jaedo, said, "Most of the Iranian oil has already been replaced by Iraq, Kuwait, Qatar and the United Arab Emirates, and also imports from the spot markets, although still some is left to be covered."

Iran's other Asian customers have all cut, but not suspended, purchases. The Japanese Government has authorised sovereign guarantees to cover Iranian shipments, China has asked Iran to deliver the crude, and India is allowing state refiners to import supplies, with Tehran arranging shipping and insurance from 1 July.

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