Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

How Increased Iranian Sanctions Affect South Africa

Politics / Africa Feb 17, 2012 - 02:56 AM GMT

By: OilPrice_Com

Politics Best Financial Markets Analysis ArticleThe U.S. new sanctions initiative, strongly supported by Israel, to impose new sanctions against Iran, is designed to punish it for its purported covert nuclear weapons program by imposing new restrictions on Tehran.

As a result, many of Iran's oil customers are scrambling to avoid collateral damage to their economies.


The sanctions' potential fallout is now hitting South Africa, Africa's biggest economy, which receives nearly 25 percent of its needs from Iran, roughly 98,000 barrels per day (bpd), or about 4 percent of Iran's total exports.

South Africa's economy, which has been hit by fuel shortages in the past because of strikes and refinery problems, would be hard-pressed to fill any gap quickly.

South Africa's Department of Energy director general Nelisiwe Magubane said that South Africa had not yet received any formal request from the United States to halt or reduce Iranian crude imports following a visit to South Africa last week by a senior U.S. energy official but added that, as most South African refineries are designed to treat Iranian crude and that any adjustment to handle other crudes would involve a financial cost, telling reporters, "We have said let's work on a worst case scenario. In other words, let's just assume that we cannot get anything out of Iran or at a reduced rate, what is going to be the impact?"

According to the U.S. Energy Information Administration (EIA),South Africa is Iran's ninth largest export market, after China (543,000 bpd), India (341,000 bpd) Japan (251,000 bpd, South Korea (239,000 bpd), Turkey (217,000 bpd), Italy (204,000 bbd), Spain (170,000 bpd) and Greece (158,000 bpd.)

Within these figures however is the issue of how much Iranian crude represents in terms of a country's total percent of imports, and South Africa is only exceeded by Greece (53.1 percent) and Turkey (30.6 percent).

The U.S. administration has been assiduously involved in discussions to shield nations that sign on-board for increased sanctions to obviate the effects on them. Last week U.S. Deputy Secretary of Energy Daniel Poneman said during his visit to South Africa that Washington had been in talks with all oil importers to find alternatives to Iranian supply and would work to avoid price rises.

U.S. South African embassy spokesman Elizabeth Trudeau told journalists, "We ... are working with oil consuming countries to help them respond to the new legislation and find alternatives to energy supplies from Iran." Regarding the U.S. presence in South Africa Trudeau added that a representative of the U.S. Treasury was in Pretoria, commenting, "The Treasury official met representatives of private business in South Africa, including members of the banking industry, as well as officials from the South African government," adding that the meetings were "part of our ongoing dialogue with countries around the world on the implications and implementation of the sanctions legislation."

However, even if South African refineries could locate alternative sources of crude oil, it would involve a substantial cost to them, which, according to South African Department of Energy Director General Nelisiwe Magubane, are designed to process lighter grades of oil, such as those from Iran. Magubane estimated that the cost to alter South African refineries to utilize other grades of crude would exceed $44 million.

South African-Iranian ties have a long, deep and complex history. During South Africa's white apartheid regime Iran supported the African National Congress resistance when it was an anti-apartheid movement, but Tehran played both sides of the fence, as it also supplied oil to the white minority government both before and after the Shah's overthrow by the Islamic regime led by Ayatollah Ruhollah Khomeini in February 1979.

History aside, South Africa could provide a unique opportunity for settling the Iranian nuclear debate, should the UN Security Council decide to avail itself of Pretoria's services.

South Africa is the only nation in the world to have voluntarily surrendered an incipient nuclear weapons program and now maintains that all countries should have the right to develop peaceful nuclear energy. South Africa has both uranium reserves and its own civilian nuclear power program. Seeking to build on its twin heritage of civilian and military nuclear endeavors, last week South African Foreign Affairs department spokesman Clayson Monyela said that South Africa has informed Iran that it is ready to help any nation that wants to follow its lead and give up nuclear weapons.

It is a concept worth pursuing as an alternative to war, as all five members of the UN Security Council possess nuclear arsenals as well as civilian nuclear programs. Perhaps the UN Security Council should consider listening to the advice of a nation that produced a Nobel Peace Prize winner rather than dictating.

And South Africa? Quite aside from the diplomatic laurels it would gather, it would save the funds needed to retool its refineries.

A win-win situation.

Source: http://oilprice.com/Energy/Crude-Oil/South-Africa-Caught-in-Fallout-from-Increased-Sanctions-Against-Iran.html

This article was written by Dr. John CK Daly for Oilprice.com who offer detailed analysis on Crude Oil, Geopolitics, Gold and most other commodities. They also provide free political and economic intelligence to help investors gain a greater understanding of world events and the impact they have on certain regions and sectors. Visit: http://www.oilprice.com

© 2012 Copyright OilPrice.com- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

g kaiser
17 Feb 12, 12:20
Iraninan oil and South Africa

The most logical solution to South Africa/Iran.!

South African gold for Iraninan oil.

Simple!


Sam
19 Feb 12, 06:09
Iran

"South Africa has informed Iran that it is ready to help any nation that wants to follow its lead and give up nuclear weapons" !! this is a wrong and misleading statement to say the least.

There is no evidence that Iran has nuclear weapons, nor is there nay evidance that it is developing such weapons! on the contrary, Iran facilities are usbject to international monitoring, unlike those who accuse Iran, like Israel or the USA.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in