US draws a new battle-line at Azadegan

The chief patron of this kind of free market economic policy being the United States, our expectation from the US administration is also supposed to run high and it would be very natural to conclude that Washington's obligation to abide by this basic principle of free market economy is much greater than any other nation. Now let us see what is going on somewhere in Iran concerning the development of an oil field that experts believe might turn out to be world's largest untapped reservoir of petroleum resources.

According to the basic principle of free market economic policy, countries are supposed to be free to pursue business with Iran for winning over lucrative contracts for the development of that particular oilfield, as Iran is not a country against which an international sanction is presently in force. Leading business groups of Japan were also having the same idea in mind, without taking into account that the time has changed so much since the world emerged as an unipolar entity that most of the lessons we were taught by our master earlier has been discarded by the master himself as they are increasingly running contrary to his own economic interest.

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With the oil resources of Iraq firmly placed in their pockets, policy makers in Washington are becoming more self-confident that oil resources all over the world are things where they have a right to impose decisions they consider correct. The Iranian oilfield of Azadegan has turned out to be a stark reminder of this sad reality.

For more than two years a consortium of Japanese companies comprising of Tomen Corporation, Japan Petroleum Exporting Company and few others were negotiating with the Iranian government concerning a project to develop the Azadegan oilfield, which once operational, is expected to be Iran's largest oilfield with an estimated recoverable reserve of around eight billion barrels. Tenders were supposed to be issued once the negotiation with the Japanese were completed and the Iranian side hoped to go ahead with the project sometime this year. Since the smell of eight billion barrels is something highly intoxicating to the oil barons who now virtually control the world, it didn't take time for them to step in with a different pretext that reminds us of the messy business of Iraq's WMD.

As Iran was preparing to open a second stage of its giant Azadegan oilfield to foreign investment in late July, Washington started to create pressure on Japan to delay an initial project where Japanese consortium was involved. United States has voiced concern about the project, citing a suspected nuclear weapons development by Iran. Later, at a preliminary consultation meeting for Japan-US working level energy talks last month, issues centering on Iran topped the agenda. US officials referred to the need for Iran to sign an additional protocol to the Nuclear Non-Proliferation Treaty, which would allow the International Atomic Energy Agency to conduct inspection at Iran's nuclear facilities without giving any prior notice. They also proposed that Japan should withdraw from the project unless Iran agrees to sign the additional protocol.

For Japan the situation created much difficulty. Not only that the Japanese consortium that also includes two oil firms affiliated with the government has already invested significant amount of money on the project, Japan also saw its own involvement in the project as a guarantee of keeping the flow of its much needed energy supply from the Middle East uninterrupted. The oil resources of Iraq, now under exclusive US control, will naturally have less openings for outsiders to get involved in oil related projects, and initial signs do provide ample support in favour of such assumption.

A Japanese official who attended the Japan-US talks in Washington later told Japan's public broadcasting corporation NHK, that the United States made it clear that it would oppose any effort by any country to get involved in the development of oil fields in Iran. Japan is worried that if Tokyo withdraws from the project under US pressure, a third country, most likely France or Russia, might step in to fill up the vacuum, which for Tokyo would mean not only missing the boat to improve country's energy supply situation, but also to lose lucrative business deals. As a result, for Tokyo the US guarantee that Washington wouldn't allow any country to get involved in Iran's oil project came as a relief and Japan now most likely would try to buy time before getting involved in Azadegan project. But how far in reality the United States will be in a position to impose its own decision on others remains to be seen.

Dealing with Iran looks like another treacherous way of US diplomacy. Washington seems to be increasingly becoming obsessed with the idea that nothing nuclear should go on in any country beyond the realm of its trusted friends. Iran is all along claiming that it's nuclear project is for peaceful purpose only and producing nuclear energy would help the country to export more oil, which would keep the flow to the world market undisturbed. But Washington has already set a September deadline for Iran to sign the additional protocol. If Tehran fails to do so by then, US may seek UN sanctions and step up unilateral pressure.

A superpower feeling itself great with its hollow victory in Iraq, now seems to be determined to impose its will on those who show the slightest sign of defiance. Iran is calling the US demand a trap and opposing to do anything that might look like giving concessions. But there is also limitation on how far Iran can go by defying the mighty superpower, which by virtue of taking control of Iraq, is now sitting next door. Tehran is in dire need of foreign investment to ensure that its oil resources are properly used. Improving the health of country's economy is also necessary to tackle growing street unrests.

But again, we are probably encountering a treacherous time when there is indeed not much that a country like Iran or even Japan can do to defy orders coming from Washington to follow certain instruction or advice, knowing pretty well that what they have been asked to do is not only unjust but also tantamount to gross violation of any civilized diplomatic norm. This is the greatest paradox of the time that we are passing through.