In a monumental miscalculation the U.S. State Dept. underestimated the resolve of China to defy their mandate to isolate Iran from the world trade markets. The whole thing looks like one of the biggest diplomatic boondoggles of all time and Secretary of State Hillary Clinton’s handling of this was almost as ridiculous as her latest dye job.
Really Hil? Straw blonde hair with a young woman’s haircut. You’re freaking old, deal with it. Anglea Merkel carries her age, and the weight of the Euro-zone, properly. Think it over.
But, the take away here is while the U.S.’s pressure on its friends to curtail oil imports from Iran are mostly a formality. The important thing that needed to happen, getting China, and to a lesser extent India, to back down, didn’t happen. And the Federal Reserve’s policy of sterilization and tight monetary policy has done more to bring pressure on Iran than any amount of arm-twisting La Clinton and her minions could ever bring to bear.
I would not be in any way shocked if countries like Singapore immediately begin accepting oil that shows up on their shores from various Iranian tankers. Just because the European insurance companies won’t insure the tankers does not mean that Iran’s tankers can’t show up like the ice cream trucks of yore and offload some crude, even at cut-rate prices, like 20% below Brent (AMEX:BNO).
The longer this goes on the more the Iranians will cut deals through proxies and third parties to keep the oil flowing. By this time next year the 7th fleet will have to move out of the Malacca Straits as China’s imports will be dropped off at the Bay of Bengal in Mynamar.
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