Iran is a big ball of string

The US authorities will “take a look at” a controversial agreement signed over the weekend by Royal Dutch Shell that could ultimately lead to a multi-billion dollar investment in Iran, a US State Department official said.(...) US legislation permits President George W. Bush to take action against non-US companies investing in Iran’s energy sector. However, because of concerns over an extra-territorial trade dispute and the risk of further alienating allies, no foreign companies have been penalised to date under the Iran Libya Sanctions Act and the subsequent Iran Freedom Support Act.(...) The agreement does not put a figure on the value of the project. Shell and its partners are still working on cost estimates. But it was suggested in Iran at the weekend that it could be worth $10bn (£5bn). Shell and Repsol would each have 25 per cent of the project, with the National Iranian Oil Company holding 50 per cent. Iran holds the world’s second largest gas reserves, after Russia. Financial Times

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Europe needs a lot of natural gas and does not want to depend exclusively on Russia and Algeria for it. After Russia, Iran has the world's largest supply of natural gas.

The United States, it's Middle East policy driven by its domestic politics, (read the "Lobby")is trying to strangle Iran. In the neocon, "Grand Strategery", Iraq was basically a stepping stone on the way to regime change in Iran... "real men go to Teheran".

Of course this has all gone terribly wrong. Iran is the winner of the war in Iraq. The United States has been seen to fail in Iraq, and as Tony Karon quoted from the Coen brother's "Miller's Crossing" in Haaretz, "'You run this town because people think you run it.' Ergo, when people realize that you don't, then you no longer do."

Europe is not willing to sacrifice strategic energy supplies to make life easier for a lame duck American president whose short hairs appear to be in the possession of the Israeli Likud.

Now the skinny is: does this gang of idiots actually have the chops to sanction European flagship, Royal Dutch Shell? DS

Europe Resists U.S. on Curbing Ties With Iran - New York Times

Abstract: European governments are resisting Bush administration demands that they curtail support for exports to Iran and that they block transactions and freeze assets of some Iranian companies, officials on both sides say. The resistance threatens to open a new rift between Europe and the United States over Iran.(...) “We are telling the Europeans that they need to go way beyond what they’ve done to maximize pressure on Iran,” said a senior administration official. “The European response on the economic side has been pretty weak.” The American demands and European responses were provided by 10 different officials, including both supporters and critics of the American approach. One irony of the latest pressure, European and American officials say, is that on their own, many European banks have begun to cut back their transactions with Iran, partly because of a Treasury Department ban on using dollars in deals involving two leading Iranian banks. American pressure on European governments, as opposed to banks, has been less successful, administration and European officials say. The main targets are Italy, Germany, France, Spain, Austria, the Netherlands, Sweden and Britain, all with extensive business dealings with Iran, particularly in energy.(...) The administration says that European governments provided $18 billion in government loan guarantees for Iran in 2005. The numbers have gone down in the last year, but not by much, American and European officials say. American officials say that European governments may have facilitated illicit business and that European governments must do more to stop such transactions. Treasury Secretary Henry M. Paulson Jr. has said the United States has shared with Europeans the names of at least 30 front companies involved in terrorism or weapons programs. “They’ve told us they don’t have the tools,” said a senior American official. “Our answer is: get them.” “We want to squeeze the Iranians,” said a European official. “But there are varying degrees of political will in Europe about turning the thumbscrews. It’s not straightforward for the European Union to do what the United States wants.” Another European official said: “We are going to be very cautious about what the Treasury Department wants us to do. We can see that banks are slowing their business with Iran. But because there are huge European business interests involved, we have to be very careful.”(...) Typically, American officials say, European companies that do business with Iran get loans from European banks and then get European government guarantees for the loans on the ground that such transactions are risky in nature. According to a document used in the discussions between Europe and the United States, which cites the International Union of Credit and Investment Insurers, the largest providers of such credits in Europe in 2005 were Italy, at $6.2 billion; Germany, at $5.4 billion; France, at $1.4 billion; and Spain and Austria, at $1 billion each. In addition to buying oil from Iran, European countries export machinery, industrial equipment and commodities, which they say have no military application. Europeans also say that courts have overturned past efforts to stop business dealings based on secret information. READ IT ALL