China and Russia Undermining U.S. Power

September 28, 2009 | From

The giants of the East are positioned to upset U.S. sanctions on Iran by supplying Tehran with gasoline.

U.S.-led fuel sanctions on Iran are being undermined by China and Russia. Chinese companies are already selling gasoline to Iran, and Russia is poised to follow suit.

Because Russia has so often thwarted sanctions on Iran in the United Nations Security Council, the U.S. has been forced to get more creative.

In anticipation of Iran’s refusal to enter into talks about its nuclear program, the United States has developed a sanctions plan that bypasses the UN.

Although Iran is among the world’s largest crude oil producers, it lacks the refining capability to meet domestic demands for gasoline. The proposed U.S. sanctions zero in on Iran’s gasoline imports, which comprise up to 40 percent of its consumption. Because petrol imports are the most vulnerable point of the Iranian economy, the West hopes the pressure from supply cuts would be significant enough to choke Tehran into making concessions.

But tidings from the East reveal cracks in the U.S.’s plan.

“We estimate, based on what we are hearing in the market,” said JPMorgan head of commodities research Lawrence Eagles, “that 30,000-40,000 barrels a day of Chinese petrol is making its way from the Asian spot market to Iran via third parties.”

Iran imports approximately 120,000 barrels of gasoline each day. By shipping through intermediaries, China can supply one third of that amount without any overt official agreements.

It is unlikely that Moscow will make such efforts to disguise its assistance to Iran.

Russia’s relationship with Iran is one of Moscow’s favorite items of leverage to use against the U.S. In terms of geography and gasoline capacity, Moscow is in a position to cripple the planned sanctions. Russia recently surpassed Saudi Arabia to become the world’s largest oil producer, and is among the largest refiners. It would have no trouble supplying Iran’s domestic demands by ship or rail from the north, a route which could not be blocked by U.S. or Israeli military.

Russo-U.S. relations are in steady decline, and Russia’s next moves will determine whether the U.S.-led gasoline sanctions on Iran are a success or failure.

Russia’s and China’s refusals to back America demonstrate the political independence and national self-determination of these rising nations. Their respect for the West is precipitously waning. China is bolstered by its growing economic power. Russia is emboldened by its central role in energy politics.

Weighed down by internal and external strife and division, America is increasingly incapable of defending its position on the global stage, and the rise of Russia and China—as well as other powers—will increasingly marginalize the U.S.

For more about these ultimately hope-filled trends, read “The Giants of the East” and Russia and China in Prophecy. •

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