US eases embargo on Iran

WASHINGTON, July 27: The United States has begun to ease the stifling economic isolation of Teheran. As a first step, Washington will not o...

WASHINGTON, July 27: The United States has begun to ease the stifling economic isolation of Teheran. As a first step, Washington will not oppose a 1.6 billion pipeline that will carry huge quantities of Central Asian gas across Iran.

The move has important repercussions for India since US policy towards the sub-continent and its patronage of Islamabad is fashioned partly on the surmise that since Iran is a 8220;rogue state8221;, Pakistan is the only other gateway for the huge Central Asian energy reserve outside the sphere of Russian influence.

The Caspian Sea region holds the largest oil and gas reserves outside the Persian Gulf, an energy cornucopia the US is keen to book for its long term needs, ahead of Russia and China.

Last week8217;s partial resumption of economic and military aid to Pakistan through the instrument of Harkin Amendment was premised on the help Islamabad would provide in channeling the gas from Central Asia to the western world through its sea ports.

Soon after the amendment, Pakistan and Turkmenistan signed an agreement on setting objectives to start construction on the 1600 km long 2.5 billion 8220;Turkmenistan-Pakistan-Afghanistan8221; gas pipeline project next year.

In the Iran deal, a separate 2000-mile pipeline would carry gas from Turkmenistan on the eastern side of the Caspian Sea across a 788-mile stretch of northern Iraq into Turkey 8211; which is also energy starved 8211; and eventually to the West. The US has consistently blocked any multilateral energy investments in Iran since the 1979 Islamic Revolution there and the ugly and traumatic hostages episode. Current American law bars US and foreign investment of more than 40 million 8212; a pittance for the business 8212; in Iran8217;s energy sector.

In fact, so zealous has Washington been in enforcing this sanction that the US law has provision to punish even other countries doing business with Iran, a sword which has caused much heartburn among its European allies.

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But now, US officials say they will not oppose the trans-Iranian pipeline because it does not violate the 1996 Iran-Libya Sanctions Act ILSA which does not address pipelines carrying another country8217;s gas or oil through Iran.

No American company is involved in the Turkmen-Iranian deal, but experts say the US move is aimed at developing multiple outlets for the Caspian gas given the unending turmoil in Afghanistan and the instability in the Indo-Pak subcontinent.

8220;The recent defeat of the ethnically Pushtu Taliban in the Afghan northern provinces populated by Uzbeks and Tajiks may render the Turkmen-Afghanistan-Pakistan project less likely,8221; says Arien Cohen, an analyst with the Heritage Foundation.