Washington D.C. On Sunday President Obama addressed an influential pro-Israel group, the American Israel Public Affairs Committee (AIPAC), and affirmed the United States’ commitment to use force against Iran if necessary.
Obama warned of “loose talk” of war with Iran over the past few weeks that has largely benefited the Iranian government as the price of oil drives higher on fears of a military confrontation. Higher prices from global oil brings in more revenue for the government inTehran.
In recent weeks, concerns have arisen about the possibility of Israel launching a pre-emptive strike against nuclear sites in Iran. The Iranian government has refused to allow international nuclear observers to have access to their remote underground sites where it is believed that nuclear missles are being developed.
Obama appealed to Israel to allow more time for international sanctions to work against Iran rather than cause a military escalation that has the potential to unleash instability across the Middle East and drive the price of crude oil to new heights.
“Now is the time to let our increased pressure sink in, and to sustain the broad international that we have built” he said.
The United States has already implemented sanctions against Iran. The EU is imposing sanctions along with an oil embargo that is expected to begin in July. China, South Korea and Japan are also following through with sanctions and plan to curtail their purchases of Iranian oil.
Bloomberg reports that China will bring online two emergency crude oil reserve sites this year to help supply the country’s oil needs. Meanwhile, China is still in gas supply talks with Russia.
U.S. Energy Secretary Steven Chu said last Thursday that global oil producers appear to have enough spare capacity to make up for Iranian exports curtailed by tough new sanctions.
Last week it was reported in the media that India was one of the only major Asian countries that would not go along with sanctions and stood to gain as a beneficiary from buying discounted Iranian oil.
However, just hours ago Reuters reported that Iran’s biggest Indian oil client, Mangalore Refinery and Petrochemicals Ltd, plans to cut its annual import deal with Tehran by as much as 44 percent to 80,000 barrels per day (bpd) in 2012/13, two sources said, while western sanctions make trade more difficult.
On Monday President Obama will meet with President Benjamin Netanyahu who will address AIPAC later in the day. Three GOP candidates: Romney, Santorum, and Gingrich will speak to AIPAC via satellite.
Romney told an assembled group in a suburb outside of Atlanta, Georgia on Sunday that Obama’s foreign policy with Iran has failed Americans and made America less secure.
“If Barack Obama is reelected, Iran will have a nuclear weapon and the world will change,” Romney said.
Nonetheless, it is still clear from today’s AIPAC address that President Obama has sent a clear message to the Iranians that he is not bluffing, that he means it when he says that American policy won’t accept a nuclear Iran, and that no option, including a military one, is off the table if sanctions prove to be ineffective.
Other financial news
China cut their annual 2012 GDP growth target to 7.5% and will aim for 4% inflation. If China’s growth target is attained at 7.5%, it would be their lowest since 1990.
European banks keep parking more cash at the ECB. Today Bloomberg announced a record amount of 820 billion euros was deposited at the ECB overnight, surpassing the previous record attained last week.