Iran General NewsU.S. calls Iran nuclear breakthrough claim ‘hype’ as oil...

U.S. calls Iran nuclear breakthrough claim ‘hype’ as oil rises on concerns

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Bloomberg: The Obama administration and arms control specialists in Washington downplayed Iran’s claim of a “major” nuclear breakthrough as an exaggeration to bolster nationalism amid tighter sanctions, not a dangerous step toward an atomic weapon. Bloomberg

By Indira A.R. Lakshmanan and Viola Gienger

The Obama administration and arms control specialists in Washington downplayed Iran’s claim of a “major” nuclear breakthrough as an exaggeration to bolster nationalism amid tighter sanctions, not a dangerous step toward an atomic weapon.

Iranian state-run Press TV announced yesterday 3,000 “new- generation” Iranian-made centrifuges were installed at its main uranium enrichment site at Natanz, and domestically made fuel plates were loaded at a medical research reactor in Tehran. Iran won’t be intimidated by outside pressure and will pursue technological advances, the Iranian Students’ News Agency said.

“Our view on this is that it’s not terribly new and it’s not terribly impressive,” State Department spokeswoman Victoria Nuland told reporters in Washington.

She dismissed as “hyped” for a domestic audience Iran’s claim of important scientific advances. She said Iran is “feeling the pressure” of “unprecedented sanctions” that U.S. and European officials say are impeding Iran’s acquisition of materials for its nuclear program and hobbling its economy.

The dueling assessments came the same day the European Union confirmed it received a letter from Iran’s top nuclear negotiator, Saeed Jalili, about resuming negotiations with the U.S., France, Britain, Germany, Russia and China. Secretary of State Hillary Clinton has said the international community wants serious engagement over questions raised about Iran’s program, not talks for the sake of talking.

The latest rhetoric over Iran’s disputed nuclear program stokes tensions with the U.S. and its allies that already have spurred fears of a military confrontation and hit oil markets.
Oil Reacts

Oil rose to a one-month high after reports yesterday that Iran halted crude oil shipments to Europe months before an EU embargo takes effect July 1, and as U.S. inventories declined for the first time in four weeks. Futures climbed 1.1 percent as Iran’s Press TV said the Persian Gulf state halted crude exports to Italy, Spain, France, Greece, Portugal and the Netherlands.

The state-run Fars news agency said Iran summoned the ambassadors from those countries to the foreign ministry to protest sanctions and warn them, without cutting exports. Oil for March delivery rose $1.06 to $101.80 a barrel on the New York Mercantile Exchange, the highest settlement since Jan. 10. Prices have increased 21 percent in the past year.

“This is the kind of news that gets traders juices flowing,” Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said in a phone interview. “The Iran situation has gone from lukewarm to a simmer.”
Suspicious Iranian Activities

While Iran insists its nuclear program is for civilian energy and medical research, the U.S. and European governments say they suspect Iran is seeking an atomic weapons capability. Israeli leaders say they haven’t ruled out a military strike to prevent it.

“It’s a lot more likely that we will soon see major change in the situation,’ he added. “Whether that’s an attack by Israel or negotiations has yet to be determined.”

Over the past three months, the U.S. and the EU have imposed numerous new sanctions restricting petroleum and non- energy trade as well as financial transactions in an effort to force Iran to give up any illicit nuclear activities. Sanctions advocates say economic pressure is the best way to avert a military conflict in a region that holds more than half the world’s oil reserves.

Nuclear Fuel Cycle

Press TV yesterday showed President Mahmoud Ahmadinejad at the research reactor in Tehran, and reported that Iran has taken the final step in completing the nuclear fuel cycle. Only a handful of countries, including France and the U.S., have the technology to build the 19.75 percent enriched fuel plates needed for the reactor, according to Iranian officials.

David Albright, a nuclear physicist and former international weapons inspector in Iraq, said in an interview that the fuel plates aren’t hard to produce and have no military implications.

“They’re so far behind that it sounds like they’re trying to play catch-up, which makes me think it’s more for a domestic audience than an international one,” said Albright, founder of the Institute for Science and International Security in Washington.

Iranian media provided no details about the so-called new generation of centrifuges, the sophisticated equipment used to enrich uranium. Enriched uranium is used to fuel power plants and reactors and, at 90 percent enrichment levels, it may be further processed for use in atomic weapons.
‘Image of Progress’

“This is more symbolism than anything else,” Dennis Ross, who served until recently as President Barack Obama’s chief adviser on Iran, said in an interview. Iran has “claimed for years that they are installing next generation centrifuges, and they continue to have material and technical problems that bedevil their operation.”

Ross said there is no evidence that Iran has overcome those failings. They are trying “to create the image of progress even when they are not advancing, now because they want to suggest they are not being affected by the pressure and isolation” of sanctions, he said.

Ross said he believes sanctions create an opening for a diplomatic solution to the nuclear crisis.

Iran’s announcements may have been timed deliberately for the day its leaders sent a letter to the EU about resuming talks to signal that Iran is “in a position of strength,” said Peter Crail, a research analyst at the Arms Control Association in Washington, who called the announcement “posturing, more than real advances.”

Time for Diplomacy

Crail said in an interview he believes there’s still an opportunity to persuade Iran’s leadership to stop enriching uranium to 19.75 percent and to turn over its stocks of so- called low-enriched uranium. To induce Iran to halt domestic enrichment, the U.S. and Europe have offered to provide nuclear fuel for civilian use.

White House press secretary Jay Carney said the U.S. expects “to learn more” about yesterday’s developments from International Atomic Energy Agency inspectors, who are due to return to Iran Feb. 20-21. Officials from the United Nations’ agency last visited there for three days ending Jan. 31.

Carney called reports of a nuclear breakthrough and threats to cut off oil exports before an embargo takes effect “provocative acts” that are “designed to distract attention from the demonstrated impact” of sanctions.

Car-Bomb Attacks

Israel’s leaders, who for years have pressed for “crippling sanctions” on Iran, have suggested time may be running short to stop Iran’s suspected progress toward becoming a nuclear weapons state. Adding to tensions recent are the Feb. 14 car-bomb attacks that targeted Israeli diplomats in India and Georgia, which Israel blamed on Iran. In Thailand, police arrested Iranians allegedly planning similar attacks. Iran says Israel is behind a series of killings of Iranian nuclear scientists.

Olli Heinonen, a Finnish physicist and former top inspector for the IAEA, said more significant than Iran’s announcements yesterday is its recent declaration that its underground Fordo enrichment facility “is in routine production.”

“By the end of this year they’ll have 250 to 290 kilograms of 20 percent enriched uranium. That’s a lot,” Heinonen said in a phone interview from Cambridge, Massachusetts, where he is a senior fellow at Harvard University’s Belfer Center for Science and International Affairs. That amount of 20 percent enriched uranium could be used for two nuclear weapons if Iran further enriched it to 90 percent, he said.

Iran’s known enrichment facilities are under IAEA monitoring and there has been no report of enriched uranium being diverted for weapons use.

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