The Latest from Iran (13 January): Beyond "Safe and Sane" --- Watching The Economy

President Ahmadinejad, on his trip to Cuba, pronounces that former Cuban leader Fidel Castro is "safe and sane"

See also Iran Snap Analysis: Are the Oil Sanctions Tightening on Tehran?
Iran Video: Scott Lucas on Al Jazeera - Tehran, China, & US Sanctions
The Latest from Iran (12 January): After the Tehran Bomb

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2015 GMT: Chest-Thumping.of the Day. Fars has picked up the story from The New York Times (see 0900 GMT) that the Obama Administration has sent a warning to the Supreme Leader that closing the Strait of Hormuz is a “red line” that will bring an American response.

1940 GMT: Sanctions Watch. Japanese Prime Minister Yoshihiko Noda has pulled back from the support of his Finance Minister, Jun Azumi (see separate analysis), for tougher sanctions by Tokyo on Iran.

Azumi had said Thursday, after talks with US Secretary of Treasury Tim Geithner, that Japan would reduce oil imports but Noda said today that the Government has yet to decide because businesses implications need to be considered. He described Azumi's remarks as a "personal view".

Noda continued, "Japan's basic stance is to resolve such matters diplomatically and peacefully. We need to consult with the business community, and we need to work out details with U.S. officials. We have to think about the implications for Japanese banks, and what measures are needed to resolve possible negative impact."

1925 GMT: The Tehran Bomb. The head of Iran's nuclear energy programme, Fereydoun Abbasi, at the funeral of Mostafa Ahmadi Roshan, killed on Wednesday by a car bomb --- Abbasi was wounded in November 2010 in an assassination attempt:

1915 GMT: Your Tehran Friday Prayer Update. No prizes for guessing the lead item in the Friday Prayer of Ayatollah Mohammad Emami Kashani --- he dwelt on Wednesday's murder of scientist Mostafa Ahmadi Roshan as proof that "the enemies of the Islamic establishment are targeting the independence of Iran": “The martyrdom of this scientist shows that the enemies of Iran have a problem with the country's independence and scientific [progress] and their policy is based on enmity with the scientific advancement of Iran."

This had occurred, Ayatollah Emami-Kashani, because "the global arrogance" considers Iran the inspiration behind the recent Islamic movements in the region and has therefore decided to fight the country: “The international community is either silent or supports the terrorist but we must help others understand that the US is against the awakening of nations.”

A bit more originality in the theme of Qom Friday Prayer leader Mohammad Saeedi: the "deviant current" works with the enemy to hamper elections and people must choose appropriate candidates to save the Iranian system.

1905 GMT: Economy Watch. Analyst Hossein Mansour has said that the elevated interest rate in Iran, now 20%, will not help the economy or the currency because the real inflation is at about 30% and may rise further.

1855 GMT: Campus Watch. The Supreme Leader's representative Mohammad Mohammadian has intervened in the latest dispute about Islamic Azad University, saying that the appointment of Farhad Daneshjoo, the brother of the Minister of Higher Education, to the Board is legal and final.

1840 GMT: Rumour of the Day. Back from a lengthy academic break to find the French newspaper Libération reporting an explosive claim from President Ahmadinejad --- some of the 200,000 documents he holds, with sensitive information, concern illegal transfer of funds abroad by Mojtaba Khamenei, the son of the Supreme Leader.

Rah-e Sabz adds the allegation that, when urged to fire his right-hand man Esfandiar Rahim-Mashai for involvement in the $2.6 billion bank fraud, Ahmadinejad said, "Mojtaba stole 1.6 billion Euros ($2 billion) from national funds (beit-ol-maal)."

1240 GMT: Nuclear Watch. More on the mixed response of the regime to the UN and International Atomic Energy Agency (see 0815 GMT)....

While top officials like Speaker of Parliament Ali Larijani has expressed willingness for talks on the nuclear programme and while a visit by IAEA inspectors has been arranged for 28 January, MP Mohammad Karamirad has said that some of the inspectors are "spies for Israel".

1140 GMT: The Battle Within. An interesting intervention by Hamidreza Moghaddamfar, the Cultural Deputy of the Revolutionary Guards, who praised the Supreme Leader's recent "Badr speech" because "some forces got scared and tired".

Ayatollah Khamenei, declaring that Iran would triumph over sanctions and the enemy, invoked victories by the Prophet Mohammad, including at Badr. The speech has been read by EA correspondents at a slap at Central Bank head Mahmoud Bahmani, who said that sanctions presented a situation "worse than physical war" for Tehran.

1135 GMT: The Tehran Bomb. The opposition Green Embassy Campaign has contended that Wednesday's killing of scientist Mostafa Ahmadi Roshan is an attempt, as in the 1980s, to unite Iranians against an "enemy" and to divert attention from the nuclear issue.

The Campaign also warned of possible regime action in Iraq, including the demolition of pipelines, and Syria.

1125 GMT: Sanctions Watch. Gannady Gatilov, Russia's Deputy Foreign Minister, has warned the US that moves to tighten sanctions on Iran would "unquestionably be perceived by the international community as an attempt at changing the regime".

Meanwhile, diplomats said today that Iran had agreed to a high-level visit by the International Atomic Energy Agency's inspectors on 28 January.

The news came as Speaker of Parliament Ali Larijani, visiting Ankara, said he believed that the nuclear issue could be solved through serious talks, with Tehran supporting discussions in Turkey.

0915 GMT: Sanctions Watch. Reuters has a significant article which reinforces our analysis that the European Union will cut off Iranian oil imports this month but that the decision will not take effect before July:

Italian, Spanish and Greek companies have extended most of their oil supply deals with Iran for 2012, so that most of Tehran's supplies to the European Union are likely be exempted from sanctions for at least the first half of the year.

Trading sources told Reuters that Italy's Saras (SRS.MI), ERG (ERG.MI) and Iplom, Greece's Hellenic (HEPr.AT) as well as Spain's Repsol (REP.MC) have either extended or have not scrapped existing term supply contacts with Iran for 2012.

"We kept our 2-year deal with Iran," said a trader with a refiner.

"At the moment it is business as usual, but of course we are considering potential alternatives. Asking the Saudis for more crude is one possibility," said a trader with an Italian company.

Italy, Spain and Greece take some 500,000 barrels per day out of European Union's imports of Iranian oil of around 600,000 bpd, according to the latest available data.

Diplomatic sources told Reuters the three countries, the EU's most fragile economies, were pushing for a grace period for up to 12 months as an immediate switch to oil from other producers may prove too costly and painful for them.

Some diplomats said that when EU foreign ministers meet on January 23 to decide on sanctions, they will most likely agree on a compromise of six months for the grace period, and no longer.

Only existing deals would be granted that period while new or spot deals would not be exempted from sanctions.

European entities will also be allowed to continue receiving repayments in oil for debts they are owed by Iranian firms. These include Eni (ENI.MI) and Norway's Statoil (STL.OL) to whom Tehran owes $2 billion and $0.5 billion respectively and pays in oil and petroleum gas (LPG).

0911 GMT: Not Quite An Islamic Awakening. The website "598" claims that a conference in Qom on the "Islamic Awakening" was cancelled on Thursday when less than ten people showed up.

0905 GMT: Elections Watch. Kalemeh claims, from an "informed source", that reformist MP Mohammad Reza Tabesh defied former President Mohammad Khatami to stand in March's Parliamentary elections.

The website adds that Khatami is still insisting on conditions --- freeing of political prisoners, free elections with freedom for political parties, and adherence to the Constitution --- for participation in the campaign.

0900 GMT: Chest-Thumping of the Day. An interesting signal from Washington, put out through The New York Times:

The Obama administration is relying on a secret channel of communication to warn Iran’s supreme leader, Ayatollah Ali Khamenei, that closing the Strait of Hormuz is a “red line” that would provoke an American response, according to United States government officials.

The officials declined to describe the unusual contact between the two governments, and whether there had been an Iranian reply.

0855 GMT: Justice Watch. Nine teachers from Yazd have been given suspended sentences of 3 1/2 years each for "propaganda against the regime".

0835 GMT: The Tehran Bomb. While the regime tries to use Wednesday's bombing to its advantage, the reformist Islamic Iran Participation Front, condemning the murder of scientist Mostafa Roshan Ahmadi, adds that intelligence forces should combat terrorism instead of arresting citizens.

Another reformist party, the Mojahedin of Islamic Revolution, put out a similar declaration on Thursday.

0815 GMT: The Tehran Bomb. The assassination of scientist Mostafa Roshan Ahmadi has offered a platform for a major public-relations push by the regime. The Supreme Leader issued a message that the role of the "CIA and Mossad intelligence service" was a sign of the "dead end of global arrogance and Zionism". Ayatollah Khamenei declared that "the punishment of the perpetrators and those behind the incident can never be ignored".

Ayatollah Khamenei's remarks came on the second anniversary of the assassination of another scientist, Masoud Alimohammadi, and the Secretary of the National Security Council, Saeed Jalili, used the occasion to blame the US and Israel for Ahmadi Roshan's murder.

Beyond the ritual denunciation of Washington and West Jerusalem, there is a notable feature in the campaign, however. The regime, through its Ambassador to the United Nations and senior judiciary official Mohammad Javad Larijani, has called on the UN to investigate and denounce the killings. At the same time, it is blaming the UN and the International Atomic Energy Agency as accomplices to the US and Israel, both through Jalili and through media outlets such as Press TV.

Doing so, the Islamic Republic will try and push back against sanctions and the IAEA's findings on Iran's nuclear programme. Jalili was far from subtle on Thursday: “How come, despite such transparent cooperation [on the part of] Iran, [it] is still under constant threats, pressures and sanctions?”

0755 GMT: Sanctions Watch. More developments on Thursday to complement our snap analysis, "Are the Oil Sanctions Tightening on Tehran?"...

As US Secretary of Treasury Tim Geithner visited Japan, Finance Minister Jun Azumi offered further evidence that Tokyo, which buys 10% of its oil from Iran, will reduce but not suspend shipments: "We would like to take action concretely to further reduce in a planned manner [but] it would cause immense damage if they were cut to zero."

Chief Cabinet Secretary Osamu Fujimura later tried to soften the pledge, saying it was just one of many options under consideration, while Prime Minister Yoshihiko Noda told Geithner of his concern over the potential impact of the sanctions on the Japanese and world economy.

There are more signals of alternative supplies being arranged for Asian countries who cut import from Iran --- in addition to the visit of China's Premier Wen Jiabao to Saudi Arabia, the UAE, and Qatar this weekend, South Korea's Prime Minister will visit the UAE and Oman from Friday.

0730 GMT: There is a selection of diversions to begin Friday. You can take in President Ahmadinejad's stay in Cuba during his 4-nation Latin American tour, where he celebrated Iranian-Cuban ties and discussed affairs with Cuban leader Raul Castro --- Reuters prefers to feature Ahmadinejad's declaration that former leader Fidel Castro is "safe and sane".

Ahmadinejad later travelled to Ecuador, his final stop before returning to Iran, where he made more pro forma declarations, for example, about the Iranian nuclear programme: "They insult our country and our citizens, of course we will resist. The nuclear weapons are just an excuse, everybody knows Iran is not trying to develop a nuclear bomb.".

Or you can watch the aftermath of Wednesday's assassination of scientist Mostafa Ahmadi Roshan, which is overshadowing Ahmadinejad's tour in the Iranian media. Press TV's top four Iran stories use the event to denounce not only the US and Israel but also the United Nations, while proclaiming the support of the Organisation of the Islamic Cooperation and the Non-Aligned Movement for Tehran.

However, we will try to maintain focus on the primary story inside Iran. Although you will not see it in the Islamic Republic's headlines, Thursday brought more news of economic tensions, from the rumours that the Central Bank head would be replaced to pressure on the Government to suspend the second phase of subsidy cuts to confirmation of rising food prices.

This morning, we link those economic probems to an analysis of developments outside Iran, "Are the Oil Sanctions Tightening on Tehran?"