The Latest from Iran (28 June): A Failing Foreign Policy?

1945 GMT: Sanctions Watch. The US has exempted China and Singapore from sanctions over purchases of oil from Iran, hours before restrictions would have entered into force against their banks.

Earlier Secretary of State Hillary Clinton had said (see 1413 GMT) that China and Singapore had “significantly reduced” their imports of Iranian crude.

1745 GMT: Nuclear Watch. Iranian state media says chief nuclear negotiator Saeed Jalili has written his counterpart for the 5+1 Powers (US, Britain, France, Germany, Russia, and China), Catherine Ashton, declaring the Islamic Republic of Iran is always ready to contribute to initiatives for successful talks.

However, Jalali cautioned that such talks are only possible in the framework of cooperation and when they are aimed at winning the trust of the Iranian nation. He said those who replace logic with illegitimate measures, i.e., sanctions, must be held accountable for any harm to the talks.

1735 GMT: Foreign Affairs (Syrian Front). The Iranian Foreign Ministry has announced that two engineers abducted in Syria last autumn have been released and will soon return to the Islamic Republic.

Five engineers were seized, as were two officials who went to Syria to seek their release. On 16 May, the Foreign Ministry announced that two of the men had been freed.

1725 GMT: Oil Watch. Industry sources say Saudi Arabia has reopened an old oil pipeline built by Iraq, bypassing Persian Gulf shipping lanes. The route means Riyadh can export more of its crude from Red Sea terminals should Iran try to block the Strait of Hormuz.

The Iraqi Pipeline in Saudi Arabia was laid across the kingdom in the 1980s after oil tankers were attacked in the Persian Gulf by both sides during the Iran-Iraq war. It has not carried Iraqi crude since Saddam Hussein invaded Kuwait in 1990.

Saudi Arabia confiscated the pipeline in 2001 to compensate for debts owed by Baghdad and has used it to transport gas to power plants in the west of the country in the last few years.

Last week industry sources said the United Arab Emirates would be able to export nearly half of its crude without using the Strait of Hormuz, using a new pipeline pumping a million barrels to the Gulf of Oman.

1715 GMT: Confidence or Concern? Hard-line cleric Ayatollah Ahmad Khatami offered a political and economic overview today. Some of the rhetoric was familiar bashing of the enemy within --- those who protested after the disputed 2009 Presidential election were "dictators"; reformists "could run for the Presidency 100 times and still wouldn't win".

Far more interesting, however, was this injunction to the Iranian people: "Don't complain about the increase in prices; that's what the enemy wants."

1445 GMT: Sports and God. Peyke Iran reports that religious "praisers" will accompany Iran's sporting teams at home and abroad.

1435 GMT: Food Watch. International grain traders say Iran's talks with both India and Pakistan on badly-needed wheat deals are deadlocked.

The plan was for Delhi to provide grain to pay in part for its import of Iranian oil; however, a Singapore trader said, "There is an issue of Karnal bunt (a fungal disease in wheat)....Iranians are not too keen on Indian wheat because of the quality."

A European trader added, "The Indian wheat cannot reach the standards the Iranians traditionally demand."

Trade sources said talks between Iran and Pakistan over a 1 million metric tonne wheat barter deal had stalled over price. In May, Islamabad said Iran offered $265 per metric tonne, but Pakistan asked for international prices of $312.

"There is no movement on the barter proposal with Iran at the moment. Given the delay, it is difficult to say when and if anything will happen," a Pakistan commerce ministry official said.

With domestic production badly affected by issues of management and subsidy cuts and the difficulties in arranging imports, bread prices are rising sharply in Iran.

1413 GMT: Oil Watch. US Secretary of State Hillary Clinton, speaking in Latvia, has assured that Beijing is cutting oil imports from Tehran, in line with the US-led sanctions effort, "China and Singapore both share our goals of preventing Iran from acquiring a nuclear weapon, and they appreciate that international sanctions and the pressure that these sanctions have brought to bear on the Iranian economy have been a key aspect of our dual-track policy over the years."

1357 GMT: Foreign Affairs Watch. Intervening in a curious story that has prompted much interest over the last 24 hours, Foreign Ministry spokesman Ramin Mehmanparast has denied claims in Cypriot media that Foreign Minister Ali Akbar Salehi was briefly detained when he visited Cyprus this week: "The fabricated report is yet another manifestation of the seemingly interminable campaign by Western media aimed at tarnishing the image of Iranian authorities and portraying the Islamic Republic in a negative light."

It appears that Salehi was briefly questioned by officials at Larnaca airport because his name was on an outdated "stop list" of Iranian officials barred from travelling within the European Union. Justice Minister Loucas Louca said there was a small delay of “two, three minutes” before Salehi was given the go-ahead to enter the country.

This, however, expanded into a claim of Salehi's arrest because of the circulation of this photograph, accompanied by the assertion that the Foreign Minister had been handcuffed:

1313 GMT: Political Prisoner Watch. Dr Hani Yazerloo has been sentenced to one year in prison and 15 years in exile.

1127 GMT: Oil Watch. Reuters summarises the situation with Asian customers of Tehran oil, writing that purchases from China, Japan, South Korea, and India have fallen 18% from January to May.

Iranian exports to the four countries fell 25% in May alone to 999,230 barrels per day from 1,338,193 bpd a year earlier, despite a recovery in sales to China after a sharp drop from January to April.

The 18% reduction amounts to a loss of around $24 million a day in Iranian oil earnings.

1118 GMT: Currency Watch. The Iranian Rial, already under pressure, has fallen more than 4% today against the US dollar, nearing the 20000:1 mark.

The Rial was bolstered by the Central Bank and Government this winter, correcting some of an 80% loss in value to reach 15600:1, but it has slid over the last month. It is now at 19990:1.

0758 GMT: The Battle Within. Leading MP Ahmad Tavakoli has called on the judiciary to take action against President Ahmadinejad's advisors, including 1st Vice President Mohammad Reza Rahimi, over corruption and fraud.

Tavakoli criticised the judiciary for not following up its declaration that there was "no red line" on prosecutions, noting that the "red line" around Ahmadinejad's Ministers and staff --- declared by the President last summer --- was still in place.

Tavakoli added, "The best gift of the judiciary in bringing people to justice is the 1st Vice President, so people can see with their eyes that no one can defy the judiciary."

Rahimi has faced allegations that he is involved with the multi-million dollar "Fatemi Street" insurance fraud; however, he is not among the defendants currently on trial.

0755 GMT: Economy Watch. Doesn't look like Speaker of Parliament is feeling too secure about the economy --- Fars reported on Wednesday:

"All MPs and officials have recently focused their attention on what has been noticed and found in the arrogant powers' behavior," Larijani said at an open session of the parliament, and explained that the country's officials have realized through the monitoring of the enemies' moves that they are trying "to bring Iranian economy into recession and disappointment".

He said that the arrogant powers are seeking to find some issues in Iran like increasingly expensive prices to portray them as the outcome of their bullying policies and declare to the world that they have been successful against Iran.

The speaker called on the Iranian officials to make jihad-like moves in the field of economy to supply people's needs.

0725 GMT: Loyalty Watch. Hojatoleslam Amrollah Mohammadi, one of the Supreme Leader's representatives in the Islamic Revolutionary Guards Corps, has commented on the crisis after the disputed Presidential election, "In 2009, it was only the Guards which supported the Leader to the very end."

0550 GMT: It has not been a good week for the Islamic Republic's foreign policy. The efforts of the Foreign Ministry to get leverage in the nuclear talks, appealing to European states in an attempt both to distance them from the US and to delay oil sanctions scheduled for 1 July, were undercut by 1st Vice President Rahimi's headline-grabbing announcement that Jews control the international drug trade. The victory of the Muslim Brotherhood's Mohamed Morsi in the Egyptian Presidential contest, which should have been an occasion to promote the Supreme Leader's vision of the "Islamic Awakening", became tragi-comedy --- Revolutionary Guards and Presidential outlets fought over the authenticity of Fars' claimed interview with Morsi. President Ahmadinejad's Latin American tour brought disappointment, as his Brazilian counterpart refused to see him, and ridicule from conservative sites such as Alef.

The bureaucratic conflict over foreign policy is far from new --- in 2010, there was warfare within the establishment as President Ahmadinejad appointed special envoys and fired Foreign Minister Manouchehr Mottaki. However, this week's developments, given the high stakes, have brought a flurry of denunciations from former Iranian diplomats.

• Ali-Akbar Farazi, former ambassador to Romania: The Foreign Ministry has been purged of experts.
• Javad Mansouri, former ambassador to China: The Foreign Ministry no longer takes any decisions and the Presidency has taken control.
• Shams al-Din Khareqani, former ambassador to Germany: There is instability within the diplomatic corps of the Foreign Ministry.
• Mohammad Ebrahim Taherian, former ambassador to Afghanistan and Pakistan: Inexperienced personnel are being used at the Foreign Ministry.

There was one bit of good diplomatic on Wednesday, with Foreign Minister Ali Abkar Salehi announcing that Iran and Britain were restoring a level of diplomatic relations, after the British Embassy was effectively closed last November when it was stormed by a pro-regime crowd and the British Government expelled the Islamic Republic's diplomats. Salehi, who met British Foreign Secretary William Hague in Afghanistan earlier this month, said Oman will handle Iranian interests in London while Sweden will represent British interests in Tehran.

Still, the bigger developments on the international front bring into question not only the state of Iran's foreign policy but also of its political establishment. As the Supreme Leader declared on Wednesday:

The cabinet, the legislature and the judiciary are all at the unified front of defending Islam, the Iranian nation, and independence and identity of the country in the face of the struggle of the arrogant powers. By avoiding peripheral and hostile issues, they should help each other.