BRUSSELS, Jan 17, (Agencies): European Union president Denmark has proposed that EU states launch a full embargo on imports of Iranian crude oil from July 1, allowing a grace period of nearly six months for existing contracts, EU diplomats said on Tuesday.
EU governments have already agreed in principle to impose a ban on Iranian crude as part of Western efforts to ratchet up pressure on Tehran over its nuclear programme. But details of how and when the ban will be implemented are still being ironed out and are being watched closely by edgy oil markets.
The compromise proposal aims to appease concerns among some of the EU’s 27 governments about the economic impact of a ban on their economies, suffering from two years of debt turmoil.
Under the Danish proposal, EU states would have until the end of June to fulfil existing contracts once an embargo is imposed, but would have to cease all imports at the start of July.
The Danes put forward the compromise late on Sunday in an effort to bridge differences between countries such as France, which was seeking only a three-month grace period, and Greece, which was asking for as long as 12 months.
EU diplomats say the aim is to finalise discussions on the details of the planned embargo by the next meeting of EU foreign ministers on Jan. 23, paving the way for its introduction days later.
“The Danish presidency has made a proposal that the full embargo would start on July 1. There is no agreement yet,” one EU diplomat said, speaking on condition of anonymity.
Denmark holds the EU’s rotating presidency between January and the end of June, a role which gives it responsibility for organising the EU’s agenda and chairing policy debates.

Contracts
During discussions in recent weeks, some EU states have demanded they be allowed to meet existing contracts for as long as 12 months after the ban is imposed. Greece, in particular, lobbied for leeway because of its heavy dependence on Iranian oil.
One EU diplomat said Greece was still withholding its approval for the Danish proposal, while it sought to secure alternative supplies of crude. Any decision will have to be unanimously agreed by all member states.
Another issue still being discussed was whether a review period would be agreed for the embargo. It was also unclear whether there would be a deal to impose sanctions on Iran’s central bank, which is now proscribed by the United States.
Iran on Tuesday warned US ally Saudi Arabia to rethink plans to compensate for Iranian oil exports cut by sanctions, and boosted security for its targeted nuclear workers as it dug in under its showdown with the West.
Foreign Minister Ali Akbar Salehi told Riyadh to “reflect” on a vow to open its oil taps to make up for an imposed reduction in Iran’s oil sales.
He said such a position was viewed as “not friendly.”
At the same time, President Mahmoud Ahmadinejad has ordered security stepped up for all of Iran’s nuclear workers following the assassination last week of a key scientist, First Vice President Mohammad Reza Rahimi said.
The moves signalled a hardening of Iran’s stance as it confronted intense pressure over its controversial nuclear programme through Western sanctions impacting its economy, and a covert campaign including murder and sabotage.
Already, the Islamic republic has started new uranium enrichment operations at a heavily defended bunker southwest of Tehran, and it is preparing to hold more navy war games in the Strait of Hormuz at the entrance to the Gulf, a strategic chokepoint for much of the Middle East’s oil.
The tensions have raised the spectre of possible military action.
Speculation has increased of Israeli air strikes against Iranian nuclear sites, and Washington has deployed warships near the Strait of Hormuz to ensure the channel stays open.
Gestures to defuse the tensions have so far made little progress.
Iran says it is now willing to restart talks with world powers on its nuclear activities that collapsed a year ago, but it has not formally responded to a EU letter offering a resumption of the negotiations.
The US government in recent days sent a letter to Iran’s leaders, with whom they have had no direct contact in more than three decades.
But Foreign Minister Ali Akbar Salehi, quoted by ISNA news agency, said it contained “nothing new”.
His spokesman added that Iran would only reply to it “if it’s deemed necessary”.
The International Atomic Energy Agency is planning on sending a high-level delegation to Iran within weeks to discuss suspicions over the nuclear activities. Western diplomats at IAEA headquarters said the visit should occur on Jan 28.
But Iran’s foreign ministry said that no date has yet been fixed, and that it would take place “in the near future”.
Relations between the West and Iran, long dogged by mutual mistrust, have sunk to a dangerous low in the past three months because of a succession of developments.
They include: US allegations of an Iranian plot to kill the Saudi ambassador to Washington; the storming of the British embassy in Tehran by a pro-regime mob; Iran’s capture of a CIA drone; and Iranian threats against the US navy in the Gulf.
Other complications this month have come in the form of a death sentence against an American-Iranian former Marine arrested in Tehran on suspicion of spying for the CIA, and a dramatic decline in the value of Iran’s currency following new US sanctions.
There is potential for further degradation, however.

Supplies
The United States has been working with oil producers to ensure global supplies flow smoothly and ease concerns about a cut-off of crude from Iran, which faces tougher sanctions for its suspected pursuit of nuclear weapons, a senior official said on Tuesday.
US Deputy Secretary of Energy Daniel Poneman also said Washington had been in talks with all oil importers to find alternatives to Iranian supply and would work to avoid any price shocks.
Countries such as South Korea, the world’s fifth-largest oil importer, have warned they would find it difficult to replace Iranian supplies, and many have been concerned that sanctions pressure could lead to higher oil prices.
“We are working with oil producing nations and oil consuming nations to study ways in which we can make sure that as countries reduce their purchases of Iranian oil, that the weight of that burden falls on Iran, not on the rest of the world,” Poneman told journalists.
“The idea is to do this in a manner that does not hurt the growth of any of our countries,” he said.
Major importers of Iranian oil were long loath to embargo the lifeblood of Iran’s economy because of fears this would send oil prices rocketing at a time they could least afford it due to debt and deficit crises and high unemployment.
But strong momentum for oil sanctions has been created by a UN watchdog report, which said Iran appeared to have worked on designing an atom bomb.

Security
Iran has boosted security for all its nuclear workers after one of its scientists was assassinated last week, First Vice President Mohammad Reza Rahimi said Tuesday.
“Whoever is active in the nuclear field will be put under special care,” Rahimi said in remarks reported by the official IRNA news agency.
The order was given by President Mahmoud Ahmadinejad, Rahimi said.
ISNA news agency quoted the vice president as saying the additional measures were on top of ones ordered 10 months ago for Iran’s nuclear scientists.
“This time around, the government ordered that anyone who is active in the nuclear field, from low levels to higher ups, be under surveillance and put under special care,” Rahimi said.
Iran’s police chief, Ismail Ahmadi Moghaddam, told reporters Tuesday his forces and the elite Revolutionary Guards would provide the security for nuclear personnel.
“The job has been divided between us and the Guards. Security details will be introduced for all of them, based on their importance,” Mehr news agency quoted him as saying.
The new security order was given after Mostafa Ahmadi Roshan, a 32-year-old deputy director of Iran’s main uranium enrichment plant, was murdered on Jan 11 along with his driver when assassins on a motorbike fixed a magnetic bomb to their car.

Deter
A nuclear-armed Iran could deter Israel from going to war against Tehran’s guerrilla allies in Lebanon and the Gaza Strip, a senior Israeli general said on Tuesday.
The Jewish state sees the makings of a mortal threat in Iran’s uranium enrichment and missile programmes, and has lobbied world powers to roll them back through sanctions while hinting it could resort to pre-emptive military strikes.
Major-General Amir Eshel, head of strategic planning for the armed forces, echoed Israeli government leaders who argue that Iran, which denies wrongdoing but rejects international censure over its secretive projects, could create a “global nuclear jungle” and fuel arms races in an already volatile Middle East.
Eshel made clear that Israel — widely reputed to have the region’s only atomic arsenal — worries that Syria and Lebanon’s Hezbollah militia as well as Palestinian Hamas Islamists who rule Gaza could one day find reassurance in an Iranian bomb.
“They will be more aggressive. They will dare to do things that right now they would not dare to do,” he said in a briefing to foreign journalists and diplomats.
“So this is going to create a dramatic change in Israel’s strategic posture, because if we are forced to do things in Gaza or Lebanon under an Iranian nuclear umbrella , it might be different.”
Eshel, who spoke at the conservative Jerusalem Centre for Public Affairs think-tank, quoted an unnamed Indian officer who, he said, had described the Asian power’s friction with nuclear-armed rival and neighbour Pakistan in terms of self-restraint.
A woman whom police described as an activist on behalf of Iranian women’s civil rights was found shot dead at the wheel of her car after it crashed into a Houston townhouse garage.
The car was still running when police found the body of Gelareh Bagherzadeh, 30, behind the wheel about 12:30 am Monday in a posh townhouse development about a miles (1.6 kms) west of Interstate 610, Officer J.C. Padilla said.
“When the officer arrived, the car’s tires were still spinning. He had to reach in and turn off the motor,” he told KPRC-TV of Houston.
Bagherzadeh apparently was talking on the phone with an ex-boyfriend when she was shot, police Homicide Sgt. Richard Bolton said.
“He heard a loud thud — doesn’t recall hearing any gunshots, but a loud thud — and then a screeching noise. He said it sounded like someone driving away,” Bolton told KHOU-TV of Houston.
Bolton said police have questioned the ex-boyfriend but he is not a person of interest in the case.
State radio says an Iranian company is sending the United States a model of the American surveillance drone captured by the Islamic Republic.
Tuesday’s report said the company will send the miniature of the RQ-170 Sentinel stealth drone to the Obama administration in response to a formal request from Washington last month asking Tehran to return the aircraft that went down over Iran in December.
State radio said the model will be one eightieth the size of the original aircraft. The report says the company also plans to sell the models on the Iranian market for about 70,000 rials, or around $4.
The Iranian government has rejected Washington’s request to return the drone, calling the aircraft’s incursion of Iranian airspace an “invasion” and a “hostile act.”