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Are Oil Prices a Motivating Factor for Negotiations?

Uncategorized Comments (6)

On Laura Rozen’s War and Piece site, there is speculation:

“Everyone seems to have missed the obvious: The State Department’s third man is going to [talk with] Iran to send oil prices down. I’m sure Paulson told Bush this was the only way to stop a panic.” Almost certainly part of it. (And is it working?)

Indeed, a US official involved with Iran policy wrote me a couple weeks back that high oil prices had severely crimped their policy: “It’s clear that the two-track policy put in place a number of years ago (incentives vs. sanctions) has been overtaken somewhat by the unforeseeable and dramatic rise in oil prices. Iran’s GDP has doubled, and they are more isolated from the effects of economic sanctions. At the same time the Iranians have made significant progress on enrichment. There are many, many more economic sanctions in the quiver, but we have carefully resisted imposing economic sanctions, unilaterally or multilaterally, that would significantly affect the Iranian people. Our goal remains an Iran without nuclear weapons, and our strategy remains the two-track approach. In light of the rise in oil prices and Iran’s enrichment achievements, the interim objectives that the two-track strategy should be aiming to achieve is something everyone is looking at, and there is no question that there is a way forward. …”

Irancove @ July 18, 2008

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