Iran

Baroness Symons of Vernham Dean Excerpts

Tuesday 24th January 2012 Lords Chamber

[Lord Howell of Guildford]

This kind of approach would be very good, if we could get Iran to recognise that it must conform to the IAEA requirements and if we could have some trust and reassurance that it is not moving surreptitiously to the full weaponisation of its nuclear programme. If that assurance was there and if Iran was prepared to talk, we could certainly develop closer relations with what, after all, is a very great country that deserves respect—although it forfeits it by some of its actions—for its history and prominence in the region, and we could move in that direction. However, to get Iran even to come to the table on that basis has so far proved impossible.

[Baroness Symons of Vernham Dean]

My Lords, I regret to say that I very much agreed with the Minister when he rightly said that whichever part of the Iranian Government one looks at believes that Iran has the right to develop nuclear weapons. The problem with that is that it does not stop with the conflict with Israel; it drips into the conflict right across the Gulf, including, as he said, Saudi Arabia. Perhaps I may ask him about the short-term issue of access to oil. Can he tell us anything about Saudi Arabia’s undertaking to make up the shortfall in any Iranian crude, and whether its undertaking to try to hold the international price at $100 a barrel has been dealt with officially by Her Majesty's Government and that of Saudi Arabia?

[Lord Howell of Guildford]

We cannot yet to talk in terms of undertakings, but there have been indications. Obviously it is up to Saudi Arabia and other major oil producers in the region, such as Kuwait and the United Arab Emirates, to undertake to make up the shortfall. The indications are that this will be possible but we are not yet at the stage where I can say that undertakings have been officially agreed; they have not.

There is also a problem of matching the quality of oil concerned. As the noble Baroness knows, although the Iranian oil that Greece, for instance, has been heavily reliant on is slightly sour, the make-up oil from Saudi Arabia would be considerably sourer and would carry a much heavier sulphur content as well, so there would be difficulties for refiners. The usual complexities that arise when one moves oil flows around inside the oil market would occur, of the kind that I have just described. Therefore, I cannot say that there is a neat package of additional oil supplies ready to come into place. One has to realise that the Iranian oil does not necessarily disappear; it will not stop being produced and will probably continue to enter the market, although one imagines at a certain discount in relation to the major customers such as China.