Iran

Lord Kerr of Kinlochard Excerpts

Tuesday 24th January 2012 Lords Chamber

[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.

[Lord Kerr of Kinlochard]

My Lords, the effect of sanctions may be to cause opinion in Iran to coalesce behind the Government, the risk to which noble Lords’ attention has been drawn by an expert. Will the Government do everything they can as imaginatively as possible to make clear that we have no quarrel with the Iranian people and that the quarrel is purely with the regime? Will the Government also urge their European partners to avoid unnecessary irritants in relations with Turkey, a country which has enormous experience of peaceful coexistence with Iran and a country whose expertise and experience is extremely important to us at this difficult time?

[Lord Howell of Guildford]

I give a most emphatic yes to both those propositions. Indeed, in relation to the second one, it is very important that we work very closely with Turkey, which has indicated very clearly that the idea of Iran becoming a fully weaponised nuclear power is extremely unwelcome to it and that it will combine with the necessary actions and strategies to prevent that. At present, the main strategy is pressure through sanctions, but there are other tracks of diplomacy to develop as well. One can pursue more than one track in these matters, but this is the one that we are now engaged on, which we hope will bring results.