By: Dr. Mike Campbell
The function of the International Atomic Energy Agency (amongst other things) is to ensure that countries which have signed up to the nuclear non-proliferation treaty honour their obligations and do not divert any material from civil programmes to a clandestine nuclear weapons programme. This is essentially a game requiring honesty from the nation states involved. True, the IAEA has teams of safeguards inspectors that both perform nuclear accountancy on the civil programmes to ensure that no material is diverted and conduct on-site and environmental sampling campaigns which are designed to detect illicit activities on a forensic basis. However, the IAEA is only allowed to inspect declared nuclear sites and must (usually) provide advanced notification of inspection.
The western powers have long suspected that oil-rich Iran is trying to develop nuclear weapons capacity – a contention hotly denied by the Iranians. However, satellite imagery, prevarication on the part of the Iranians and intelligence all strongly suggest that the Iranians are seeking to become a nuclear power in a very volatile region.
The Iranians have made bellicose statements about the State of Israel in the past and it is clear that Israel, the leading military power in the region, will not tolerate a nuclear-armed Iran. The Americans have also made their objections to this scenario abundantly clear. President Obama stated this past weekend that he would not rule out a military option to prevent, or delay, Iran from acquiring weapons of mass destruction, but he was quick to stress that the diplomatic option remains his favoured solution.
Oil is critical to the modern world and Iran has stated that it will close the Strait of Hormuz in the event of conflict. Something like 40% of the world’s oil passes through this vital waterway. In the event of heightened international tension, the price of crude oil is likely to rise, perversely, the price of Brent crude has come off recent highs, dropping back 1.5% to $123.7 a barrel for April delivery. However, a lengthy period of international tension would see the oil price rising dramatically which would choke of the global recovery, such as it is. Some estimates suggest that Iran could be as little as 8 months away from producing a viable nuclear weapon.