China and Russia would fight Iran oil sanctions

Reuters report Jan 19, 2006 says U.N. Security Council heavyweights China and Russia have too much riding on Iran's energy sector to let the West slap sanctions on Tehran to punish its nuclear ambitions, experts say. Excerpt:

Fears of supply disruption from the world's fourth largest crude exporter, along with rising tensions in fellow OPEC member Nigeria, sent U.S. crude oil futures to a three-month high near $67 per barrel this week.

The United States and three European Union nations are pressing the 15-member U.N. Security Council to take up the Iranian nuclear issue, which could open the door to potential oil sanctions.

But two key U.N. Security Council members that carry veto powers -- China and Russia -- have multibillion-dollar oil and natural gas projects hanging in the balance, and China depends on Iran's imports to quench its oil thirst.

"I have a hard time seeing how oil investments could be targeted given the interests of Russia and China," said Julia Nanay, a senior director at PFC Energy in Washington.

Iran wants to sign a major oilfield deal to give China's Sinopec a stake in the giant Yadavaran oilfield in southern Iran, which could require investment of at least $2 billion (1.1 billion pounds).

And Russia's LUKOIL holds a minority stake in the Anaran field in western Iran near the Iraqi border.

Iran raised the stakes in its row with the West this month by removing U.N. seals on equipment that purifies uranium, which can be used for power, or if highly enriched, in bombs.

The United States and the European Union's three biggest powers said talks with Iran on the issue were at a dead end, and moved to refer the matter to the Security Council.

Tehran denies accusations it is seeking nuclear weapons and says it needs nuclear technology to generate electricity.

China has blocked Security Council efforts to sanction countries like Sudan, where China has a huge oil deal. Sudan's Darfur region is beset by widespread violence between fractious rebel groups, government forces and a government-backed militia.

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