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Iran to Respond to Incentive Package

By The Media Line/Rachelle Kliger

Iran plans to respond on Tuesday to an incentive package, which urges Tehran to abandon its nuclear program.

Iran will formally respond in writing to an offer of incentives, in exchange for Iran suspending its uranium enrichment activities.

In view of Iran's negative responses to previous such initiatives, it is not likely to comply with the latest international demands.

Iran has been under international pressure since 2002 to abandon its nuclear program. World powers fear Tehran is covertly manufacturing nuclear weapons and are using the carrot and stick approach, but so far, no offers of incentives have yielded results.

The United States is not ruling out any options against Iran, including military strikes on the country's nuclear facilities. However, analysts say this is not likely to happen in the run-up to the U.S. presidential election.

Iran insists its atomic program is for the peaceful purposes of producing energy and upholds its right to possess nuclear energy.

The United States, Britain and France expressed disappointment that Iran did not meet the initial Saturday deadline to respond to the incentives.

These three countries, as well as Germany, Russia and China, have offered Tehran economic, political and security incentives to urge Iran to suspend nuclear activities.

If Iran responds negatively, more sanctions will likely be imposed.

Tehran is already under three sets of sanctions imposed by United Nations Security Council resolutions, and has repeatedly defied international demands to freeze its atomic program.

Meanwhile, Iran said on Monday it had successfully tested a long-range naval missile which would be capable of targeting vessels passing through the Strait of Hurmuz.

The Gulf and the Strait of Hurmuz are the most important and strategic waterway for oil exports in the region and any obstruction there could cause a crisis in the global oil industry.

Iran has threatened to shut down strategic waterways in the Gulf, consequently cutting off major supplies of oil and energy from the Gulf to the West as a response to any attack on its soil.

Around 60 percent of the world's oil supply goes through these waterways.

Tension between Iran and the West, especially the United States and Israel, is on the rise as both sides are exchanging verbal threats and are ostensibly planning a military showdown.

Regional powers are well aware of the negative impact that a closure of the Strait of Hurmuz could have on their economies and are preparing accordingly.

Kuwait, the world's seventh largest oil producer, has said it is examining the possibility of storing its vast oil reserves abroad, according to the Arab Times.

The Gulf is the only export route for Kuwait, a member of the Organization of the Petroleum Exporting Countries (OPEC).

Sources said Kuwait was considering setting up storage facilities in Asian countries such as China and Vietnam. The country already has a deal to store two million barrels of its crude oil in South Korea.

This is also a strategic necessity for countries like China which has emerged as a vast oil consumer and wants to ensure its oil supply will not be cut off by any future instability in the Gulf.