Oil higher in Asia trade on Chinese demand hopes

Oil was higher in Asian trade today after figures showing a rise in manufacturing activity in China, the world's largest energy user, analysts said.

New York's main contract, West Texas Intermediate crude for delivery in May, gained 33 cents to USD 103.35 per barrel while Brent North Sea crude for May settlement was up 44 cents at USD 123.32.

Official data released yesterday showed China's manufacturing activity rose to the highest level in a year in March, energising oil prices, analysts said.

"China's manufacturing data helped edge up oil prices with hopes of strengthening demand (from the world's second biggest economy), said Justin Harper, market strategist at IG Markets Singapore.

The China Federation of Logistics and Purchasing said Sunday the official purchasing managers index (PMI) rose to 53.1 from 51 in February, helped by an increase in new orders.

It marked the fourth consecutive month of expansion for manufacturing activity. A reading above 50 indicates expansion, while a reading below 50 suggests contraction.

Tensions between the West and major crude producer Iran continue to lend support to oil prices as investors fret over possible supply disruptions from the Islamic republic.

The two sides are at odds over Iran's nuclear programme which Tehran has said is for civilian purposes but the United States and its allies believe the country is working towards nuclear weapons capability.

Iran has previously threatened to shut the strategic Strait of Hormuz -- a conduit for a fifth of global oil supply -- if it is hit by further sanctions from the West.

'Pushed to a corner', Iran could drop a bomb

Pre-emptive military strikes aimed at forcing Iran to abandon its nuclear activities may end up having the opposite effect: convincing the Islamic Republic's leaders they need an atomic arsenal to secure their hold on power.

That is the argument from those in the West and elsewhere who say the negative impact of an Israeli or US attack would eventually outweigh any gains - pushing Iran towards a decision that Western intelligence services believe it has not yet taken.

"It is difficult to see a single action more likely to drive Iran into taking the final decision to acquire nuclear weapons than an attack on the country," the Foreign Ministers of Sweden and Finland said in an opinion piece in the New York Times. "And once such a decision was made, it would only be a matter of time before a nuclear-armed Iran became a reality," Carl Bildt (Sweden) and Erkki Sakari Tuomioja (Finland) added.

Israel says Iran's nuclear ambitions are a threat to the Jewish state's very existence and that time is running short to stop Tehran taking the irreversible step of acquiring the bomb.

But an attack may delay Iran's nuclear drive only by a few years and would probably lead to an acceleration of the atomic programme, the expulsion of UN inspectors and the Iranian people rallying around their leaders, the International Crisis Group think-tank said in a report citing unnamed US officials.

"Once UN inspectors are expelled, Iran could reconstitute its nuclear infrastructure, this time unambiguously geared to producing a bomb," said ICG analyst, Ali Vaez.

A similar message came from former CIA director Michael Hayden, who said the George W Bush administration had concluded that a strike on the Islamic Republic's nuclear sites was a bad idea, according to a Foreign Policy magazine blog.

An attack would guarantee the very thing that the West was trying to prevent - "an Iran that will spare nothing to build a nuclear weapon and that it would build in secret", Hayden was quoted as telling reporters and experts in January.

Iran is relatively weak in conventional weaponry, compared to Israel and other Middle Eastern states, and may feel it has little choice but to develop nuclear bombs if "pushed into a corner", said military researcher Pieter D Wezeman.

"If Israel or the US would try to attack Iran and its strategic centres and its industry, Iran basically does not have the conventional means to defend itself," Wezeman, of the Stockholm International Peace Research Institute, said.

"Based on that weakness they are likely to find nuclear arms an interesting option. They don't want to be seen as losers, not internationally and not within Iran."

Any such feeling of military vulnerability in Iran - which often accuses adversaries of plotting to overturn its Islamic Revolution - would be compounded by Israel's assumed nuclear arsenal and the still strong presence of US armed forces in the volatile Gulf region.

"Zone of immunity" worries Israel

There is general agreement among Western powers that Iran has already taken steps that would give it the option of becoming a nuclear-armed power, if it so decided.

It has ramped up its uranium enrichment, the UN nuclear watchdog said last month, voicing "serious concerns regarding possible military dimensions" to the nuclear activities.

Western experts say Iran now has enough refined uranium -material which can yield energy or weapons, depending on the level of enrichment - for four bombs if processed much further.

Crucially, however, the US administration has concluded that Iranian leaders have not decided whether to actively construct a nuclear weapon.

"The US intel community says with high confidence that Iran has made a capability decision, not a bomb decision," said Jim Walsh, a research associate at the Massachusetts Institute of Technology (MIT). "Bombing them will produce a bomb decision, and that will be very difficult to stop."

Iran expert Trita Parsi said: "You can't convince a country that it doesn't need a nuclear deterrence by bombing it."

But Bruno Tertrais of the Strategic Research Foundation, a French think-tank, said nobody could claim to know the impact of an attack and he suggested it could be difficult for Iran to launch a nuclear weapons bid afterwards. "Iran would be closely monitored and would then take the risk to be bombed again, before it actually produces deliverable weapons," Tertrais said.

"One needs to differentiate between an Israeli and an US operation: the latter would be bigger, leave few stones unturned, and might very well shake up the foundations of the regime."

Israel has threatened Tehran with pre-emptive strikes if diplomacy fails to stop its nuclear progress. US President Barack Obama said all options are on the table, including possible military action, in dealing with Tehran.

Israel worries that Iran will soon have moved enough of its nuclear programme underground as to make it virtually impervious to a unilateral Israeli attack, creating what Defence Minister Ehud Barak has referred to as a "zone of immunity".

But Obama - who has accused US Republican presidential candidates of "beating the drums of war" while failing to consider the consequences - is also encouraging Israel to give sanctions against Iran more time to have an effect. The Jewish state this week played down the prospect of an imminent attack, saying Iran's nuclear programme could still be set back by sanctions and sabotage.

Six world powers and Iran are in mid-April expected to resume long-stalled negotiations aimed at finding a diplomatic resolution to the nuclear dispute, a dialogue which may for now cool speculation of imminent war. "I'm not optimistic on the talks, but I do think they could at the very least open a temporary breathing space for all sides," said Gala Riani of risk consultancy, Control Risks.

One arrested for Israel embassy car blast in Delhi

An Indian national has been arrested in connection with the February 13, 2012 blast in an Innova car belonging to the Israeli Embassy in Delhi. The 50-year-old man, claiming to be a journalist and identified as Syed Mohammed Kazmi, is the first person to be detained in the case in which the wife of Israel's defence attache, Tal Yehoshua, and the driver of the car were injured. He will be produced in the Tis Hazari court on Wednesday afternoon.

Kazmi has been arrested for allegedly being part of the conspiracy to plant the bomb on the car. He claims to have been writing for an Iranian publication and was arrested up after a probe showed that he had been in touch with the suspect who is believed to have stuck the magnetic bomb on Israeli embassy car.

Sources say police are close to a breakthrough in the blast case, which Israel has blamed on Iran.

According to the police a stick-on bomb was planted on the car by two men on motorcycle.

Israeli authorities pointed out that February 12 was the death anniversary of a senior Hezbollah leader, and the blast may not be entirely coincidental.

William Hague: Iran can start 'Cold War' in Middle East

Iran is clearly trying to develop a nuclear weapons capability, and if it succeeds it will set off a dangerous round of nuclear proliferation across the Middle East, British Foreign Secretary William Hague said in an interview.

Iran says its uranium enrichment program is purely for civilian purposes, but Western powers suspect Tehran is trying to develop the ability to produce nuclear weapons.

Western powers have been pressing Tehran to hold substantive talks on its nuclear program and want it to halt its uranium enrichment, but Iran says it has an absolute right to press ahead with its plans.

Several rounds of increasingly punitive United Nations and Western sanctions have failed to persuade Iran to stop its enrichment program, some of which has been moved to underground buildings for greater security.

The Iranians "are clearly continuing their nuclear weapons program”, Hague told, "If they obtain nuclear weapons capability, I think other nations across the Middle East will want to develop nuclear weapons."

"The most serious round of nuclear proliferation since nuclear weapons were invented would have begun, with all the destabilising effects in the Middle East, and the threat of a new Cold War in the Middle East without necessarily all the safety mechanisms," he said. "That would be a disaster in world affairs."

There has been public discussion in Israel about whether it should attack Iran to stop it from developing a nuclear bomb, and tension between the two foes has been raised by attacks on Israeli diplomats abroad and the recent assassination of an Iranian nuclear scientist in Tehran.

"We are very clear to all concerned that we are not advocating military action," Hague said in the interview. "We support a twin-track strategy of sanctions and pressure, and negotiations on the other hand."

"We are not favouring the idea of anybody attacking Iran at the moment," he added.

The latest signal from Tehran that it might be willing to resume talks on the nuclear issue, in the form of a letter to European Union foreign policy chief Catherine Ashton, have been greeted with cautious optimism by the United States and the European Union.

Malaysia: An Iranian involved in bomb plot in Thailand

The Malaysian authorities on Today said that an Iranian national, allegedly involved in a botched bomb plot in Thailand, was trying to fly to Iran when he was held in the capital Kuala Lumpur.

Masoud Sedaghatzadeh was arrested on Wednesday at Kuala Lumpur's international airport.

The 31-year-old Sedaghatzadeh’s arrest showed Malaysia was "very serious and committed'' in addressing the threat of terrorism, said Home Minister Hishammuddin Hussein.

"The authorities of this country will never allow Malaysia to become a location, base, or transit point for terrorists or individuals who are wanted by any other country,'' he said in a statement.

Hussein refrained from giving further details.

A statement released by Malaysian police chief Ismail Omar late Wednesday said, “The Iranian was arrested under the Immigration Act of Malaysia out of intelligence provided by Thai counterparts.”

“He is being investigated for terrorism activities in relation to bombings in Thailand.”

Meanwhile, a top Thai policeman said on Thursday that the three Iranians detained after accidentally setting off explosives in Bangkok were planning to attack Israeli diplomats.

US downplays Iran's nuclear advance programme "hype"

The United States on Wednesday downplayed Iran's latest announcement of nuclear progress, saying Tehran's reported advances were "not terribly new and not terribly impressive”.

"We frankly don't see a lot new here. This is not big news. In fact it seems to have been hyped," State Department spokeswoman Victoria Nuland told.

In the meantime, the White House said Iran is lashing out at the world to "distract attention" from the damage that international sanctions are having at home.

At a ceremony held in Tehran on Wednesday, Iranian President Mahmoud Ahmadinejad unveiled nuclear fuel rods, new generation of centrifuges and a number of radioactive medicines for the treatment of cancer.

He also fed a homemade fuel rod made out of 20-percent enriched uranium into the core of the Tehran Research Reactor.

Iran state media also reported steps to cut oil exports to six European countries in retaliation for new European Union sanctions, including a ban on Iranian oil.

White House press secretary Jay Carney says such "defiant acts" show that Iran's leaders are under pressure.

The sanctions are intended to persuade Iran to back down. Iran has refused, although it signalled on Wednesday that it is willing to return to talks.

Nuland also confirmed that EU foreign policy chief Catherine Ashton had got a response from Saeed Jalili, Iran's chief nuclear negotiator, to the letter she sent in October last year, a move the West had been demanding as a precondition for the resumption of talks with Iran over its controversial nuclear programme.

"Our interest is in Iran abiding by its international obligations, renouncing its interest in nuclear weapons and returning to the international community," Carney said.

"And that path remains open to Iran as long as it is interested in talks that they would approach in a constructive manner," he told reporters aboard Air Force One en route to Wisconsin state.

The West suspects that Iran is developing nuclear bombs under the cover of its nuclear programme. But the Islamic republic insists the programme is only for power generation and medical purpose.

Lebanese connection in the Israeli embassy car incident

Two days after a bomb attack on an Israeli embassy car in the heart of national capital left a woman diplomat seriously wounded, the intelligence agencies have now directed their probe to determine a possible Lebanon connection to the incident.

In view of the known Iran-Israel hostility, the investigators probing the incident have now focused their probe on Lebanese students residing in the national capital to determine if they are, even remotely, connected to Lebanon-based terror outfit Hezbollah.

The security agencies are trying to verify the vital info, which they have reportedly received from Israel, about 50 suspicious Iranian and Lebanese nationals, who might be living in disguise of student to carry out such attacks.

Therefore, the security officials are maintaining a close vigil at all places including hostels and residential colonies where Lebanese students reside.

Hours after the attack on its diplomats in India and Georgia, the Israelis accused Iran and Lebanon-based terror outfit Hezbollah for the assault. However, Iran later vehemently denied the accusations.

What has prompted the investigators to probe the Lebanese angle is the viewpoint held by Israelis that the assault on its diplomats could be handiwork of Iranians, who may be engaged in a tit-for-tat.

It is widely believed across the world that Israeli agents carried out repeated limpet mine attacks against Iranian nuclear scientists in Tehran, killing a few crucial figures. These strikes initially seemed mysterious but international experts eventually zeroed in on Israel, which aims to thwart Iran’s nuclear ambitions.

Hence, the Indian investigators have reasons to believe that Iran or Hezbollah may be involved in the attack on Israeli diplomats in the two countries.

Although, the investigators have no proof yet to name any country or foreign terror group for the attack, they are not ruling out any possibility.

Importantly, the forensic report regarding the incident has also been sent to the Home Ministry.

Meanwhile, the forensic experts from Israeli spy agency Mossad are also expected to arrive in the country today to assist their Indian counterpart in probing the incident.

As a precautionary measure, Delhi police have called for an urgent review of security arrangements in highly protected zones and the security cover given to VVIPs.

Addressing a press conference yesterday, Union Home Minister P Chidambaram said that Monday’s attack on an Israeli embassy car was carried out using a bomb with a magnetic base.

Later, Union Home Secretary RK Singh said there was no evidence to suggest involvement of any country in the bomb attack on an Israeli diplomat here.

Iran will present its atomic program advance today

Iran will present a new advance in its atomic program on today by loading domestically made nuclear fuel into a research reactor in the capital Tehran, a senior Iranian official told a Russian news agency.

Russia's RIA news agency, in a story from Tehran, quoted Ali Bagheri as saying President Mahmoud Ahmadinejad would attend the event at a reactor which is running out of nuclear fuel originally provided by Argentina in the 1990s.

The move appeared designed to show that increased sanctions are failing to halt Iran's technical progress and to strengthen its hand in any renewed negotiations with the major powers.

Diplomats believe Iran has in the past sometimes overstated its nuclear achievements to gain leverage in its standoff with Western powers, which suspect Iran is seeking to develop the means to make atom bombs, a charge the country denies.

The RIA story gave few details and it was not clear whether the development was linked to Iran's announcement last month it had made and tested fuel rods for use in nuclear power plants.

Ahmadinejad said on Saturday Iran would soon announce new advances in its nuclear program.

"Fuel elements, for the first time created by Iranian scientists, will in the presence of the President ... be loaded into the Tehran research reactor," Bagheri, deputy secretary of Iran's Supreme National Security Council, was quoted as saying.

Mark Hibbs, a nuclear expert at the Carnegie Endowment for International Peace, said he did not believe the Iranian announcement signalled any mass production of nuclear fuel.

"We are talking about laboratory-scale production of a single element for the reactor," he said.

Spent fuel can be reprocessed to make plutonium, potential bomb material, but Western worries about Iran's nuclear program are focused on its enrichment of uranium, which can also provide the core of nuclear weapons if refined much more.

Western powers fear that Iran's uranium enrichment program is part of a covert bid to develop the means to build atomic weapons - suspicions that were given independent weight by a detailed UN nuclear watchdog report late last year.

Iran says it is refining uranium for a planned network of nuclear power plants. The Tehran research reactor makes medical isotopes to treat cancer patients.

"They want to show that they have the technical expertise to master the fuel cycle," one European diplomat in Vienna said. "It would not be entirely unlike them - even at a time when they are feeling under pressure - to try to make another demonstration of that."

There was no immediate comment from the International Atomic Energy Agency, the Vienna-based UN nuclear watchdog.

In 2010, Iran alarmed the West by starting to enrich uranium to a fissile purity of 20 percent, up from 3.5 percent usually required for power plants, bringing it significantly closer to the 90 percent level required for weapons.

Iran said it was forced to take this step to make fuel for the Tehran research reactor after failing to agree terms for a deal to obtain it from the West. But many analysts doubted it would be able to convert its uranium into special reactor fuel.

"To provide fuel for the Tehran research reactor, as Western countries were not ready to help us, we have started to enrich uranium to 20 percent," RIA quoted Bagheri as saying.

Hibbs said the announcement of domestically made fuel was meant to show the world that Iran's intentions were peaceful.

"The message of this is that the higher enriched uranium that they are producing is for peaceful use," he said.

US urges South Korea to cut oil imports from Iran

A senior US official is urging South Korea to reduce its crude oil imports from Iran to put pressure on Tehran over its nuclear program.

US State Department official Robert Einhorn on Tuesday also urged Seoul to "unwind" its financial dealings with Tehran's central bank.

South Korea restricts financial dealings with more than 200 groups and individuals with suspected links to Iran's nuclear program. But Seoul hasn't yet announced plans to cut oil purchases from Iran.

Einhorn told that Washington is sensitive to its allies' economic interests with Iran. But he says the world should pressure Iran into negotiating seriously over its nuclear program.

Iran says that program is for peaceful purposes.

Iran ready to start nuclear work in bunker: Report

Iran could soon begin sensitive atomic activities in an underground facility deep inside a mountain, a report said on Wednesday, a move that would up the ante in a stand-off with big powers demanding Tehran curb such work.

Iranian experts have carried out the necessary preparations at Fordow near the Shi'ite Muslim holy city of Qom, paving the way for the Islamic Republic to start higher-grade uranium enrichment at the site on a former military base.

The machines, equipment and nuclear material needed have been transferred and installed at Fordow, the sources added, suggesting the work itself -- until now conducted above ground at another location -- could start when Iran takes the decision.

"They are ready to start feeding," a diplomatic source said, referring to the process in which low-enriched uranium gas is refined by centrifuges to increase the fissile isotope ratio.

Tension is escalating between Western powers and Iran after a UN nuclear watchdog report last month that said Tehran appeared to have worked on designing a nuclear weapon, and that secret research to that end may be continuing.

The United States and its European allies have seized on the unprecedented document by the UN International Atomic Energy Agency (IAEA) to crank up the sanctions pressure on Iran, one of the world's largest oil producers.

Enriched uranium can be used to fuel power plants and other types of reactors, which is Iran's stated aim, or provide material for atomic bombs if processed much further, which the West suspects is the country's ultimate intention.

Nuclear proliferation expert Shannon Kile noted that Iran earlier this year announced it would shift its most sensitive enrichment activity to Fordow but said that the actual start would still be significant.

"Obviously, for people who are concerned about Iran's ability to 'break out' and to enrich to weapons-grade this is a pretty good step along that route," said Kile, of the Stockholm International Peace Research Institute (SIPRI) think-tank.

Iran's decision last year to raise the level of some enrichment from the 3.5 percent purity needed for civilian power plant fuel to 20 percent worried Western states that feel this will bring Tehran much closer to the 90 percent suitable for an atomic bomb. Iran says the 20 percent material will solely replenish its fuel stock for a medical research reactor.

Iran's main enrichment plant is located near the central town of Natanz. But the Iranian leadership said in June that it would shift its higher-grade activity from Natanz to Fordow, a site that would offer better protection from any military attack and could sharply boost output capacity.

A commander of the elite Revolutionary Guards was quoted by the semi-official Mehr News Agency on Wednesday as saying that Iran will move its uranium enrichment plants to safer sites if necessary, without elaborating.

The United States and Israel, Iran's arch-adversaries, have not ruled out military action if diplomacy fails to resolve the long-running nuclear dispute, which has the potential to spark a wider conflict in the Middle East.

US: Iran has become more worrisome, needs diplomatic solution

A senior US official has said the situation over Iran's nuclear program is becoming increasingly worrying and an urgent diplomatic solution needs to be found.

The United States and Israel have not ruled out military action against Iran's nuclear facilities if diplomacy fails to resolve a dispute over a program they suspect is aimed at developing atomic weapons.

Iran denies it is seeking nuclear weapons and says it would respond to any strike by attacking Israel and U.S. interests in the Gulf.

"Iran is violating international obligations and norms. It is becoming a pariah state," Robert Einhorn, the State Department senior adviser for non-proliferation and arms control, told a news conference in the South Korean capital.

"The situation in Iran has become more and more worrisome. The timeline for its nuclear program is beginning to get shorter, so it is important we take these strong steps on an urgent basis.

"If we do not, pressures will grow for much stronger actions. The U.S. favours a diplomatic solution pressure, but if we cannot achieve a diplomatic solution soon, inevitably interests will grow in a different kind of solution. That is why we need to act soon."

Iran's nuclear ambitions, its claim to have shot down a U.S. spy drone in its airspace on Sunday and last week's storming of the British embassy in Tehran by protesters has contributed to a sharp increase in tensions in the region.

He said enforcing sanctions would force Iran to negotiate seriously.

Western nations last week significantly tightened sanctions against Iran, with the European Union expanding an Iranian blacklist and the Senate passing a measure that could severely disrupt Iran's oil income.

Einhorn said the latest round of sanctions do not include crude oil imports, crucial to energy-starved economies like South Korea.

"But we discourage countries from continuing to import crude oil in large quantities," added Einhorn, acknowledging that at the present time "pressure was tight" on the oil market.

"We are conscious of energy security needs of countries like the Republic of Korea and don't want to interfere with those needs," he said, of Asia's fourth largest economy.

Einhorn said he had received a positive response during talks with South Korean officials about tightening sanctions, adding Seoul was considering what additional measures to take.

Britain is pulling out diplomats from Iran

Britain is pulling out all its diplomats from Iran, a day after its embassy in the country was stormed by protesters who ransacked the compound, evoking outrage worldwide.

British Prime Minister David Cameron warned Iran of serious consequences over the "outrageous and indefensible" incident that has further escalated tensions between Iran and the West.

Agitated over Britain's announcement of additional economic sanctions on Iran in coordination with the US and Canada over its nuclear programme, protesters had yesterday attacked UK's embassy and another diplomatic compound, ransacking the properties and setting documents on fire.

BBC quoted its diplomatic sources as saying that the country is withdrawing all its diplomatic staff from Iran following the attack on its embassy.

In fact, it said a first group of embassy staff was already at the Tehran airport and due to fly to Dubai. The UN Security Council strongly condemned the attack and called on the Iranian authorities to ensure that diplomatic and consular property and personnel are protected.

Expressing "deep concern" at the assault by protesters who vandalised property at the embassy compound and tore down the Union Jack flag, the 15-nation Council called on the Iranian authorities to "respectfully their international obligations" to protect diplomatic personnel and property.

US President Barack Obama urged the Iranian government to hold to task those responsible for the attack while Germany summoned the Iranian ambassador in Berlin over the issue.

Iran yesterday regretted the incident, terming it "unacceptable" as police said those who took part would be prosecuted.