There seems to have been no response from Iran to the 2 week deadline set by the US and Europe on the nuclear issue. Over the weekend, Iran's President, Mahmoud Ahmadinejad said 'the Iranian nation would not retreat one iota from its rights.' Earlier, Israel's deputy Prime Minister, Shaul Mofaz, had also taken a hard line, claiming that Iran was simply pursuing a strategy of 'buying time', and adding that Israel believed 'Iran will reach enrichment capability' by 2009.
Although such statements may be a cover for more substantive discussions in private, the rhetoric is not encouraging. Mofaz added, for example, 'it's a race against time and time is winning'. Early last month, when oil prices were at $150/bbl, I suggested that they could easily slip to $100/bbl if diplomacy worked. Equally, I worried that they could rise to $200/bbl if military action took place, and Iran blocked oil exports through the Strait of Hormuz. Hedging against both possible outcomes still seems a prudent strategy for chemical companies to adopt.