Egypt Will Allow Iran to Send Two Naval Ships Through Suez

Egypt yesterday approved a request by Iran to send two warships through the Suez Canal on their way to Syria, a move that has ratcheted up Middle East tensions and driven oil prices higher.

The decision was reported by Egypt’s state television network and confirmed by an Egyptian military official who would not be identified in line with policy. Iran’s request to use the waterway specified that the vessels don’t hold nuclear or chemical materials, and aren’t carrying or delivering weapons, the official said.

The ships will go to Syria, where they will anchor “for a few days” after a trip through the canal that is “routine according to international law,” Iran’s state-run Islamic Republic News Agency said, citing the country’s ambassador to Syria, Ahmad Mousavi.

Suez Canal officials didn’t have details on the ships’ arrival date. Crude oil rose to the highest level in a week in New York as anti-government demonstrations continued in Yemen, Bahrain and Libya, heightening concerns that instability in the Arab world will affect energy supplies.

Crude for March delivery settled at $86.20 a barrel on the New York Mercantile Exchange. Earlier, it touched $87.88. Futures gained 0.7 percent this week. The more active April contract increased 87 cents to $89.71 a barrel.

‘Responsible Behavior’

U.S. financial markets will be closed Feb. 21 for the Presidents' Day holiday.

The U.S. is “monitoring” Iran’s plan to send warships through the Suez Canal, White House press secretary Jay Carney said yesterday. Iran doesn’t show “responsible behavior in the region, which is always a concern to us,” Carney told reporters traveling on Air Force One to an appearance by President Barack Obama outside Portland, Oregon.

The 120-mile (190-kilometer) Suez Canal carries about 2.5 percent of world oil output, according to Goldman Sachs Group Inc., and is a key route for ships carrying Asian consumer goods to Europe.

The ships are a British-built, 1960s-era Mk-5 frigate and a supply vessel, according to Israel’s Yedioth Ahronot newspaper.

The passage of the Iranian vessels would be a “provocation” to Israel, Israeli Foreign Minister Avigdor Lieberman said this week. He said Israel would not “ignore forever” such acts.

Iranian Dissent

After the Egyptian approval for the ships’ passage, Israeli Foreign Ministry spokesman Yigal Palmor said by telephone that he had nothing to add to what Lieberman had said on the issue.

Iran hasn’t sent warships through the canal in “many years,” Lieberman said.

Iran has accused the U.S. and Israel of stoking domestic dissent, which has revived in the past week under the influence of Arab revolts, and rejects international sanctions against its nuclear program.

Officials in Iran have said discussions of Israel’s nuclear development should be part of any talks on its own atomic work. Israel hasn’t confirmed or denied possession of nuclear weapons.

Israel and the U.S. suspect that Iran’s nuclear program is aimed at producing weapons. Iran says it is for generating power. The United Nations has imposed four rounds of sanctions on Iran over its nuclear development.

The Islamic nation deployed security forces to put down a Feb. 14 rally by opposition groups that was the biggest since the re-election of President Mahmoud Ahmadinejad in June 2009 prompted mass rallies claiming the vote was fixed.

Opposition leader Mir Hossein Mousavi could not be reached and may have been detained, the New York Times reported yesterday, citing comments the leader’s daughters made to an opposition Web site.

The daughters said that both parents have been unable to be reached since Feb. 15 and that their home has been surrounded by security forces, according to the report.

Demonstrations Planned

Nationwide demonstrations are planned for Feb. 20 to mourn those killed in this week’s protests, according to the Web site of Mousavi, who ran against Ahmadinejad in 2009 and led protests after the vote.

Opposition groups liken Iran’s regime to those of ousted Arab autocrats such as Egypt’s Hosni Mubarak. Iranian state-run Press TV said two people were killed in this week’s unrest.

Mousavi, the Iranian diplomat, accused the Israelis of “perverting the truth,” calling passage through the Suez “routine” and part of Iran’s strategic relationship with Syria.

“The Israeli side is interpreting international law according to its own interests and is perverting the truth,” IRNA quoted him as saying.

According to international law, Egypt cannot forbid any vessel from passing through the canal unless that country is at war with Egypt, Ahmed El-Manakhly, transit director at the Suez Canal Authority, told Bloomberg Television Feb. 16.

To contact the reporters on this story: Mariam Fam in Cairo at mfam1@bloomberg.net; Benjamin Harvey in Ankara at bharvey11@bloomberg.net.

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net.