Companies scurry for clarity on Iran amid US threats

EghtesadOnline: International businesses and state agencies are seeking clarifications in the face of the US sending mixed signals about business with Iran.

News ID: ۷۷۹۹۴۲

23 October 2017

Tehran, which faces already reluctant international companies for trade, is on Washington’s radars again for fresh restrictive measures despite vociferous opposition from Europe and other countries, according to PressTV.

On Friday, media reports said the US House of Representatives will vote next week on a bill sought by President Donald Trump, which could allow sanctions against Iran to automatically kick in.

The draft bill could derail a 2015 nuclear agreement with Iran by holding the country to a series of requirements not previously agreed to when the deal was forged by the US and other countries two years ago, the Associated Press reported.

The legislation, the news agency said, aims to meet Trump’s demands that Congress act quickly to toughen the existing law that governs US participation in the Iran nuclear deal.

Iran and other parties to the nuclear agreement have made it clear that they would not conform to any unilateral US measures and that the new coercive steps would not have a bearing on their nascent trade relationship.

However, the belligerent US posture is already generating a swirl of apprehension.

On Friday, French businesses and foreign and finance ministry officials were said to be meeting next week to discuss the consequences of Trump’s refusal to certify the Iran nuclear deal.

Trump did not pull the US out of the agreement, but gave the US Congress 60 days to decide whether to re-impose the economic sanctions that were lifted on Iran under the pact in January 2016.

Which side will Europe bear with?

The Medef business group will gather officials from the foreign ministry, finance ministry and France’s business office in Tehran on Tuesday to offer an “analysis of the consequences of the non-certification” of the accord by Trump, reports said.

“We’re still assessing how firms are reacting to the Trump decision, but we are trying to not be overly alarmist with them,” Reuters quoted an unnamed French diplomatic source as saying.

Medef led a large delegation of business people and industry groups on a mission to Iran to explore business opportunities in the country after the deal was agreed.

France’s energy group Total and its automakers Peugeot and Renault were among the first multinational groups to clinch deals with Iran after the sanctions were lifted.

Total CEO Patrick Pouyanne, whose company plans a $5 billion development of phase 11 of Iran’s South Pars, said Wednesday it was waiting for the US Congress’s decision and that it would withdraw from Iran if obliged by law.

Washington's mixed signals

On Friday, US Secretary of State Rex Tillerson said Washington did not intend to disrupt European business deals with Iran and that he would address European allies' business concerns.

"The president's been pretty clear that it's not his intent to interfere with business deals that the Europeans may have under way with Iran," he said in an interview with The Wall Street Journal.

Indian media, meanwhile, quoted what they called a top US official as saying that New Delhi should make its own decisions on the relationship with Iran based on its interests.

The Press Trust of India said it asked the senior Trump administration official about India developing the strategically-located Chabahar port in Iran, which will give New Delhi access to Afghanistan and Central Asia.

"India should make its own decisions based on how it sees its interests," the official told PTI, while stating that the countries should take a hard look at their business partners in Iran at the same time.

Business as normal for now

Among the Europeans, the bellicose rhetoric by Trump and some other American politicians did not prevent Norway’s Saga Energy to conclude  Tuesday a $2.9 billion deal to build solar power plants in Iran.

Britain's Quercus and Dutch energy firm Global Renewables Investments (GRI) also said they would not change their strategy on Iran and would continue with their investments in the country, Reuters reported.

Quercus plans to build the world’s sixth-largest solar farm in central Iran with an investment of over half a billion euros. GRI is about to build up solar and wind farms that could produce up to 1,700 megawatts of electricity.

While others are taking a “wait-and-see” approach, Iranian officials say the country is prepared for any eventuality after years of experience under sanctions.

Previous sanctions have "made Iran stronger," director of international affairs at the National Iranian Oil Company (NIOC) Saeid Khoshrou was quoted as saying.

Iran's Deputy Petroleum Minister Amir Hossein Zamaninia said he sees "little or no implications on our future plans in the oil industry" from new US measures.

On the shipping side, market sources said they do not expect much change, given that Iran ships out much of its oil on its own tankers, Platts reported.

Shipowners and traders said unless the United Nations follows suit, business will probably carry on as normal.

"Anything to do with Iran is never linked with the US anyway, not even paid in US dollars," Platts quoted one shipbuilder as saying.

Moreover, tankers would not have problems for protection and indemnity liability if the reimposition of sanctions were not backed by the EU because most shipping cover is tied to European insurers, it said.