More Potential Buyers for Iran Oil

“Regardless of US pressure, the number of potential buyers of Iran’s oil has increased due to the competitive nature of the market and growing cupidity for more profitability,” he said, Shana reported.

US President Donald Trump pulled out of Iran’s historic nuclear deal with six world powers last May. The agreement, formally known as the Joint Comprehensive Plan of Action (JCPOA), was signed between Iran and the world powers in July 2015 after nearly 12 years of intensive talks. International analysts described the JCPOA as one of the best agreements over recent years.

Except for Saudi Arabia and Israel, each and every other country in the world condemned Trump’s exit from JCPOA.

After the withdrawal, the US re-imposed sanctions that had been previously lifted under the JCPOA. The sanctions targeting Iran’s petroleum sector were re-enforced in August.

Iran’s crude oil exports hit a record 2.617 mb/d in April, just before Trump ordered withdrawal from the JCPOA.

Zamani-Nia said the Iranian oil ministry had mobilized all its forces to blunt the impact of US sanctions on the country’s oil sector.

“Selling oil is currently the top priority of the Ministry of Petroleum so that Iran’s oil market share, which was regained after the JCPOA, would not be lost but be safeguarded,” he added.

He said the objective was to maximize oil sales in order to serve the country.

“Under four decades of embargo (since the 1979 Islamic Revolution), the National Iranian Oil Company has managed to work out creative mechanisms for selling oil, but the US financial pressure and clout is such that China, India, South Korea and all other countries which the US granted waivers to buy oil from Iran, would not even buy an additional one barrel of oil from Iran,” he added.

Zamani-Nia drew a parallel between US unilateral sanctions on Iran and growing corruption, trafficking and money laundering in the international oil market.

The JCPOA went into effect in January 2016, but the P5+1 group had from the very beginning dragged its feet on facilitating Iran’s trade with the world. P5+1 includes the US, France, Britain, China and Russia (the five permanent members of UN Security Council) plus Germany.

Trump Sinking US Policy

French President Emmanuel Macron, British Prime Minister Theresa May and German Chancellor Angela Merkel joined the Russian and Chinese leaders and the European Union foreign policy chief Federica Mogherini to condemn Trump’s withdrawal and express their firm support for the JCPOA.

The firm position adopted by the P4+1, the EU and the world was expected to alleviate pressure on Iran, but it did not happen in practice.

“Politicians from across the globe, except for Saudi Arabia and Zionist Regime, condemned the return of sanctions and reaffirmed Iran’s political behavior. They have also expressed concerns over President Trump’s non-diplomatic policy. However, it must be noted that international firms run by the private sector do not follow their politicians,” explained Zamani-Nia.

He said it was normal for foreign companies to work for maximum profitability.

Referring to the Special Purpose Vehicle (SPV), designed by the EU to facilitate trade with Iran, he said, “This executive mechanism will be triggered and will be helpful, but it will not resolve the problem entirely.”

“In fact, every action the Europeans intend to do will be faced with the US influence,” said Zamani-Nia.

“Europe’s frustration in tackling the US unilateral sanctions on Iran has resulted in profound awareness within Europe and raised expectations for Europe to not remain the US’s political and economic hostage,” he added.

“Such awareness will change the quality of Europe-US relations and the US politico-economic clout within Europe and everywhere else in the world will gradually decline,” he said.

Analysts are split on the SPV effectiveness. Some dismiss it as a symbolic gesture which would have no effect, but some others say it would be a beginning for Europe to end its dependence on the US financial system.

In the wake of the US withdrawal from the JCPOA and President Trump’s threat to penalize companies doing business with Iran, many companies put their negotiations or business on hold.

However, Iran kept making efforts. Iran’s Petroleum Ministry follows up on oil and gas talks. One of these projects is Iran’s gas exports to Pakistan, which have been delayed for years due to the US sanctions.

Zamani-Nia said the new Pakistani government has expressed its political will to broaden its economic ties with Iran and is following up on the gas project.

“To that end, Pakistan has established two (financing and sanctions) committees to facilitate the process of Iran’s gas exports to Pakistan. The findings of the committee’s ongoing studies are expected to end in a meeting between Iranian and Pakistani petroleum ministers in coming months to lead to the materialization of the agreement,” he added.

Zamani-Nia said it was more profitable for Pakistan to receive gas from Iran than from any other nation.

“The legal aspects of this agreement will be definitely discussed if the petroleum ministers of the two nations meet,” he said.

In 1990, a “peace” gas pipeline was planned to be built connecting Iran to Pakistan and India. It was expected to promote peace and friendship in the Indian subcontinent. Under the initial agreement signed between the three countries, a 2,700-km pipeline was planned to carry gas from Iran to India, while cutting through Pakistan’s territory. Under the initial deal, 1,100 kilometers would be laid out in Iran, 1,000 kilometers in Pakistan and 600 kilometers in India.  The IPI pipeline would pump 150 mcm/d of gas to Pakistan and India – 90 mcm/d to India and 60 mcm/d to Pakistan. The project was alas killed.

Then, Iran and Pakistan were to build a pipeline between themselves. Under the pretext of sanctions and foreign pressure, Pakistan has so far failed to meet its commitments for completing its own section of the pipeline. 

A deadline given to Pakistan to complete its own section of the pipeline expired in 2014. Iran has however built its own section of the pipeline stretching from the giant offshore South Pars gas field to the Pakistani border.

Islamabad claims it is making its best to complete its own section of the pipeline, 700 km long, to be able to receive Iran’s natural gas to meet its energy shortages.