Iran’s deputy minister of petroleum for international affairs
and commerce, Amir-Hossein Zamani-Nia, has said the number of potential buyers
of Iran’s oil has increased despite US threats of sanctions. Zamani-Nia, however, said the countries that
recently received sanctions waiver from the US would not buy even an extra one
barrel of oil from Iran. “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.
Zamani-Nia did not deny the adverse impact of US sanctions
on Iran’s petroleum industry and on the livelihood of Iranians, either.
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 Ministry of Petroleum 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], 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 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.
The EU is continuing to endorse implementation of the JCPOA,
providing Iran with support to fulfill its nuclear-related obligations. The EU
is also committed to ensuring that EU-Iran trade and economic relations
continue to benefit from the positive impact of lifting the sanctions. The EU
has already introduced measures to alleviate the effects of US sanctions on
European firms, and has announced the creation of a new mechanism, SPV, to
facilitate financial transactions with Iran.
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.
Pakistan Determined to Get Iran Gas
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.
Lost Opportunity
Iran failed to make maximum gain from the JCPOA due to
domestic criticism of the new model of oil contract – the Iran Petroleum
Contract (IPC) – which the Petroleum Ministry developed to lure back foreign
investors.
History will never forget delays in the endorsement of the
IPC by relevant bodies in the country to allow for the signature of oil
contracts before Trump’s withdrawal.
Zamani-Nia agrees with analysts who believe that Iran lost
big opportunities created post-JCPOA.
“Iran had 17 months starting from the implementation of
JCPOA to the US’s exit to benefit from this opportunity and the international
community’s support, but in practice it didn’t happen and the JCPOA opportunity
to some extent was lost,” he said.
Citing the example of Phase 11 of South Pars development, he
said: “Had the agreement with [France’s] Total been signed two years earlier
and this company had invested $1 billion in Iran, I assure you that it would
not have left Iran so easily.” “Even if Total left Iran, it would bring the
project to stage which Iranian engineers could continue up to the end,” he
said. “Had Iran concluded several international agreements instead of a single
one, Mr. Trump would have been more cautious in re-imposing the sanctions,”
said Zamani-Nia.
He said he was not seeking any “blame game” in the oil
sector, adding: “Nobody predicted that someone like Mr. Trump would be elected
US president to target the JCPOA due to his enmity with [his predecessor] Mr.
[Barack] Obama.” “That is alas politics and everything is not predictable,” he
said.
Courtesy of Iran Petroleum