US President Donald Trump’s decision to quit Iran's multinational nuclear deal would not affect European small- and medium-sized enterprises' activities in the country's downstream sector, the head of Association of Iranian Petroleum Industries Equipment Manufacturers said on Saturday.
"While some major European companies have become cautious about doing business with Iran, smaller companies are continuing their cooperation with the country," Reza Khayyamian was also quoted as saying by Mehr News Agency.
A number of small companies have recently signed agreements, irrespective of the US pullout, he added.
Trump pulled the US out of the Iran nuclear deal earlier this month and pledged to ramp up pressure on the country. Some foreign firms have already started signaling their intent to withdraw from Iran.
Khayyamian said despite some potential difficulties in the upstream sector, the sanctions will not affect cooperation in manufacturing parts and equipment in the petroleum industries.
--- EU Support
In the wake of new US sanctions, some buyers of OPEC’s third-largest oil producer said they would seek US waivers to purchase Iranian crude.
The EU has begun reviving legislation that will allow European companies to continue doing business with Iran, despite US sanctions.
The "blocking statute" allows European Investment Bank to back EU investment in Iran, which can be particularly beneficial for the SMEs.
The aim is to have the measure in force before 6 August 2018, when the first batch of US sanctions take effect. It will prohibit European companies from complying with the penalties and permit compensation for affected firms.
In a direct challenge to a US ban on doing business with Iran's oil sector, the commission on May 18 proposed to let EU members make payments for oil directly to Iran's central bank to avoid US penalties.
The step is designed to enable European companies to avoid using the American dollar and financial system to purchase oil from Tehran, bypassing broad US sanctions that made it difficult for Iran to sell its oil when it was hit with sanctions in the past.
Iran's Oil Minister Bijan Namdar Zanganeh said on Saturday, “I have no doubt that these extraterritorial sanctions from US against Iran will have an impact on (foreign) investment in Iran… It will not stop us, but will reduce the rate of growth.”
Zanganeh noted that Iran's main customers are in Asia and the country also expects to save this level of exports to Europe and Africa.
European Commission President Jean-Claude Juncker said in a statement, "We have the duty, the commission and the European Union, to do what we can to protect our European businesses, especially SMEs."
In 2017, EU exports to Iran (goods and services) totaled €10.8 billion and imports from Iran to the bloc were worth €10.1 billion. The value of imports was nearly double the 2016 figure.
--- Boosting Domestic Players' Role
Khayyamian referred to the extensive expertise of domestic companies active in the energy sector and urged the need to protect them.
Besides technical support, the official added that a big part of Iran's efforts to cooperate with international companies in the key industry is to "attract investments and fulfill financial needs".
"The government should pave the way for domestic firms to have a stronger participation in the oil industry," he said.
Khayyamian noted that this can be achieved by resolving banking, insurance and tax issues, which can have positive impacts on job creation and economic growth.
