The European Union states have the political will to implement special mechanisms to avoid imposing the United States’ prospective sanctions against Iran after it pulled out of the nuclear deal that the world powers and Iran had concluded in July 2015, the Oil Ministry’s deputy for international affairs said.
“The EU members want to continue their trade relationships with Iran based on the Joint Comprehensive Plan of Action,” Amirhossein Zamaninia was also quoted as saying by Shana, the Oil Ministry’s official news agency, on Tuesday.
“These relations have relatively become normalized following the implementation of JCPOA and only some banking problems remain,” Zamaninia added.
US President Donald Trump decided on May 8 to abandon JCPOA and reinstate sanctions that were in force before the international accord’s implementation more than two years ago.
The official noted that the 28 members of EU have voiced their political will and call for the prevention of imposing the US’s transboundary sanctions on European companies for trading with Iran.
Zamaninia stressed that Iran’s current priority is to sell crude and receive its money without any barriers, adding that to realize the goal, it needs to alleviate problems related to shipping, tankers and insurance.
After the sanctions were lifted in January 2016, some medium-sized European banks put cooperation with Iran on their agenda.
EU proposes a mechanism whereby the direct cooperation of some European central banks with the Central Bank of Iran will help pay for the purchase of oil, condensates, commodities and petrochemical products from Iran.
Underlining that the European firms that have close economic relations with the US prefer to keep their ties with the country, Zamaninia noted that medium-sized European companies, which have less relations with America, will enjoy the EU’s political support to continue their economic relations with Iran.
According to the official, ways of implementing such mechanisms are being discussed with Europe, at which the National Iranian Oil Company accompanies the Ministry of Foreign Affairs to help solve problems related to oil and petrochemical sales and tankers.
S. Korea, Japan More Vulnerable
"It is very unlikely that India and China decrease their crude import from Iran," Gary Clyde Hufbauer, former deputy assistant secretary for international trade and investment policy of the US Treasury, said, noting that South Korea and Japan are much more vulnerable to US sanctions and they will finally cut their imports.
"Even if sanctions are reimposed, oil prices will not be profoundly affected, yet some states will have to pay more for the fuel and others less," he added.
The energy expert believes that as soon as sanctions take effect, powerful economies, namely China and Russia, will reinforce relations with Iran to minimize the adverse effects of sanctions.
Asked about easing the sanctions regime, he said, "There are two scenarios for Iran, one of which is to abide by US policies and the other alternative is to follow Moscow and Beijing's guidelines as well as total dependence on their economy."
Clyde Hufbauer noted that if Iran wants to count on Europe's support, it should not seek to scrap the nuclear deal.
"Despite Europe's anger at the US, it will have no choice but to adapt itself to the US policies, as the European Union has made long-term commitments to the US," he said.
According to Clyde Hufbauer, Iran's economic malaise is rooted in domestic issues, yet reimposition of sanctions will weaken the country's economic power by 5%.
