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Iran presses Europe again to bypass US sanctions on oil sales via payment channel

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Iran presses Europe again to bypass US sanctions on oil sales via payment channel

  • Author
  • Aresu Eqbali
  • Editor
  • James Leech
  • Commodity
  • Oil
  • Topic
  • US Sanctions on Iran

Tehran — European signatories of the Iran nuclear deal should step up their efforts to allow Tehran's crude to be sold without being subject to US sanctions, top Iranian officials said.

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"Iran has so far committed to its obligations within the JCPOA," deputy foreign minister Abbas Araghchi said Sunday, referring to the nuclear deal, according to state news agency IRNA. "We welcome the Europeans' political positions. But mere political support will not help to continue the JCPOA...If it matters to the Europeans, they should pay the price to preserve it, too."

Deputy oil minister Amirhossein Zamaninia, in comments reported by the oil ministry's news service Shana on Monday, used similar language: "European parties of the JCPOA should now pay the necessary price to materialize their promises and statements. The US sanctions against Iran's oil industry will harm the global oil markets stability too, and make life harder for the Iranian people."

The US, which withdrew from the JCPOA -- or the Joint Comprehensive Plan of Action on Iran's nuclear program -- in November, has said it will not renew sanctions waivers granted to eight countries to continue purchasing Iranian oil when they expire this week. Many analysts say the move will shut in at least half of the 1.2 million-1.3 million b/d of crude that Iran has been exporting in recent months.

European governments have said they remain committed to the nuclear deal, with the UK, France and Germany setting up a payment channel that would allow companies to continue trading with Iran.

However, the channel -- called the Instrument in Support of Trade Exchanges -- has yet to be used, and Iranian officials have been frustrated by its slow implementation.

"The Islamic Republic's patience and tolerance is not unlimited," Araghchi said. "We have given enough time and chance for compensation of the consequences of the US withdrawal from the JCPOA. It is now time to act."

The EU also has a so-called "blocking statute" designed to nullify US legal action against European firms. The statute enables EU companies to seek damages related to US sanctions and prevents any foreign court rulings based on them from having effect in the EU.

But EU sources have said the blocking statute cannot fully protect EU companies dealing with Iran from the impact of US sanctions, only mitigate them. Indeed, most European refiners have wound down their purchases of Iranian crude due to legal risks.

EU officials did not respond to a request for comment.

Prior to the reimposition of US sanctions on Iran, Europe had been a key outlet, taking about 700,000 b/d -- or more than a quarter -- of Iran's crude exports. A number of European companies have also signed agreements to help Iran develop its oil and gas sector.

Araghchi said Iran could abandon the JCPOA if European countries do not take action. The JCPOA, which went into force in January 2016, relaxed sanctions targeting Iran's oil sales, in exchange for concessions on Iran's nuclear program.

-- Aresu Eqbali,

-- Edited by James Leech,