EU says encouraging trade with Iran is crucial to nuke deal

People buy fruits and vegetables in the Iranian capital Tehran. (AFP)
Updated 07 August 2018
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EU says encouraging trade with Iran is crucial to nuke deal

  • The United States reimposed stiff economic sanctions on Iran on Monday
  • A first set of reimposed US sanctions affect financial transactions that involve US dollars, Iran’s automotive sector, the purchase of commercial planes and metals including gold

WELLINGTON, New Zealand: The European Union foreign policy chief Federica Mogherini says the EU is encouraging enterprises to increase their business with Iran, as that country has been compliant with their nuclear-related commitments.
Mogherini told reporters Tuesday during her trip to Wellington, New Zealand, that it’s up to Europeans to decide who they want to trade with.
“We are doing our best to keep Iran in the deal, to keep Iran benefiting from the economic benefits that the agreement brings to the people of Iran because we believe this is in the security interests of not only our region, but also of the world. If there is one piece of international agreements on nuclear non-proliferation that is delivering, it has to be maintained,” Mogherini said.
The United States reimposed stiff economic sanctions on Iran on Monday, ratcheting up pressure on the Islamic Republic despite statements of deep dismay from European allies, three months after President Donald Trump pulled the US out of the international accord limiting Iran’s nuclear activities.
Trump declared the landmark 2015 agreement had been “horrible,” leaving the Iranian government flush with cash to fuel conflict in the Middle East.
Iran accused the US of reneging on the nuclear agreement, signed by the Obama administration, and of causing recent Iranian economic unrest.
European allies said they “deeply regret” the US action.
Trump said in a statement, “We urge all nations to take such steps to make clear that the Iranian regime faces a choice: either change its threatening, destabilizing behavior and reintegrate with the global economy, or continue down a path of economic isolation.”
A first set of reimposed US sanctions affect financial transactions that involve US dollars, Iran’s automotive sector, the purchase of commercial planes and metals including gold.
A second batch of US sanctions targeting Iran’s oil sector and central bank are to be reimposed in early November.
Trump warned that those who don’t wind down their economic ties to Iran “risk severe consequences.”
European ministers said the Iran deal was crucial for Europe’s and the world’s security, and the European Union issued a “blocking statute” Monday to protect European businesses from the impact of the sanctions.
Mogherini, speaking at a news conference alongside New Zealand Foreign Minister Winston Peters, said the EU and New Zealand saw the need to maintain the nuclear deal with Iran, notwithstanding the US withdrawal, and that she and Peters had discussed in detail how to keep open trade and financial channels with Iran.
“We are encouraging small and medium enterprises in particular to increase business with and in Iran as part of something (that) for us is a security priority,” Mogherini said, explaining that trade is an integral part of the nuclear deal.
Trade between Iran and the EU “is a fundamental aspect of the Iranian right to have an economic advantage in exchange for what they have done so far, which is being compliant with all their nuclear-related commitments,” Mogherini said.


Oil slips to around $63 as Iran concerns fade for now

Updated 33 min 4 sec ago
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Oil slips to around $63 as Iran concerns fade for now

  • US crude inventories expected to fall for 6th week
  • Goldman cuts 2019 oil demand forecast

LONDON: Oil slipped to around $63 a barrel on Tuesday as concerns faded for now that rising tensions in the Middle East would escalate and hit oil supplies, compounding the impact of a weaker demand outlook.
Iran’s capture of a British oil tanker last week sparked worries about supply disruptions in the Strait of Hormuz, through which about a fifth of the world’s oil flows, prompting crude to rally on Monday.
But oil prices have since pared some gains. Brent crude fell 31 cents to $62.95 a barrel by 1227 GMT on Tuesday. US West Texas Intermediate crude slipped 23 cents to $55.99.
“The response of oil prices to the seizure of a British oil tanker by armed Iranian forces near the Strait of Hormuz has been amazingly muted so far,” said Carsten Fritsch, analyst at Commerzbank.
“It appears that the majority of market participants are convinced that there will be no open conflict between the West and Iran,” he said.
The tensions come as the United States aims to cut off Iran’s oil exports and against the backdrop of supply cuts led by the Organization of the Petroleum Exporting Countries since the start of the year to prop up prices.
As part of US efforts, Washington has imposed sanctions on Chinese state-run energy company Zhuhai Zhenrong Co. Ltd. for allegedly violating restrictions imposed on Iran’s oil sector.
Despite lower Iranian exports and OPEC’s voluntary supply curbs, oil supply is exceeding demand due to strong growth in output from the United States and other non-OPEC producers, according to the International Energy Agency.
A weaker outlook for oil demand because of slowing economic growth has weighed on prices, which are still up by 18% in 2019 helped by the OPEC-led supply pact.
“Although prices had been driven by supply developments in the first half of the year economic considerations are making oil bulls careful this month,” said Tamas Varga of oil broker PVM.
Goldman Sachs lowered its 2019 oil demand projection on Sunday, joining other forecasters such as the IEA and OPEC in trimming its outlook for fuel use.
Oil may gain further support from expectations of another drop in US crude inventories in weekly reports due later on Tuesday and on Wednesday. Analysts expect a 3.4 million-barrel drop in crude stocks.
The American Petroleum Institute, an industry group, releases its inventory report at 2030 GMT.