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US sanctions: what trade restrictions on Iran mean for the oil and gas industry

August 08/2018

MOSCOW (MRC) -- The US today re-imposes economic sanctions on Iran, with a second wave of sanctions targeting the Islamic Republic's energy sector due in November, as per Compelo.

In May, President Donald Trump ended US participation in the Obama-era nuclear agreement with Iran.

Under the 2015 Nuclear Deal Joint Comprehensive Plan of Action (JCPOA) with the P5+1 group of world powers the US, UK, France, China, Russia and Germany Iran agreed to limit its nuclear activities and allow in international inspectors in return for the lifting of economic sanctions.

President Trump described the JCPOA has a horrible, one-sided deal and pledged to re-impose tough sanctions on Tehran after a wind-down period of 90 days. That has now expired.

As of today, 7 August, Iran is, among other things, prohibited from using US currency, trading in metals and minerals including gold, steel, coal and aluminium, and conducting transactions related to the Iranian currency the rial, the value of which has already declined 50% against the US dollar in 2018 amidst civil unrest.

President Trump wants to Iran to curtail its nuclear enrichment and weapons programmes, and end its support of unfavourable governments or uprisings in the Middle East.

Adopting a typically hardline stance, he has warned of severe consequences for any countries or companies that defy the sanctions and continue to do business with Iran.

The remaining unilateral sanctions will be re-imposed by the US on 5 November and will target Irans energy sector, including barring imports of the oil and gas from the country, and sanctions on its energy, shipping and shipbuilding sectors.

French oil and gas multinational Total has already threatened to pull out of its $4.8bn deal with Petropars, a subsidiary of the National Oil Company of Iran (NOIC), to exploit the vast South Pars natural gas field in the Persian Gulf unless it is granted a waiver from the US sanctions.
Author:Anna Larionova
Tags:petrochemistry, Crude oil, Iran, USA.
Category:General News
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