Baku, Azerbaijan, Oct.15
By Leman Zeynalova – Trend:
US sanctions will definitely hurt Iran and the country’s oil production and exports will go on being reduced in October and November, Francis Perrin, Senior Fellow at the OCP Policy Center (Rabat) and Senior Research Fellow at the French Institute for International and Strategic Affairs (IRIS, Paris), told Trend.
As clearly stated by Mike Pompeo, US State Secretary, Washington wants to reduce to zero Iranian oil exports from the beginning of November and to prevent any company from investing in the oil and gas sector in Iran, said Perrin.
“These very ambitious goals will not be reached but the intent is very straightforward: to apply maximum economic pressure on Iran in order to push the Iranian authorities to change their behavior on several key issues,” he added.
The expert believes that one of the key factors which will be taken into account by Washington when granting sanction waivers is the willingness of the countries and companies concerned to reduce very significantly their relationship with Iran.
“Several years ago a previous administration granted waivers to Japan and South Korea. These countries were allowed to go on importing Iranian crude oil but at a much lower level than before. This type of waivers could be granted especially if some countries/companies can explain that it is very difficult for them to find alternatives to Iranian crudes either because there is not enough oil on the global market or because there is not enough oil with the characteristics required by their refineries,” he said.
Perrin pointed out that a key issue for Iran is its ability to export oil as it represents 70-80 percent of its export revenues (Iran is also a gas giant but it does not export a lot of natural gas).
“Russia will not buy Iranian crude as it is a big exporting country; and Europe, Japan and South Korea will greatly reduce their oil imports from Iran. In this context the three key countries will be China and India and, to a lesser extent, Turkey,” he said.
The expert believes it is very likely that India will import less Iranian crude. “The case of China is more complex. This country is presently the largest buyer of Iranian oil and it strongly opposes US sanctions on Iran. But, at the end of the day, Beijing could make some concessions to Washington under certain conditions.”
He noted that several companies have already withdrawn from the country, including Total which had signed a contract for a big gas development project in July 2017 (about $4 billion of investment were to be spent by the consortium led until recently by the French company).
“And I do not think that many companies will sign contracts with Iran and invest in Iran in the coming future despite its huge oil and gas potential,” concluded the expert.
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