Financial Times – By Daniel Dombey in Washington and David Blair in London – May 24 2011
The US and the European Union have stepped up their sanctions drive against Iran’s nuclear programme, with Washington imposing measures against PDVSA, Venezuela’s state-owned oil company.
The penalties against PDVSA, along with six other energy groups, are the first sanctions imposed under unilateral US legislation enacted last year aimed at third-country companies that supply Iran with refined oil or associated products. Despite its oil reserves, Iran has inadequate refining capacity, leaving the country dependent on imports for much of its petroleum.
The moves are part of an attempt to maintain pressure on Tehran, with some US officials admitting that the dispute over the country’s nuclear programme has been pushed out of the international spotlight by the Arab uprisings.
The International Atomic Energy Agency, the UN’s nuclear watchdog, said on Tuesday Iran had accumulated more than 4,000kg of low enriched uranium – more than enough, if further processed, for three nuclear bombs.
While Iran insists its programme is purely peaceful, the IAEA said in a leaked report that Tehran had failed since August 2008 to address questions about possible military aspects to the programme.
Despite a gradual widening of the scope of sanctions from the financial sector to the economy as a whole, expectations of a breakthrough in negotiations between Iran and the world’s big powers are low. Diplomats add that there is little short-term prospect of new UN sanctions, because of Russian and Chinese misgivings.
But the EU imposed sanctions this week against Europäische-Iranische Handelsbank, a bank Washington identifies as the country’s “financial lifeline to Europe”, and a large number of Iranian shipping companies, in measures that targeted more than 100 entities. The US also announced separate measures against companies from China, Belarus, Iran, North Korea and Venezuela for more direct violations of non-proliferation rules.
James Steinberg, US deputy secretary of state, said the new energy sanctions varied in severity, with some seeking to shut down target groups and others intended to dissuade them from doing more business with Iran. The measures against PDVSA were among the lightest, banning the parent company – but not subsidiaries – from US government contracts, Export-Import Bank financing and US export licences. They do not prohibit its export of crude oil to the US.
One big question facing US policymakers is whether to take a tougher stance on Chinese energy groups doing business with Iran.
The energy companies hit with the toughest sanctions on Tuesday were the Jersey-based Petrochemical Commercial Company International, the UAE-based Royal Oyster Group (UAE); and the UAE/Iranian Sepahan Oil Company.
The US has taken softer steps against other companies – including one Israel based group, Ofer Brothers – which it said failed to exercise due diligence in helping provide Iran with an $8.65m tanker last year.
The company denied having sold any ships to Iran.
