Source: The Wall Street Journal
LONDON—Malaysia's state oil company said it stopped shipping gasoline to Iran last month, adding to a growing list of firms that have taken action as Western pressure builds for fresh sanctions against the Islamic state over its nuclear program.
The decision by Petroliam Nasional Bhd., known as Petronas, is a bit of coup for the U.S., France and other nations hoping to hit Iran with new sanctions, as Malaysia and Iran have boosted trade and economic ties in recent years.
The announcement of Petronas's move—which took effect last month— comes a day after Daimler AG said it will sell a minority stake in an Iranian engine maker. The luxury-car maker, following in the footsteps of other German companies, said it also planned to halt the export of cars and trucks to Iran.
Iran's repeated violations of the Nuclear Non-Proliferation Treaty, to which the country is a signatory, have spawned concern in many Western and Arab Middle East states that Iran is pursuing not just nuclear power to meet rising power demand, but also a nuclear bomb. Iran says it has no plans to build a nuclear bomb.
Members of both houses of the U.S. Congress are clamoring for tougher measures against Iran, including banning non-U.S. companies from shipping fuel products to the country. Fearing those measures will soon come to fruition, oil companies like Royal Dutch Shell PLC and trading firms such as Glencore International AG of Switzerland have stopped shipping gasoline and diesel to Iran to avoid getting caught in Washington's legal cross hairs.
Despite having the world's third-largest proven oil reserves, Iran imports around 140,000-200,000 barrels a day of gasoline and other oil-derived fuel products because of insufficient refining capacity. A Petronas official said the company halted shipments to Iran in mid-March and had been supplying the country with roughly 15,000-20,000 barrels a day of fuel products in recent months.
Meanwhile, the United Nations Security Council in recent days beganis debating a package of measures against Iran for its violations of the Nuclear Non-Proliferation Treaty. Analysts say any U.N. sanctions that come to pass will likely be watered down as China, among others, isn't eager to enact stiff actions against Tehran.
But it is unclear how much bite any new sanctions may have. Iran sits in a rich and growing fuel-product market, particularly in the United Arab Emirates, from which it can buy gasoline through various parties, even if at a higher price on the spot market. Companies can also take steps to hide the true origin and owner of fuel products—something that isn't uncommon even today, energy analysts say—by operating through third and fourth parties that are less susceptible to U.S. pressure. That gives primary firms plausible deniability of knowingly flouting U.S. law.
There are also parties still willing to sell Iran gasoline. The Reuters news agency reported this week, citing oil industry sources, that China's state-run Chinaoil in recent days sold Iran 600,000 barrels' worth of gasoline for $55 million.
Iran has been stockpiling gasoline and diesel for many months in anticipation that new sanctions could target its fuel imports, according to Iranian oil officials. The country's state shipping company has also been changing the names and ownership of most of its vessels to evade existing U.S. sanctions.
Officials at the shipping company, Islamic Republic of Iran Shipping Lines, didn't respond to requests for comment.