washingtonpost.com
E.U. rules let Iran import, export oil, gas

By Thomas Erdbrink and Glenn Kessler
Washington Post Foreign Service
Thursday, October 28, 2010; A8

TEHRAN - The United States and Europe have worked cooperatively on Iran policy since President Obama took office, but a small crack might have begun to open over sanctions that are beginning to pinch ordinary Iranians.

The European Union issued regulations this week that went well beyond a U.N. Security Council resolution passed in June, outlining tough restrictions on the sale of equipment and technology to the Iranian oil and gas industry, as well as on investment in those sectors. But the regulations - unlike legislation passed by the U.S. Congress - allow for the import and export of oil and gas to the Islamic republic.

"If you want to send a tanker filled with refined petrol to Iran, and you have proved that you are not carrying any other goods that we deem illegal, Europe has no problem," said a European official who specializes in sanction policies and spoke on the condition of anonymity because of the sensitivity of the subject. "We don't want any negative effect on the Iranian population or to deprive them of energy, so we do not follow U.S. measures that go beyond United Nations sanctions."

The E.U. will also permit financial transactions needed to import of oil and gas to Iran. The United States, by contrast, penalizes companies if they sell gasoline to Iran, and has increased pressure on international oil companies and refineries to cancel their contracts with the country.

The practical effect of the European action might be minimal because European oil giants might still refuse to supply Iran with fuel for fear of appearing to thwart U.S. sanctions.

U.S. officials said Wednesday that they were broadly pleased with the European regulations, which they said could devastate Iran's oil and gas industry. "We are going at the supply, while they are going at the back end," said a senior administration official who handles the Iran portfolio. "We have had the kind of cooperation and coordination with the Europeans that has been unprecedented."

The U.S. official said he had never heard any concerns raised by his European interlocutors about the effect of the sanctions on ordinary Iranians. "The regulations turned out to be pretty solid," he said. "At each stage, when they have faced a choice between going soft or going heavy, they have gone heavy."

U.S. officials have in the past said that if the increased pressure is hurting ordinary Iranians, they should blame their leaders for the Islamic republic's increasing isolation.

But E.U. officials said Wednesday that they specifically allowed fuel sales to ease the burden on average Iranians.

According to June statistics, Iran needs to import 4.7 million gallons of refined petroleum each day because of the country's low refining capacity. After U.S. sanctions were implemented in July, Iranian leaders announced that they had started an emergency plan to increase local production by mixing oil with high-octane products.

At several European airports, planes belonging to Iran's national carrier, Iran Air, are being refused refueling services by representatives of major oil companies. According to the European Union, there is no legal basis for denying the airline services.

Iran Air has been able to refuel at only three European airports since a Sept. 30 agreement among the State Department and European oil firms Total of France, Statoil of Norway, Eni of Italy and Royal Dutch Shell of Britain and the Netherlands.

They pledged to end their investments in Iran and avoid new activity in the country's energy sector. In turn, U.S. officials said, the companies would be protected from possible U.S. penalties for doing business with Iran.

"We have complained to the U.S. about the extraterritorial effects of their measures on European companies," the European official said. "If those companies submit to U.S. wishes, it is their decision, but we are against these policies. This is a major issue for us."

There have been complaints in the European parliament over U.S. pressure on E.U. companies regarding Iran.

"If Europe accepts U.S. interference through pressure on its businesses, it is giving up independence," said Marietje Schaake, an influential parliament member who represents a liberal party. "The influence of U.S. interference beyond our own sanctions harms the E.U.'s credibility as a global player.

Kessler reported from Washington.

Post a Comment


Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.

© 2010 The Washington Post Company