Thursday, 7 June 2018

The Europeans do what they do best - give in to American bullying

"We Cannot Defy The US": European Refiners Fold To Trump, Will Stop Buying Iran Crude

For all of Europe's bluster, and increasingly vocal "resistance" to Trump unique approach to international politics, especially when it comes to Iran when Brussels swore it would defy the US president and continue business as usual with Tehran, it took Europe about a month to fold, and as Reuters reports European refiners are now unofficially winding down oil purchases from Iran, closing the door on a fifth of the OPEC member’s crude exports.

And since the only true leverage that Iran had vis-a-vis Europe was its deeply discounted crude oil, the shuttering of crude purchases from the Islamic republic will suddenly make European governments especially ambivalent whether to continue fighting Trump in hopes of salvaging the Iranian nuclear, when there is only downside left.

How did Trump win? By the implicit threat to sanctioning and  cutting off Europe's financial institutions, and although European governments have not - yet  - followed Washington by creating new sanctions, banks, insurers and shippers are gradually severing ties with Iran under pressure from the U.S. restrictions, making trade with Tehran complicated and risky, and if anything, all cash (or bitcoin).

Immediately after Trump announced on May 4 announced that the US is quitting the landmark 2015 nuclear deal between Iran and world powers and reimposed sanctions on Tehran, effectively making Iranian exports "radioactive" on the global scene, ministers from Germany, France and Britain protested vocally and repeatedly, urging U.S. officials to shield European companies from the sanctions, but the refiners have decided to not take any chances.

We cannot defy the United States,” a senior source at Italy’s Saras, which operates the 300,000-barrels-per-day Sarroch refinery in Sardinia, told Reuters. Saras is determining how best to halt its purchasing of Iranian oil within the permitted 180 days, the source said, adding: It is not clear yet what the U.S. administration can do but in practice we can get into trouble.

Saras is hardly alone: virtually all other European brand refiners, including France’s Total, Italy’s Eni, Spain’s Repsol and Cepsa as well as Greece’s Hellenic Petroleum are preparing to halt purchases of Iranian oil. These refiners account for most of Europe’s purchases of Iranian crude, which represent around a fifth of the country’s oil exports.
Iran’s crude sales to foreign buyers averaged around 2.5 million bpd in recent months; and while the bulk of the exports go to Asia, roughly 500kbp/d in Iranian output will now be mothballed.
There is a few months before all purchases are cut off: the companies will continue to purchase cargoes until the sanctions take effect, after the 180-day wind down period ends on Nov. 4.

The EU is urging the Trump administration to exempt European companies from sanctions on Iran, as fears grow over the fallout of the US abandoning the international nuclear deal with Tehran.

Ministers from Germany, the UK and France, along with EU Foreign Policy Chief Federica Mogherini, have signed a letter asking the US to allow its companies to continue to trade with Iran and spare certain industries from punitive measures.
The letter, dated June 4, was addressed to US Treasury Secretary Steven Mnuchin and  Secretary of State Mike Pompeo. It expressed ‘strong regret’ over President  Donald Trump's decision to withdraw from the 2015 Iran deal, to which their nations were also signatories.

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📝 We ask the American authorities, in a letter signed with Germany, the UK and @eu_eeas to exempt European businesses doing legitimate trade in Iran from all extraterritorial American sanctions. Those businesses must be able to pursue their activities.

Boeing Refuses to Deliver Any Aircraft to Iran Amid US Sanctions Threat

6 June, 2018

Boeing had previously claimed that it would respect the US sanctions re-imposed on Tehran by US President Donald Trump, but did not specify its business plan.
Boeing spokesman said Wednesday, the company would not collaborate with Tehran, refusing to deliver planes to Iran due to the US sanctions, effectively aborting a pair of large contracts with Iranian carriers.
"We have not delivered any aircraft to Iran, and given we no longer have a license to sell to Iran at this time, we will not be delivering any aircraft," the Boeing spokesman said.
In May it was reported, that Boeing's $20bn Iran contracts were frozen due to the sanctions.
IranAir has previously signed $16.6 billion contract with Boeing for the sale of some 80 passenger planes and also made a $10 billion deal with the Boeing's rival Airbus for the sale of 100 jetliners. However, the sanctions against Iran would cancel those deals. The European corporation was also impacted by the Trump's decision because some components of its aircraft are manufactured in the US.

Last year Trump's administration also probed the possibility of stopping sales of Boeing aircraft to the Iranian airlines amid the growing tensions between the countries

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