Iran is still trying to get EU help as more western companies exit the country ahead of renewed sanctions imposed by the U.S. In more bad news for the Islamic Republic, French-based CMA CGM, one of the world’s largest cargo shippers, announced on Saturday it would be pulling out of Iran for fear of being entangled in U.S. sanctions. “Due to the Trump administration, we have decided to end out service for Iran,” the company said.
CMA CGM, operates the third largest container shipping fleet in the world, with 445 ships, capturing 11 percent of global container ship capacity. The French company’s move comes as a myriad of international firms have left Iran, amid pressure from Washington.
On the energy front, one of the biggest setbacks for Iran came when French oil major Total SA announced in May that it would pull out of Iran in fear that it would not be able to access the U.S. financial system.
Also, on Saturday, embattled Iranian President Hassan Rouhani demanded, again, that EU states do more to offset impending U.S. sanctions leveled against the country over its nuclear ambitions.
Just the day before, foreign ministers from five remaining Iran nuclear accord signatories (the UK, France, Germany, China and Russia), said they offered economic measures to Iran, but Tehran balked, claiming they did not go far enough.
"European countries have the political will to maintain economic ties with Iran based on the JCPOA [nuclear deal], but they need to take practical measures within the time limit," Rouhani said on Saturday on his official website.
Growing dissent within Iran
Economic problems have also stirred dissent within Iran over the past few weeks, prompting protests throughout much of the country. Since the U.S. withdrawal from the Iranian nuclear deal on May 8, the rial has lost more than 40 percent of its value. Related: The Critical Chokepoint That Could Send Oil To $250
"Iranians of different classes are increasingly willing to challenge the regime," said Behnam Ben Taleblu, a research fellow at Washington-based think tank the Foundation for Defense of Democracies, in comments carried by CNBC. "The fate of the Rouhani government... will be a footnote in this larger struggle for representative government."
However, given the strong hand that the government wields, particularly in deploying its powerful security forces, many see little chance of regime change in the country. “The security forces, the regime’s ultimate bulwark against a serious challenge, will likely have a free hand to limit the scope of protests should they expand,” Henry Rome, an Iran analyst at Eurasia, said.
Tired of Trump’s tweets
Iran, OPEC’s third largest oil producer, is also balking at President Trump’s recent tweets leveled at OPEC to put pressure on the oil-producing cartel to reign in higher oil prices.
Iran’s oil minister Bijan Zanganeh accused Trump on Saturday of insulting OPEC by ordering it to increase production and reduce prices, adding that Iranian output and exports had not changed as a result of U.S. pressure. Just three days earlier, Trump accused OPEC of driving fuel prices higher, and (again) urged Saudi Arabia to produce more oil if it wanted the U.S. to continue protecting the Kingdom against its top rival Iran.
“Mr Trump sends every day a new message that creates uncertainty in the market,” Iranian Oil Minister Bijan Zanganeh said in an interview with state television. “Trump’s order to OPEC members to increase production is a great insult to those governments and nations and destabilizes the market.” He added that tensions between Iran and the U.S. were a “trade war” and said it had not led to changes in Iranian oil production and exports.
However, once sanctions become fully implemented, as much as 500,000 barrels per day (bpd) of Iranian oil could be removed from global oil markets, perhaps more, creating a no-win situation for Iran. With U.S. sanctions about to take full effect in early November and with OPEC de facto leader Saudi Arabia as well as non-OPEC producer Russia pledging to ramp up production to cover any decreases in supply, Iran has few bargaining chips left at its disposal.
Related: How Bad Is Iran’s Oil Situation?
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The country has already indicated that EU offers for help aren’t sufficient, while other producers can cover the loss of Iranian barrels even if it means stretching some of those producers’ spare capacity thin.
Buyers, also under threat from Washington, have already started cutting back Iranian oil procurement. India, for its part, the world’s fourth largest crude oil producer, announced last week that it would be suspending purchases of Iranian oil for a ‘drastic reduction or zero’ imports.
By Tim Daiss for Safehaven.com
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