Iran Stiffens Resolve to Elude Sanctions in Face of Latest U.S. Penalties

Iran's oil minister says recent U.S. penalties against several companies in Iran and elsewhere will only encourage Tehran to evade the sanctions regime imposed to hinder its nuclear energy program.

"The sanctions are cruel and illegal, and we will keep fulfilling our duty with regards to circumventing the sanctions," Bijan Zanganeh said Sept. 3. "We do not recognize these sanctions."

Zanganeh was referring to the Aug. 29 U.S. announcement of penalties against more than two dozen businesses and individuals ranging from banks to shipping firms for their suspected links with Tehran's nuclear program. They include Dettin SpA of Italy, accused of helping Iran's petrochemical industry, and Goldentex FZE of the United Arab Emirates, believed to have worked with Iran's shipping sector.

The United States says such companies were helping Iran's nuclear program, which Tehran says is peaceful but the West suspects may be aimed at developing a nuclear weapons.

The sanctions are intended to prevent sales of Iranian oil to the West and make it increasingly difficult for Iran's fleet of oil tankers to obtain insurance and financing for deals with Asian buyers. Nevertheless, Iran managed to ship 29.4 percent more crude to major Asian customers in July than it did a year earlier, most of it to China, Tehran's biggest client.

To sidestep the sanctions, Iran reportedly has previously directed its tankers to send incorrect satellite signals to confuse global tracking systems. Iranian state tanker company NITC reportedly changed tanker names in an effort to further impede tracking.

Government officials in Tehran say the sanctions cast a shadow over critical upcoming negotiations between Iran and the five permanent members of the United Nations Security Council - the UK, China, France, Russia and the United States - plus Germany, a group known as the P5 +1.

The two sides failed to meet a July 20 deadline to reach an agreement under which Tehran would limit its nuclear energy research in exchange for the West tapering off the sanctions. A new deadline of Nov. 24 has been set and talks are to resume in New York when the UN General Assembly convenes later in September.

Jofi Joseph, a former member of the White House National Security Council, warned that unless Iran cooperates, the most recent sanctions would be "only a preview of what is to come."

Iran seems unmoved by such predictions. On Sept. 1, the first vice speaker of Iran's parliament, Mohammad Hassan Aboutorabi-Fard, said the new penalties represent Washington's impotent effort to compensate for its recent failures in the Middle East.

"The new sanctions will not only fail to have any achievement for Washington, but will weaken the U.S. stance in the negotiations between Iran and the P5+1," Aboutorabi-Fard said.

By Andy Tully of Oilprice.com