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The U.S. sanctions on Iran’s oil and other industries are scaring foreign firms which are unwilling to sign any deals in any sector with Iran and are even rescinding existing contracts, Iran’s Oil Minister Bijan Zanganeh said on Monday, as carried by Radio Farda.
The U.S. re-imposed sanctions on Iran’s oil exports in the spring of 2018, when President Donald Trump pulled the United States out of the so-called Iranian nuclear deal, or the Joint Comprehensive Plan of Action (JCPOA) as the agreement is officially known.
The U.S. sanctions and the risk of secondary sanctions if firms continue to do business with Iran had many companies withdraw from developing Iranian energy resources, including France’s supermajor Total, which was the first to return to Iran after the lifting of the previous sanctions in 2016.
After the U.S. re-imposed sanctions on Iran’s oil industry and exports, Total – which had signed a deal to take part in the development of Phase 11 of the supergiant South Pars natural gas field – said in May 2018 it would not be in a position to continue the South Pars 11 gas project and would have to unwind all related operations before November 4, 2018, unless it was granted a specific project waiver—which it was not.
Companies in other industries have also left Iran because of the U.S. sanctions.
Iran now has “to rely on our own domestic capacities,” Zanganeh has recently said.
That is why Iran signed this month deals to boost the capacity of two of its oilfields with local companies.
Iran may see some of the sanctions eased should Joe Biden win the U.S. presidential election in November.
Biden has signaled that he would revisit and renegotiate the Iran nuclear deal, which could potentially lead to easing of some sanctions in exchange for Tehran returning to compliance under some revised form of JCPOA.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.