EU energy minister dispatched to Iran in bid to maintain trade ties

EU energy minister dispatched to Iran in bid to maintain trade ties

EU Climate Commissioner Miguel Arias Canete will be in Tehran today in an effort to keep the beleaguered Iran nuclear

Iran EU Canete

Photo: Financial Tribune

EU Climate Commissioner Miguel Arias Canete will be in Tehran today in an effort to keep the beleaguered Iran nuclear deal alive and reassure European companies doing business in Iran.

Following President Trump’s withdrawal from the deal, French energy giant Total has already signalled a possible exit from Iran, and Denmark’s Maersk is refusing new contracts with Tehran.

At risk is up to $25 billion of EU-Iran trade, as the EU is Iran’s third-largest trade partner. US sanctions could force European companies out of Iran, costing the likes of Italy, which generates $5.9 billion in trade with Iran and has a debt-to-GDP ratio of 130%. For Tehran, $2 billion gas project would halt if Total leaves the country. Oil and banking could also be hit.

Brussels could shield European companies by law from Washington-imposed fines for trading with states like Iran. However, many EU companies prefer to seek waivers for fear of incurring Washington’s wrath and suffer US business losses.

Canete’s mission is a symbolic gesture to keep Tehran in the loop, but, given pressure from Washington, it is likely to be an uphill battle to keep European companies in Iran.

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