Oil Minister: Sanctions pressures are harder than war

Bijan Zanganeh has reported the reluctance of Chinese and Russian companies to cooperate with Iran. He says that no one in Europe buys Iranian oil and that Italy and Greece, which are not subject to US sanctions, “do not even answer our calls.”

In a press conference held on Tuesday morning, February 5, Iranian Oil Minister Bijan Namdar Zanganeh again responded to criticism raised by a number of members of parliament regarding his refusal to sign contracts with Chinese and Russian companies.

On February 29, 72 members of parliament in an open letter to the heads of the three branches of government accused the Minister of Oil of not only failing to show practical efforts to counter the sanctions, but also of intentionally or unintentionally blocking almost all the existing loopholes to neutralize the sanctions.

In this letter, the Ministry of Oil is accused of, among other things, inaction and neglect of "conducting strategic negotiations with major regional countries that are traditionally Iran's trading partners in the oil and gas sector," as well as failure to "develop cooperation in the upstream sector of the oil and gas industry with BRICS member countries, including China, Russia, Brazil, India, and South Africa."

Zanganeh responded to some of the details of the letter in the very first days of its publication, including saying that at the regional level, a contract to build a gas pipeline to Pakistan was signed years ago and "the pipeline has been implemented by Iran up to the border, but the Pakistanis are not ready to implement it, and the problem is that they openly say that they are not ready because of the pressures coming from abroad."

Regarding cooperation with the Chinese, he also said that "the Chinese are not willing to sign a contract with us under any circumstances."

“The other party is not available, what should I do?”

In his press conference on Tuesday, the Oil Minister, in a renewed reaction to the letter from 72 representatives, went a step further and said that Chinese and Russian companies are generally unwilling to cooperate with Iran: "Which contract was requested by the other party and we did not sign? When the other party is unwilling to sign, what can I do?" He added: "I was also in a war and I understand war, but these conditions are more difficult than war."

After the signing of the JCPOA, the development of Phase 11 of the South Pars natural gas field was entrusted to the French company Total and the China National Petroleum Corporation (CNPC). With the US withdrawal from the JCPOA in May and Total's withdrawal from the contract, Iran hoped that the Chinese would stick to the contract. But a month ago, the Chinese National Petroleum Corporation also announced that it was withdrawing from the contract due to US sanctions.

Three days ago, Mohammad Reza Jariri, a member of the Iran-China Chamber of Commerce, also announced the further restriction of transactions with this country and the lack of cooperation of Chinese banks with Iranian customers. He wrote in the ILNA news agency: "The Kunlun Bank was established to organize Iran's banking relations with China during the period of intensified sanctions against Iran and with the aim of circumventing the sanctions in the previous government... But this same bank is now supporting the sanctions imposed on Iran by the United States and announcing to the Iranian side that it will not trade with our country the items subject to sanctions. The situation has become such that it cannot be circumvented in the manner of the previous sanctions period."

Iraq has also complied with the sanctions.

Continuing his speech, Zanganeh referred to the pressure of sanctions and described the current situation as “more difficult than during the war.” He said that “America wanted to reduce Iran’s export income to zero, but it failed. Now they want to disrupt money transfers so that there will be high prices and shortages in Iran and people will worry.” After that, of course, Zanganeh acknowledged that there are also problems with selling Iranian oil. Citing the example that no one in Europe except Turkey is willing to buy oil from Iran, he added: “Greece and Italy have been exempted by America, but they do not buy oil from Iran and they do not answer our calls.”

The Iranian oil minister even considered oil and gas exchanges with Iraq to be subject to disruptions caused by US sanctions. According to him, “Iraq has cut off the 11,000-barrel Kirkuk swap after the sanctions on Iran.”

Kirkuk oil is re-exported to the outside world via the Iraq-Türkiye pipeline.

Another part of Zanganeh's speech was to mention the problems in selling oil on the energy exchange. The stated purpose of offering Iranian crude oil on the exchange is to counter US oil sanctions.

In the past few months, Iran has offered oil on the stock market four times, with only some of the oil sold in the first two rounds. In the third and fourth rounds, despite the fact that customers could pay the price of the oil in full in rials, there were still no buyers.

Acknowledging the failure of oil sales on the stock market, Zanganeh said: "The most the Ministry of Oil could do was to announce that purchases would be made in rials. Buying in rials also means capital outflow, but the heads of the three branches agreed to this issue and limited the supply."

Government officials had hoped that selling the oil in smaller batches by the private sector would reduce or at least delay the possibility of identifying oil buyers as the United States seeks to identify large shipments. But potential buyers apparently worry that the United States will not distinguish between the private and public sectors in imposing oil sanctions on Iran, and therefore few will take the risk of buying oil on the stock market.

Source: DW