Global Geopolitical Series: Companies are likely to abide by Iran sanctions fearing Trump

Iranian President Hassan Rouhani is touring Europe this week to shore up support for the Iran nuclear agreement and to discuss the future of Iranian oil imports to Europe. After his visit in Switzerland, Mr. Rouhani would head to Austria and ultimately Vienna to meet five other current parties to the Iran nuclear agreement; China, United Kingdom, Germany, France, and Russia. Europe has already authorized a provision in the European Union Treaty that makes it illegal for the European Companies to abide by unilateral sanctions of the United States.

However, Mr. Rouhani could ultimately fail as not many companies would be eager to counter President Trump’ fury as it could prove very costly. Reports are out that the United States is pressing the EU to take a tough stance on Iran and last month, United States’ ambassador to the United Nations, Niki Haley visited India to press upon the gravity of complying with the US sanctions. India’s largest state-owned bank has already announced that it will not be facilitating the purchase of Iranian crude once the U.S. sanctions are re-imposed. South Korea, a close Trump ally has promised cuts in imports of Iranian oil.

Despite EU taking a stance against the U.S. sanctions by passing the treaty provisions, several large EU companies France, Italy, Spain, and Greece have announced that they will not be risking U.S. sanctions despite EU assurance. Big names include France’s Total, Italy’s Eni and Saras, Spain’s Repsol and Cepsa as well as Greece’s Hellenic Petroleum. These companies are the largest buyers of Iranian crude oil in Europe accounting for a fifth of Iranian crude exports.