Robert Harneis -TDO- (FRANCE)- French energy giant Total has formally closed its operations in Iran. CNPC has taken over giving them an even greater share in the South Pars project. The company asked the United States for permission to stay. This was refused.
Despite EU attempts to protect them from US sanctions many companies are pulling out of ventures in Iran they had only just started or revived. This is doing the West no good but is great for China, Russia, India and Turkey.
China, by contrast, is honoring the P5+1 nuclear deal, exactly as they said they would. Chinese officials reiterated on Monday that they would continue to import Iranian oil. They are by far Iran’s largest customer.
To the extent China is making any changes at all, they are shifting imports to Iranian-owned tankers. They appear to believe this will make it even harder for the US to do anything about their defiance of the demand to stop buying oil. In practice, China is too powerful an economic power for the US to do anything to anyhow.
The Total pullout is probably what prompted the Iranian Foreign Ministry to issue a statement urging the EU to speed up its promised efforts to try to preserve the P5+1 nuclear deal in the absence of the US. They have warned if the EU can’t assure them benefits, they might withdraw from the deal as well, and are growing impatient at the EU’s inability to convince even EU companies that they’re serious about defying Trump.
Total is not the only French company worried about US sanctions. Air Liquide has also withdrawn. The French car manufacturers PSA and Renault are also concerned. PSA as announced that it has begun the suspension of its operations in the country. Renault has yet to make its position clear. Chairman Carlos Gohsn has explained that he does not intend abandoning Iran, although he does not wish to expose his company to US sanctions.
The problem for the European companies is that their business with the US is currently far more valuable than that with Iran. The situation is never the less humiliating for the European Union and the companies and will damage European business with Eurasia in the future. In the long run that is where the business growth will come from.
It is difficult to believe that the Europeans will not draw conclusions about the limits of their alliance with the United States and try to protect themselves from sanctions in the future.