U.S. Efforts to Force Iran Out of European Energy Markets Have Failed

U.S. Efforts to Force Iran Out of European Energy Markets Have Failed

Despite the European Union’s attempts to save the Joint Comprehensive Plan of Action, which saw Iran reduce its low-enriched uranium by 98% and eliminate its stockpile of medium-enriched uranium in return for economic relief, JCPOA is hanging by a thread because of Washington’s withdrawal from the deal in October 2017.

The European Statistical Office revealed that from January to September of this year, trade between the EU and Iran was at €3.86 billion, a massive 74.92% drop compared to the same period in 2018. The report revealed that Germany (€1.23 billion), Italy (€734.78 million) and the Netherlands (€376.73 million) were Iran’s top three trading partners in the EU, while trade with Greece (€32.08 million), Luxembourg (€506,316), Spain (€207.36 million), France (€296.5 million) and Austria (€102.11 million) had plunged by  97.13%, 91.38%, 91.17%, 86.79% and 82.38% respectively.

Although Iran’s trade with Cyprus at €6.25 million and Bulgaria at €64.97 million increased by 85.12% and 29.24% respectively year-on-year— the highest among EU states — it still does not offset the massive decline in trade with Greece, Luxembourg, Spain, France and Austria. The major decline in trade is attributed due to European companies’ unwillingness to risk losing business with the U.S. for the sake of the much smaller Iranian market. Effectively, U.S. President Donald Trump’s economic war with Iran aims to diminish Iranian-EU trade so that the U.S. may reap benefits from boosting its own trade in oil and other commodities. However, this is set to change.

With this dramatic downturn in trade with the EU, Iran is now pushing to diversify its economy even further to overcome a reliance on oil and take a number of measures in an attempt to counter U.S. economic aggression, including increasing taxes, cutting energy subsidies and to borrow money from friendly states. Iranian President Hassan Rouhani explained on Sunday in parliament that oil revenues are expected to drop by at least 70% and that Iran’s budget next year “is designed to resist against sanctions and to announce to the world that we run this country despite sanctions.”

The Iranian president explained that the new budget will reach $115.3 billion because of the reduction of oil exportation from 2.8 million barrels of oil a day before Trump’s May sanctions to 500,000 barrels a day. In addition, Iran will sell more bonds in the domestic market and plans to increase revenues from taxes by 13%, but these changes come as the International Monetary Fund has already forecasted that the Islamic Republic will have a reduction of its economy of about 9.5% this year.

This “budget of resistance,” as described by Rouhani, is “contrary to what the Americans thought. With the pressure of sanctions, our country’s economy would encounter problems, thank God we have chosen the correct path… and we are moving forward.”

Iran’s Deputy Foreign Minister Abbas Araqchi announced on Monday that the European signatories to the JCPOA will not activate the “trigger mechanism” for the time being that could see the return of sanctions against the Islamic Republic. It is unlikely that the EU or Iran will withdraw from what remains of JCPOA as they attempt to bypass U.S. sanctions, which can see the besieged country improve its economy through increased trade with Europe.

Not only has the EU pledged to maintain its nuclear deal commitments, but in a joint statement late last month, Belgium, Denmark, Finland, the Netherlands, Norway and Sweden said they will attain shares in Instrument in Support of Trade Exchanges (INSTEX), which was launched by Britain, France and Germany in January to allow European companies to trade with Iran without using U.S. dollars so they could be protected from U.S. sanctions.

In their joint statement, they said:

“In light of the continuous European support for the agreement and the ongoing efforts to implement the economic part of it and to facilitate legitimate trade between Europe and Iran, we are now in the process of becoming shareholders of INSTEX, subject to the completion of national procedures.”

This is also a part of a wider move to counter strong U.S. efforts to muscle in on the European oil market as U.S. sanctions have scared buyers from acquiring Iranian and Venezuelan crude. The so-called hydro-fracking and shale revolution that began a few years ago has seen the U.S. aggressively seek to export its oil to new markets. It is now unsurprising that earlier this year, U.S. crude shipments to Europe reached new records, behind Russia but still more than Nigeria and Libya, who are important OPEC members.

Therefore, a major reason for the false allegations by Trump that Iran was violating the JCPOA was to force Iran out of the European market to push on the U.S. entrance. It appears that Trump’s plan has failed. Not only has Iran formulated its “budget of resistance,” but with Belgium, Denmark, Finland, the Netherlands, Norway and Sweden becoming shareholders of INSTEX, they are prepared to continue their economic relations with Iran while being protected from U.S. repercussions. Effectively, although the U.S. has achieved a short-term reduction in European-Iranian trade, it will not only recover, but also be strengthened as new mechanisms are being made to bypass U.S. banks and dollars.

************

Original article

Paul Antonopoulos is a Research Fellow at the Center for Syncretic Studies.

Published to The Liberty Beacon from EuropeReloaded.com

••••

The Liberty Beacon Project is now expanding at a near exponential rate, and for this we are grateful and excited! But we must also be practical. For 7 years we have not asked for any donations, and have built this project with our own funds as we grew. We are now experiencing ever increasing growing pains due to the large number of websites and projects we represent. So we have just installed donation buttons on our websites and ask that you consider this when you visit them. Nothing is too small. We thank you for all your support and your considerations … (TLB)

••••

Comment Policy: As a privately owned web site, we reserve the right to remove comments that contain spam, advertising, vulgarity, threats of violence, racism, or personal/abusive attacks on other users. This also applies to trolling, the use of more than one alias, or just intentional mischief. Enforcement of this policy is at the discretion of this websites administrators. Repeat offenders may be blocked or permanently banned without prior warning.

••••

Disclaimer: TLB websites contain copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available to our readers under the provisions of “fair use” in an effort to advance a better understanding of political, health, economic and social issues. The material on this site is distributed without profit to those who have expressed a prior interest in receiving it for research and educational purposes. If you wish to use copyrighted material for purposes other than “fair use” you must request permission from the copyright owner.

••••

Disclaimer: The information and opinions shared are for informational purposes only including, but not limited to, text, graphics, images and other material are not intended as medical advice or instruction. Nothing mentioned is intended to be a substitute for professional medical advice, diagnosis or treatment.

Be the first to comment

Leave a Reply

Your email address will not be published.


*