EU moves to protect European firms from US sanctions on Iran

Richard Drew — The Associated Press

Richard Drew — The Associated Press

European and American companies could lose billions of dollars in commercial deals struck since the 2015 Iranian nuclear accord, and lose access to a major new export market. "And the Iranians must be held accountable for this", Jubeir told CNN. Nearly one-third of Iranian oil shipments this year have gone to China, according to energy research firm Genscape.

On Tuesday, Trump promised to impose "strong" sanctions on the OPEC country, which is fourth in the world by crude oil reserves.

"Do we want to be vassals who obey decisions taken by the United States while clinging to the hem of their pants?", Mr Le Maire asked.

Trump said on Tuesday that the USA would withdraw from the "horrible, one-sided deal that should have never, ever been made". Brent crude futures jumped $1.30, or 1.7 percent, to settle at $76.17 a barrel.

The United States imports no crude directly from Iran.

In his withdrawal speech, Trump said that he would quickly move to reimpose all sanctions on Iran, not just those that were of immediate concern. "It is still a work in progress and requires sustainability", Barkindo said.

"We will find the right way and at the right time to respond to this", he warned.

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Reinstating sanctions undercuts the United Nations Security Council, as well as our European allies that are signatories to the JCPOA.

They would have to wind up investments by November or face U.S. sanctions. For oil and other petroleum products there will be a 180-day period in which people doing business with Iran will be able to wind down those operations before facing penalties.

USA output will likely rise further this year, towards or past Russia's 11 million bpd, as its energy firms keep drilling for more. Iran delivered 766,000 barrels per day to China in March and almost 700,000 barrels per day in April, according to ClipperData.

Without China on board, efforts to punish Iran may lack teeth.

At that time, conflict had engulfed fellow OPEC member Libya, driving its oil production down to little more than 200,000 barrels per day from around 1.4 million bpd in the space of 12 months.

In an interview with CNNMoney, OPEC Secretary General Mohammad Barkindo said that any factor that prevents the smooth running of the oil industry "will not be in the interest of the global economy".

Another factor that's helping to reduce supply is an agreement between OPEC and other major producers including Russian Federation to slash output.

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