European Union tells businesses to boost trade with Iran despite United States sanctions

Glen Norman
August 7, 2018

U.S. President Donald Trump said on Tuesday the new U.S. sanctions on Iran were "the most biting sanctions ever imposed".

Trump said the new sanctions target the Islamic Republic's automotive sector, its trade in gold and other precious metals, along with its currency, the Iranian rial, and other financial transactions.

"As we go more towards (the fourth quarter) ... that's when we really see the risk of prices going well into the 80s and potentially even into the 90s but very critical is how much Iranian production we lose", Amrita Sen, chief oil analyst at Energy Aspects, told CNBC Monday.

Iran has accused the US of reneging on the nuclear agreement, signed by the Obama administration, and of causing the country's recent economic unrest.

The European Union's diplomatic chief, Federica Mogherini, said the union, as well as Britain, France and Germany, deeply regretted the U.S. move.

"Most of the companies have already made up their mind, whether it's the German Siemens, the French carmaker PSA, the Danish Maersk - all these companies that have said they don't want to risk losing access to the United States market, they don't want to risk losing access to the financing in dollars by U.S. banks, and also they don't want to lose their USA shareholders".

A lot of the practical effects of the sanctions are yet to be seen, as they depend heavily on which nations go along with United States demands.

The US sees the sanctions "as a tool to pressure Iran to come back to the negotiating table to rehash the nuclear deal on terms more to Trump's liking".

Other countries have also asked European Union officials for details on the blocking regulations, as they explore ways to bypass sanctions.

Iranian officials in general are downplaying the impact of those sanctions, with President Rouhani labeling them "psychological warfare", and saying that their goal is to cause chaos across the region.

He blasted the agreement yet again yesterday, calling it a "horrible, one-sided deal (that) failed to achieve the fundamental objective of blocking all paths to an Iranian nuclear bomb".

"Negotiations with sanctions doesn't make sense".

He said Tehran has always believed in resolving disputes diplomatically.

Asked about threats to close the Strait of Hormuz, Mr Bolton said that would be Iran's "worst mistake yet". Israeli Prime Minister Benjamin Netanyahu hailed the renewed sanctions as "an important moment for Israel, for the U.S., for the region, for the whole world".

The European Union, which remains a supporter of the three-year-old nuclear pact with Iran, said it is taking counter-measures to blunt the impact of the sanctions Trump has reinstituted.

He added, "To this day, Iran threatens the United States and our allies, undermines the worldwide financial system, and supports terrorism and militant proxies around the world".

Israeli Prime Minister Benjamin Netanyahu hailed the renewed sanctions as "an important moment for Israel, for the USA, for the region, for the whole world".

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