Western oil firms stop business with Iran; UAE freezes bank accounts

Published: Jun 28, 2010 22:27 Updated: Jun 28, 2010 22:27 

ABU DHABI: Iran faced growing economic pressure on Monday after two Western oil 
firms halted business with it, and a Gulf country seen as a trade lifeline for 
Tehran moved to freeze some Iranian-linked bank accounts.

The developments underlined the major oil producer's increasing international 
isolation over a nuclear program it says is aimed at generating electricity but 
major powers suspect is intended for making bombs.

France's Total joined an expanding list of companies that have stopped gasoline 
sales to Iran, and Spain's Repsol said it had pulled out of a contract to 
develop part of the country's huge South Pars gas field in the Gulf.

"Total has suspended its sales of gasoline or refined products to Iran," a 
company spokesman said in Paris.

The decisions were announced four days after the US Congress approved a bill to 
penalize firms supplying gasoline to the Iran, which is the world's 
fifth-largest oil exporter but lacks sufficient refining capacity for its own 
fuel needs.

The director of the US Central Intelligence Agency, Leon Panetta, speaking in 
Washington on Sunday, said targeted economic sanctions would probably not deter 
the Islamic Republic from seeking a nuclear capability.

Panetta also asserted that Tehran had enough nuclear material for two bombs if 
further enriched.

Iran's hard-line president, Mahmoud Ahmadinejad, dismissed the latest punitive 
measures, declaring that his country could become self-sufficient in gasoline 
production "within one week, there is no problem."

He told a Tehran news conference that Iran was prepared to resume nuclear talks 
with major powers but only after a delay of several weeks to "punish" the West 
for imposing new sanctions, and with friendly countries included at the table.

"Are they so afraid of two bombs? There are 20,000 bombs stockpiled and they 
are so afraid of the possibility of the existence of two bombs? This is really 
amazing," he said.

The UN Security Council has imposed four rounds of sanctions since 2006 over 
Iran's refusal to halt sensitive uranium enrichment.

UAE 'playing ball'

Moving to implement the latest round of measures, the UAE's central bank told 
financial institutions to freeze any accounts belonging to dozens of 
Iran-linked firms targeted by the June 9 UN resolution, a banking source said.

Last week an Emirati newspaper reported that the seven-member United Arab 
Emirates federation was "tightening the noose" on companies the Security 
Council suspects act as fronts for supplies to Iran's atomic activities.

Iran and the UAE have close economic and historic relations and tens of 
thousands of Iranians live and work in trade hub Dubai and elsewhere in the 
Arab state, many of them involved in the multibillion-dollar, re-export trade 
to Iran.

But Dubai's ties with Tehran have drawn scrutiny from the United States, which 
is spearheading a drive to pressure Iran into halting nuclear enrichment, which 
can have both military and civilian uses.

Iran has long circumvented restrictions on goods blacklisted by sanctions and 
much of the trade goes via the UAE, said Middle East analyst Gala Riani of IHS 
Global Insight.

"The UAE, and Dubai especially, has come under a lot of pressure... to tighten 
restrictions and controls on Iranian firms," Riani said.

They are now "signaling that they are playing ball with the international 
community," she said.

The latest UN resolution calls for measures against new Iranian banks abroad if 
a connection to the nuclear or missile programs is suspected, as well as 
vigilance over transactions with any Iranian bank, including the central bank.

Going beyond the UN sanctions, the US Congress last week approved new 
unilateral measures to squeeze Iran's energy and banking sectors. The European 
Union has also decided to implement additional measures.

Royal Dutch Shell, BP, Reliance Industries and independent Swiss trader 
Glencore are among suppliers that have already either stopped fuel sales to 
Iran or decided not to enter into new trading agreements with it.

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