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
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
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
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
"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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