Tuesday, 29 June 2010

Total stops gasoline supply to Tehran

Total has issued an official statement, saying that it has stopped gasoline sales to Iran, as a show of support for the international community's efforts to curtail Iran's nuclear programme. Total is the fourth western oil company, who has ceased doing business with the Islamic Republic.

The decision is thought to be linked to the fourth set of sanctions, approved by the US Congress, which constrict US companies supplying Iran with gas and conducting financial business transactions with key Iranian banks.

Industry experts have suggested that international suppliers of gas to Iran could be faced with curt restrictions to the US banking system, property transactions and foreign exchange, and are therefore intent to safeguard their own business interests.

Iran's dependency on gas imports is immense, due to insufficient refining capacity, and the impact of gasoline shortage has already been felt by the Iranian capital.

Shell, LUKOIL, BP, Reliance Industries and Glencore, are some of the companies that have either stopped fuel sales to Iran or intend to do so upon expiration of trading agreements. Repsol said it had pulled out of a contract it won with Shell to develop part of the South Pars gas field in Iran, and has no further plans to do business with the Islamic Republic.

Total who, up till recently, was still in negotiations with Tehran to take part in South Pars phase 11, has said that despite its, “interest in the South Pars 11 project,” the group “has not moved ahead with it” or sees any possibility to do so in the near future.

Source: Reuters

For more news and expert analysis about Iran please see Iran Strategic Focus.

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