Sputnik: Since President Trump announced his decision on Iran, Chinese and European investors have been looking for ways to circumvent the US’s anti-Iranian sanctions. Meanwhile, the EU is reportedly considering ditching the dollar in payment for Iranian oil. To what extent has Washington shot itself in the foot with its Iran deal decision?
Francis Perrin: I would say that Chinese investors are far more advanced in this regard than European ones. For European companies, it is a new issue. The US dollar has been linked to the oil trade for a very long time, so it’s a very complex issue, and it will take some time for the Europeans to study it carefully and to take decisions. The European Union is not yet at this stage [at present].
Sputnik: What implications could the abandonment of the dollar in oil trade have for the US currency, and subsequently for Washington’s global economic clout? What’s your assessment of the potential damage?
Francis Perrin: The implications would be important. We know well that there are very strong links between US economic power and the role of the dollar. It has been the case for decades.
But it is a little early to be specific about these potential impacts. Let’s remember that the OPEC countries discussed several times various options about payment for their oil exports over a period of many years. At the end of the day, they kept the US dollar; so it’s not yet a done deal.
AFP 2018 / JOE KLAMAR
A security officer overlooks a street from a rooftop of the OPEC headquarters in Vienna. (File)
Sputnik: Europe has not caved so far under US pressure. It’s very interesting what’s going on at the moment between Europe and the US. Why have the European nations proposed to maintain trading with Iran despite Washington’s ultimatum?
Francis Perrin: The European countries are convinced that the nuclear deal with Iran is a very important and useful agreement, [one] that is respected by Iran…You do not abandon something which is working very well, even if of course it is not perfect; but nothing is perfect, at least on this earth.
So as far as the European Union is concerned, it is very important for them to keep this agreement. It’s important of course for their relationship with Iran, but it’s also crucial for some more global issues, including the fight against nuclear proliferation, the future of multilateralism, and of course the political situation in the Middle East. Let’s remember that the Middle East controls about 48% of proven oil reserves, and about 43% of proven gas reserves.
Constructive meeting with EU High Rep & E3 ministers in Brussels, following successful Beijing & Moscow visits. Positive start with solid political commitments. All agreed that much remains to be done in coming weeks to practically guarantee economic benefits for Iranian people. pic.twitter.com/SFJx3bnjIb
— Javad Zarif (@JZarif) 15 мая 2018 г.
Sputnik: EU foreign policy chief Federica Mogherini has said that Europe and Iran have agreed to come up with practical solutions in response to Washington’s move in the forthcoming weeks. What could Mogherini’s response be, in your view?
Francis Perrin: Several options are being considered. They are the following: First, to forbid European companies from complying with US sanctions. The second option is to push the European Investment bank to be involved in EU trade with Iran and EU investment in Iran. A third option would be for European countries to extend credit lines to Iran in order to develop trade with this country and European investment in this country.
A fourth option for the EU would be to sanction US companies if the US administration decided to sanction European companies which are involved in trading and investment activities in Iran. Another, and perhaps final option, would be to negotiate exemptions for European companies and interests with the US administration.
So far, no decision has been taken on any of these various options; each of them of course will be very carefully [debated] by the European Commission and by European countries. That being said, it’s clear that you cannot force European companies to buy Iranian crude oil or invest in Iran. At the end of the day, companies are trading, companies are investing, not countries and not governments.
The US is of course a superpower. It’s also an energy superpower, as it is now the leading LPG producer in the world. If European companies such as Total in France, Shell in the UK and the Netherlands, Eni in Italy, Cepsa in Spain, etc. – if these companies have at the end of the day to choose between Iran and the US, they will choose the US. So it’s a very difficult issue for the European Union when studying these various options which are on the table.
Golden Pass LNG Terminal on the Sabine-Neches Waterway in Sabine Pass, Texas
Francis Perrin is a senior research fellow at the French Institute for International and Strategic Affairs, and senior fellow at the Rabat, Morocco-based OCP Policy Center focusing on energy. The views and opinions expressed by Mr. Perrin are those of the expert and do not necessarily reflect those of Sputnik.