In early October, Iran’s oil minister acknowledged that US sanctions had dealt a blow to Iran’s oil sector.
Iranian Oil Minister Bijan Zanganeh told reporters on October 6 that China’s state oil company had pulled out of $5 billion deal in the South Pars Development Plan.
“The Chinese Company (CNCP) has withdrawn from the 11th phase of the development of South Pars Gas field”, he told reporters in Karaj.
In 2017, France’s Total and CNPC signed a contract worth $4.8 Billion for the development of 11th phase of the South Pars gas field with a production capacity of 56 million cubic meters of gas per day. Total abandoned the deal after the US left the Joint Comprehensive Plan of Action (JCPOA).
Total and now CNPC’s withdrawal could lead to serious challenges in completing the 11th Phase of the South Pars project.
The US State Department’s spokesperson welcomed the Chinese firm’s move to cut support for the Iranian regime.
“The Chinese company, and more than 100 other companies, made a wise decision to stop trading with the Iranian regime,” Morgan Ortagus tweeted on October 6.
“It’s not worth exposing your assets to US sanctions”.
The policy of “maximum pressure” and sanctions against the Iranian regime has also effected Turkey’s economic trades with the regime.
A recent Turkish Statistical Institute report showed a drastic reduction in trade volume with Iran compared to last year.
Official statistics show that Iran’s total exports (oil and gas) to Turkey in the first eight months of this year amounted to about $ 2.9 billion, down 43% from the same period last year. Much of this decline has been at the expense of Iran’s oil sector.
The Turkish Statistical Institute also said that almost no oil shipments from Iran were imported in June and July. In the past seven months, Turkey had less than 2.1 million tons of crude imports from Iran, down 50% from the same period last year.
Zanganeh said that US sanctions, “were dealing the biggest blows” to Iran’s oil sector.
“We wanted to do this with France’s TOTAL, but unfortunately in enforcing the sanctions, both Total and China’s CNCP withdrew. The conditions for the sanctions were such that they could not and did not want to (be part of the deal),” Iran’s minister of oil added.
“This sanction is very different from the previous one. In the previous one, natural-gas condensate was not sanctioned, and 20 countries from Asia, Europe and Africa had exemptions from the United Nations to buy oil from Iran,” the minister said.
The National Iranian Oil Refining and Distribution Company (NIORDC) has now reduced Iran’s petrol quota by 10 litters. Meanwhile, Zanganeh, said that “anything was possible” in terms of quotas and rising gas prices in this year’s budget bill.
It would seem that the government wants to make up for the shortfall in budget by rising gas prices, a move that the parliament opposes in fear of sparking popular protests.