Politics delay progress for IOCs as Tehran turns to Beijing, Moscow

WITHIN the last few weeks, a sea-change has taken place in the attitude of Iran’s leadership towards doing business with the West, and with Russia and China.

Supreme Leader Ayatollah Ali Khamenei has spoken openly of his frustration with the delays in contract signings caused by ongoing financial sanctions from the US government.

Iran is frustrated by “the lack of progress by Western firms in finalising deals that were agreed in principle over the past few months and increased sanctions-related rhetoric and actions by the new US presidential Administration,” according to Mehrdad Emadi, senior economist for risk analysis and energy derivatives markets consultancy Betamatrix.

He added that in light of “the ongoing willingness of Russia and China to tangibly increase investment into Iran, the view now is that co-operation with the West is getting Iran nowhere and that favour should be given to Russia and China”.

The key turning points in attitude all came in February, after Iran’s ballistic missile test at the start of the month.

Following this, the US added 25 individuals and entities to the list of ‘Specifically Designated Nationals’ (SDNs) held by the US Treasury’s Office of Foreign Assets Control (OFAC).

However, this overt extension of sanctions was far less damaging to Iranian interests than the corollary covert actions subsequently undertaken by the US against individual companies looking to become involved in the country.

In addition, February also saw a major setback to the reformist cause in Iran when, despite Tehran extending the deadline for final bids for oil and gas fields to February 15 from the end of January, no Western firm had finalised any oil and gas field deal with the country.

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