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SUNDAY, OCTOBER 17, 2010 U.S. deal with European oil firms hobbles Iran Air
Under sanctions, carrier is unable
to make fuel stops BY THOMAS ERDBRINK
tehran — A recent agreement between four of Europe’s largest oil companies and the United States aimed at further isolating Iran is already having an impact, with Iran Air, the Islamic repub- lic’s national carrier, unable to refuel its planes in most of Eu- rope. The fueling problem follows a
newpush by the Obama adminis- tration to move beyond the strict letter of sanctions it imposed to a broader attempt to discourage in- ternational businesses from deal- ing with Iran. It also illustrates a shift away
from an earlier U.S. policy of reachingoutto the Iranianpeople and trying to target mostly state organizations central to Iran’s nu- clear program. Officials now ad- mit that the increased pressure is hurting ordinary Iranians but say they should blame their leaders for the Islamic republic’s increas- ing isolation. Under the agreeement, an- nounced in Washington on Sept. 30, Total of France, Statoil of Norway, Eni of Italy, and Royal Dutch Shell of Britain and the Netherlands pledged to end their investments in Iran and avoid newactivity in the country’s ener- gy sector. In turn, U.S. officials said, thecompanieswouldbepro- tected from possible U.S. penal- ties for doing business with Iran. In recent weeks, several major
oil firms, including British Petro- leum, Royal Dutch Shell and Q8, have abruptlycanceled jet fuel de- livery contracts with Iran Air.The move by some big oil companies that were not part of the Septem- ber agreement appears to indi-
RAHEB HOMAVANDI/REUTERS
Members of Iran’s air force shout anti-U.S. and anti-Israel slogans during prayers in Tehran. The latest sanctions engineered by theUnited States are now affecting the private sector and ordinary civilians.
cate a ripple effect across the industry, as administration offi- cials had hoped. “The goal here is . . . to end companies from doing business within Iran,” Deputy Secretary of State James B. Steinberg said when he announced the deal. He addedthathehopedotherswould “see that this is what responsible companies are doing and that they should follow in those foot- steps.” As a result of the canceled jet
fuel contracts, all Iran Air planes departing from destinations such as Amsterdam, London and Stockholm are now forced to make lengthy fuel stops either at an airport in Germany or one in Austria, where Total of France and OMV of Austria are still pro- viding the 66-year-old airline
with jet fuel until their contracts run out, possibly as soon as next month. At that point,Iran Air could be forced to cancel or se- verely reduce flights. During such a stop in the Aus-
trian capital last Sunday, several passengers complained about the unannounced stop. “What do we have to do with our government?” an Iranian man asked loudly, af- ter discovering to his surprise that the plane had landed on the Viennatarmac. “We arebecoming prisoners because of these dis- agreements between Iran and America.’’ Iran Air’s refueling problems
come as theU.S. attempts to pres- sure the Islamic republic to aban- don its nuclear program by tar- geting those who do business with Iran in the fields of finance,
insurance, and transportation. Earlier moves to isolate Iran
focussed on Iranian state organi- zations suspected of producing a nuclear weapon such as the Revo- lutionary Guard Corps or the Ira- nian Atomic Energy Organiza- tion. But the latest sanctions, which included restrictions on the sale of refined oil products to Iran, as well as the growing pres- sure on businesses to steer clear of Iran, are now affecting the private sector and ordinary civil- ians. For example, it is becoming increasingly difficult to import items from luxury cars to raw materials. Last week, Japan’s top oil ex-
plorer, Inpex Corp., said it had pulled out of Iran’s Azadegan oil field project, citing concerns that the U.S. sanctions could make it
more difficult for the company to raise money fromU.S. banks. Iran Air, a state airline, is the
mainlifeline for Iranians with the outside world. Nearly 500,000 passengers a year fly between Tehran and 11 European capitals and beyond, a top Iran Air official said. “We will continue to fly to Eu-
rope, if needed even with half occupancy to save fuel which we can bring from Tehran,” saidMo- hammad Jalali, an Amsterdam- based district manager for Iran Air. “But we are losing time, mon- ey and passengers,” he said. President Obama told Persian
language BBC Farsi channel in September that he was “con- cerned” for the Iranian people, but that they have to blame their leaders for the increasing isola- tion their country faces. State Department spokesman
P.J. Crowley said Friday that the administration was “directing our efforts at entities that we think support the government and its policies,” but acknowl- edged that “there are ripple ef- fects and that there are impacts that go beyond that.” “We want to see the Iranian
people have the same opportuni- ties to travel, to engage, as others in the region and around the world have,” Crowley said. “And the only thing that’s impeding Iran from having that kind of relationship with the United States and the rest of the world is the government and policies of Iran.” Under sanctions passed by Congress in July, jet fuel sales of as much as $5 million a year are permitted. Sanctions by the Euro- peanUnion specifically single out the civilian operations of Iran Air as being allowed, and do not call for restrictions against the air- line. Jalali of Iran Air Amsterdam — an average station for the air- line inEurope—said itpurchased far below the $5 million limit.
After its delivery contract with
Q8 was suddenly terminated by the Kuwaiti company, Iran Air approached all other possible sellers without success. “None of the oil companies are telling us why they have broken their con- tracts. We have agreements to operate from European coun- tries; we are entitled to our fuel,” Jalali said in an interview last week.
Representatives for major oil
firms say jet fuel sales to Iran Air are good business but too danger- ous to pursue given the treat of sanctions by the United States. “All big oil companies are in daily contact with the U.S. State De- partment regarding Iran,” said a representative of a major oil firm on the condition of anonymity because of the sensitivity of the subject. “Be sure that the Obama administration is fully aware of the situation Iran Air is in.” Austrian oil company OMV,
which is still delivering jet fuel to Iran Air planes in Vienna, said in its contract with Iran Air is “in line with all regulations by the E.U. and the United Nations.” A person authorized to speak for the company said that commit- ments would be honored “for the time being.” A representative of Total of France, which is supply- ing Iran Air in Cologne,Germany, said it was not able to respond to questions currently. Total is one of thecompaniesthat agreed with theUnited States toendall invest- ments in Iran. Iran Air is planning to take its
case to the international court of justice inTheHague. “Traveling is a human right, airline conven- tions are broken and neither the European Union, U.S. or United Nations sanctions are calling for these restrictions against us,” Jalali said. “This is a low-levelwar between Iran and the U.S., but I don’twantourpassengers tobein the middle.”
erdbrinkt@washpost.com
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