EU efforts to continue trading with Iran despite the reimposition of US sanctions looked to be crumbling Analysts said that the reach of the US financial system and the risk of losing business in the huge North American market made non-compliance impossible for many firms LONDON: EU efforts to continue trading with Iran despite the reimposition of US sanctions looked to be crumbling on Thursday despite a fresh plea by French President Emmanuel Macron. Speaking at the EU-Western Balkans Summit in Sofia, Bulgaria, Macron said that Europe would try to protect European companies with Iranian business interests despite the threat of US retaliation when sanctions bite later this year. President Donald Trump last week suspended US participation in an accord brokered by President Barack Obama that eased sanctions in return for Tehran scrapping its nuclear weapons program. “We’ve had a vibrant discussion on Iran. The 2015 nuclear agreement is a crucial element of peace and security in the region. We have opted to support it whatever the US decides to do,” said the French president on arrival at the Sofia summit. “We have pledged to take necessary political steps for our companies to stay in Iran,” he told reporters. But with French oil company Total saying it will up sticks if the US does not grant it a waiver and the world’s largest container shipping firm Moller-Maersk saying it would quit the country, Macron and German Chancellor Angela Merkel appear to be fighting an uphill battle. Analysts said that the reach of the US financial system and the risk of losing business in the huge North American market made non-compliance impossible for many firms. The EU cannot compel or really protect the private sector, Bjarne Schieldrop, an oil analyst at Scandinavian broker SEB, told the Financial Times. He said that this would undermine European efforts to keep the nuclear deal alive. “Total’s action . . . backs up the idea that no one sees an easy solution here and that there is little expectation of US leniency. Whatever the politicians in Europe are saying, the private companies are just pulling out and folding the cards,” he said. On Wednesday, French energy giant Total said it would withdraw from an Iranian gas deal before the end of the year unless it gets a waiver. In a statement, Total said: “We will not continue the SP11 (South Pars 11) gas project and will have to unwind all related operations before Nov. 4, 2018, unless Total is granted a specific project waiver by US authorities with the support of the French and European authorities.” The SP11 agreement was signed last July, making Total the first major Western energy company to invest in iran since sanctions were lifted in 2016. Now, though, Total is worried that it would be sanctioned by the US authorities if it kept dealing with Iran. The potential penalties from Washington simply look unpalatable. British Prime Minister Theresa May agreed with the leaders of Germany and France on Thursday to uphold the Iran nuclear deal after meeting on the sidelines of the EU summit in Bulgaria, Reuters reported. “The leaders reiterated their firm commitment to ensuring the deal is upheld, stressing that it is important for our shared security,” a spokeswoman for May said. “They pledged to work with the many parties to the deal to this end … and stressed that Iran must continue to meet its own obligations under the deal,” she added. Maersk CEO Soren Skou said: “With the sanctions the Americans are to impose, you can’t do business in Iran if you also have business in the US, and we have that on a large scale.” “I don’t know the exact timing details, but I am certain that we’re also going to shut down (in Iran),” Skou told Reuters in an interview following Maersk’s first-quarter earnings. EU powers to ban banks in the bloc from complying with US sanctions on Iran would be of “limited” use given the global reach of finance, said EU financial services chief Valdis Dombrovskis. “Indeed the EU blocking regulation could be of limited effectiveness there, given the international nature of the banking system and especially the exposure of large systemic banks to US financial system and US dollar transactions,” Dombrovskis told the European Parliament. Bloomberg reported that Iran planned to sign a $1.16 billion agreement with the UK’s Pergas Resources International to work on a southern oil field. Pergas and state-run National Iranian South Oil Co. will sign a “heads of agreement” to develop the Karanj oil field in Khuzestan province, the National Iranian Oil Co. said. Pergas Resources would provide oil field services. No US money or companies were involved, said Pergas CEO Clint Elgar.