Europe pledged to keep afloat its efforts to aid Iran after the U.S. tightened the screw by targeting all exports of Iranian oil for sanctions.

The French government and the European Union both said they will abide by the terms of the Iran nuclear accord with world powers even after the latest U.S. move. France and its European partners intend to continue efforts to ensure that Iran derives economic benefits as long as Tehran complies with its nuclear obligations, the Foreign Ministry in Paris said.

U.S. Secretary of State Michael Pompeo said Monday that the U.S. wouldn’t renew waivers granted to eight countries including South Korea, Japan and Turkey that allowed them to buy Iranian oil without facing sanctions. The non-renewal of waivers that were due to expire on May 2 roiled energy markets and risks upsetting major importers including China and India.

Europe’s insistence on standing by the Iran nuclear deal, known as the JCPOA, risks further inflaming tensions with the Trump administration as it seeks to force Tehran to renegotiate the terms of the accord to include Iran’s non-nuclear ballistic missiles and influence in the wider Middle East.

“We regret yesterday’s announcement by the U.S. not to renew oil waivers,” European Commission spokeswoman Maja Kocijancic told reporters in Brussels. “This further risks undermining the implementation of the JCPOA, which is a key element of the global nuclear non-proliferation architecture that was endorsed unanimously by the UN security council.”

Trade Spillover

European leaders such as French President Emmanuel Macron and German Chancellor Angela Merkel may have concerns at potential fallout for EU-U.S. trade talks aimed at averting more tit-for-tat tariffs, since President Donald Trump has previously shown willingness to conflate disparate policy matters in a bid to achieve his goals.

Germany, France and the U.K. have already created a special purpose vehicle for trade with Iran designed to get around U.S. sanctions. Work on the INSTEX mechanism to facilitate financial transactions for European companies trading with Iran is “progressing positively with a view to a near completion,” the French ministry said.

Iran should continue work on its mirror mechanism, the ministry said. Exchanges between the two sides are underway to ensure that both structures “operate in a manner consistent with international financial standards,” it said.

France said it is “determined” to persevere with the nuclear deal, while Kocijancic at the commission said the EU will abide by the accord “as long as Iran continues with the full and effective implementation of its nuclear-related commitments.”

Source » bloomberg

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