The US withdrawal from Iran’s nuclear deal and the re-imposition of economic sanctions on Tehran have hurt many European companies that were quick to operate in Iran. How much damage and what are the parameters of Trump’s policy towards Tehran?
Following are the most important European sectors operating in Iran, which will be affected by US economic sanctions. As soon as the new US sanctions against Iran were announced in mid-May, the reaction of the two major French automakers, Renault and PSI, was somewhat different. Knowing that these two groups believe in half of the new cars registered in Iran.
The PSI Group announced in early June that it was preparing to suspend its activities in Iran, which is the largest foreign market in terms of the number of cars, but at the same time reduced the repercussions of the withdrawal when it made clear that its activity in Iran “less than 1 % Of turnover.”
For its part, Renault said it did not want to abandon its activities in Iran, even if it was forced to “significantly reduce its activity,” but at the same time did not want to jeopardize the group’s interests. Renault announced on July 16 that its sales in Iran in the first half of this year fell 10.3 percent to 61,354.
Though very contentious, German car production groups will certainly be affected by these sanctions. In 2016 Daimler signed an agreement with two Iranian groups to produce and sell Mercedes-Benz trucks. Volkswagen announced in 2017 its desire to sell its cars in Iran again after a 17-year hiatus. But Volkswagen, which is firmly in the US market, is likely to be forced to abandon its activities in Iran.
Contracts for the purchase of aircraft are one of the largest contracts signed by Iran after the nuclear agreement in 2015, and aim to modernize its commercial air fleet, which is very old. Airbus received orders from Iranian companies to buy 100 aircraft. Only three of them have been delivered so far, and they have US permits because the company is using parts manufactured in the United States in its aircraft. However, the loss of the Iranian market will not have a significant impact on Airbus’ activity, because it has orders to purchase 7168 aircraft worldwide by June 30.
After the 2015 agreement, French oil and gas group Total joined the Chinese group CNBC to invest $ 5 billion in the exploitation of the South Pars gas field in the Gulf. Since Total has failed to obtain an exception from US sanctions, it is very likely to abandon the project. But Total will not suffer significant losses because it has invested only $ 100 million in this project. Iran has warned Total that its stake will be taken over by the Chinese state-owned CNBC if it withdraws. The Italian gas giant Eni is buying two million barrels of oil a month from Iran under a contract that expires later this year. The Italian group has yet to reveal its intentions for the future.
The Italian railway industry is likely to be affected by US sanctions against Iran. The Italian state-owned railway group Verovici delto Stato signed an agreement with Iran in July 2017 to build a high-speed rail link between the cities of Qom and Arak in northern Iran. It also signed several cooperation agreements between Iran and the shipbuilding group Vincantiari in 2016. Italy became the first European trading partner of Iran. Its exports to the country in 2017 increased by 12.5 percent to 1.7 billion euros.
If British Airways and German Lufthansa have resumed their flights to Tehran, they will be forced to stop the flights if they wish to work in the United States.
The hotel chain Accor Hotel, which opened two hotels at Tehran airport in 2015, could be subject to US sanctions, similar to the Rotana Hotels group if they continue to operate in Iran.
Melilla Hotels International, which signed an agreement with Iran in April 2016 to run a five-star luxury hotel, said the hotel was still under construction and would rather not comment on what it would do about “these political issues at this early stage “He said.
The Siemens group returned to work in Iran in March 2016 and joined the Iranian company Mabna for the manufacture of gas turbines and generators for power plants. In January, it signed a contract to sell 12 compressors to manufacturers of liquefied natural gas. A spokeswoman for the French industrial gas group Erelecid said it had “decided to stop any commercial activity” in Iran, adding that “there are no investments in Iran.”
A number of German banks, including Hellaba and Frankfurt-Zedbank, have announced their withdrawal from Iran after sanctions were imposed on Iran in mid-May.
On Tuesday, August 7, 2018, the United States will imposed a series of sanctions on Iran to strengthen its hardline approach to the Islamic Republic. The Iranians are anxiously awaiting the repercussions of the next phase of relations with the United States, and the latter’s long-term strategy fo