Russia's largest private oil major said it was suspending an oil project in Iran because of U.S. pressure.

The LUKoil company issued a statement on Wednesday saying it had stopped further work on the Anaran project “because of the economic sanctions imposed by the U.S. government.” It blamed the sanctions for a loss of some $63 million last year and said it feared more losses if it continued to carry on the project.

The Anaran field, with estimated oil reserves of 2 billion barrels, was operated by a consortium of Norwegian StatoilHydro (75 per cent) and LUKoil Overseas (25 per cent). LUKoil Overseas head Stanislav Kuzyev has clarified that his company retains its rights in the project and would be ready to return “under more favourable economic situation.”

LUKoil has 1,600 petrol filling stations in the U.S. and last year announced plans to build an oil refinery in the U.S. These investments would be vulnerable to tough sanctions the U.S. imposed on international energy companies operating in Iran.

The news of the LUKoil pullout came hours after a senior Russian diplomat said “clouds are gathering” over Tehran's reluctance to accept a United Nations offer to replace fuel for an atomic reactor.

“Iran's position leaves less and less room for diplomatic manoeuvre,” the diplomat told foreign media on condition of anonymity. The diplomat, however, said Russia would not support “paralysing sanctions” that could “punish 70 million Iranians”.

Late last year Russia's Gazpromneft, an oil subsidiary of the natural gas monopoly Gazprom, signed an agreement with the National Iranian Oil Company (NIOC) to jointly develop two oil fields in Iran. Gazprom also has an agreement with the NIOC to develop the South Pars gas field and build an oil refinery in Iran.

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