Atul Aneja

Move’s impact only if Russia, China are on board

DUBAI: A top Iranian oil official has described as irrelevant the bill passed on Tuesday by the U.S. House of Representatives that seeks to impose sanctions on global companies selling refined petroleum to Iran.

“We can receive the amount of gasoline we need,” Hojjatollah Ghanimifard, a top official at the National Iranian Oil Company (NIOC) was quoted as saying by Reuters news agency.

“We do not even bother about these kind of sanctions,” he observed. In a parallel show of defiance, Iran fired a two-stage solid fuelled missile, Sejl-2, which Iranian Defence Minister Ahmad Vahidi said would be used “to defend peace, security and stability both in Iran and in the entire region.”

The House bill aims to impose sanctions on those foreign companies which export refined petroleum to Iran, or help Iran with its own domestic refining capacity. The sanctioned companies will be deprived of services and access to the U.S. market.

Iran is the world’s fifth largest producer of crude, but because of a shortfall in its domestic refining capacity, it meets nearly 40 per cent of its demand for petrol and 11 per cent of its requirement of diesel through imports.

The bill, once it becomes law, will affect some of Iran’s existing gasoline suppliers which include European firms Vitol, Trafigura, Total, British Petroleum and India’s Reliance Industries.

However, some analysts are of the view the U.S. legislation, that is still to be passed by the Senate, will have little impact on Iran, unless Russia and China are also on board.

Both Moscow and Beijing have so far been wary about the imposition of additional sanctions on Iran, and have a strong economic relationship with Tehran.

The bill, the Iran Refined Petroleum Sanctions Act will, nevertheless, add more teeth to the existing Iran Sanctions Act that prohibits annual investments of more than $20 million in Iran’s oil and natural gas development.

It will also cover companies that provide services such as shipping, brokering, financing and underwriting.

Under the bills provision, the U.S. President will apprise the Congress every six months about companies that have violated the law.

The Obama administration will continue to have the authority to waive violations but the biannual reporting to Congress is expected to keep sanctions in focus, say analysts. The legislation has been moved in the context of moves to impose international sanctions against Iran, apparently to dissuade Tehran from pursuing a suspected nuclear weapons programme. Iran has consistently denied that is developing atomic weapons.

Israel, which has been campaigning for firmer action against Iran, welcomed Tuesday’s development. Israeli Ambassador to Washington Michael Oren said: “The State of Israel deeply appreciates the unflagging commitment of President Obama and the U.S. Congress to prevent Iran from acquiring the military nuclear capability threatening world peace.”