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US Cites Progress in Curbing Iranian Oil Business


The energy giant Total headquarters in the business district of La Defense, West of Paris, France (file photo)

The energy giant Total headquarters in the business district of La Defense, West of Paris, France (file photo)

The State Department said Thursday four major European oil companies have promised to halt dealings with Iran, and will be spared from U.S. sanctions. A Swiss-based subsidiary of Iran's national oil company will face sanctions.

The Iran sanctions announcement was the second from the State Department in two days, and reflects a stepped-up U.S. effort to try to prod Iran back to nuclear talks with economic pressure.

Deputy Secretary of State James Steinberg told reporters that the United States has gotten commitments from four European oil companies to terminate investments and avoid any new activities in Iran's energy sector.

He said the four companies, Total of France, Statoil of Norway, ENI of Italy, and Royal Dutch Shell of Britain, would thus be spared from far-reaching financial penalties - authorized by the U.S. Congress in June - against companies operating in the United States that do business with Iran.

At the same time, Steinberg said the Obama administration will impose sanctions against the Naftiran Inter-trade Company, or NICO, a Swiss-based subsidiary of Iran's state oil company.

State Department officials acknowledged that the sanctions, barring U.S. business dealings with the company and freezing any U.S. assets it may have, will have little or no practical impact on NICO.

However, Steinberg said the blacklisting will discourage others from doing business with the firm. He said the growing web of U.N. Security Council and other nuclear-related sanctions against Iran is having an impact, despite denials from Iranian officials.

"What we most care about is how Iran responds to this in terms of its preparedness to engage in negotiations," said Steinberg. "Our goal, as I said, is not sanctions for sanctions sake, but to make clear to Iran that there are costs for the path they are pursuing. But I think we have pretty good indications that - not just in the energy sector but across-the-board - that whether it's in the financial sector, whether it's in shipping or transportation - that these measures are increasingly having a significant impact on Iran."

Steinberg said the administration is conducting investigations of other foreign firms that have not yet pledged to stop doing business in Iran.

He also said the United States is urging other countries to bar their oil companies from stepping in and replacing the European firms that have promised to sever Iranian ties.

On Wednesday, the Obama administration announced targeted sanctions against eight Iranian political figures including the country's Revolutionary Guards Corps commander, for political repression in the aftermath of disputed elections last year.

The travel and financial penalties, recently authorized by an act of Congress, are the first imposed by the United States for human rights abuses.

Steinberg said he discussed Iran's "destabilizing activities" in the Middle East, including threats against Israel, in a meeting earlier Thursday with Syrian Deputy Foreign Minister Fayssal Mekdad.

U.S. contacts with Syria have increased in recent weeks, including a Damascus visit by U.S. Middle East envoy George Mitchell and a New York meeting last Friday between Secretary of State Hillary Clinton and Syrian Foreign Minister Walid Muallem.

Steinberg said improvement in the strained U.S.-Syrian relationship requires, among other things, Syria taking a stand against what he termed "unacceptable" behavior by its Iranian ally.

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