News / USA

US Says Iran Oil, Energy Investment Sanctions Still in Force

FILE - Malta-flagged Iranian crude oil supertanker "Delvar" is seen anchored off Singapore, March 1, 2012.
FILE - Malta-flagged Iranian crude oil supertanker "Delvar" is seen anchored off Singapore, March 1, 2012.
Reuters
The nuclear deal signed on Sunday will not allow any more Iranian oil into the market, or let western energy investors into the country, but it does freeze U.S. plans for deeper cuts to Iranian crude exports, Washington says.

Iran and six world powers reached a breakthrough deal early on Sunday to curb Tehran's nuclear program in exchange for limited sanctions relief.

But U.S. and EU sanctions on Iran's energy sector, which have prevented western energy companies from dealing with Tehran, and slashed its oil exports from 2.5 million barrels per day (bpd) to around 1 million bpd, will remain in place.

“In the next six months, Iran's crude oil sales cannot increase,” a fact sheet posted by the White House on the U.S. State Department's website on Sunday said.

“Under this first step, the EU crude oil ban will remain in effect and Iran will be held to approximately 1 million bpd in sales, resulting in continuing lost sales worth an additional $4 billion per month, every month, going forward.”

Western pressure on Iran's mainly Asian oil customers to find other suppliers has supported global oil prices over the last two years. Rising U.S. and Saudi production has helped dampen the impact of around 1.5 million barrels per day of Iranian oil being shut out.

U.S. lawmakers had planned further cuts in Iran's oil exports but Washington has pledged not to impose new nuclear-related sanctions over the next six months, so long as Iran sticks to its side of the deal.

Less crude from Iran would increase pressure on regional rival Saudi Arabia to squeeze more out of oilfields that have already been pumping at record levels this year.

Benchmark Brent crude hit a six-week high of $111.40 on Friday on early uncertainty over whether an agreement over Iran's nuclear program would be reached.

Brent eased late on Friday on renewed hopes that the long-awaited deal would be struck, closing the week on $111.05 a barrel. Oil markets are closed on Sunday.

Little relief

The White House estimates that Iran has lost more than $80 billion since the beginning of 2012 because of lost oil sales. It also estimates Tehran's earnings over the next six months will be $30 billion down compared with a six-month period of 2011, before sanctions were imposed.

U.S. sanctions effectively bar Iran from repatriating earnings from oil exports, forcing customers to pay into a bank in their country.

Washington estimates that Iran has around $100 billion in foreign exchange earnings trapped in such accounts.

Under the terms of the deal, Iran will be allowed access to $4.2 billion of oil export revenues. But nearly $15 billion will still flow into accounts overseas over the next six months, according to the U.S. government.

“We expect the balance of Iran's money in restricted accounts overseas will actually increase, not decrease, under the terms of this deal,” the White House fact sheet said.

The U.S. government has also suspended some restrictions on gold and precious metals trade and lifted sanctions on Iran's petrochemical exports that were imposed earlier this year.

Other energy sanctions

Iran is home to some of the world's largest oil and gas reserves but U.S. energy firms have been barred by Washington from Iran for nearly two decades.

Several European oil and gas companies had planned multi-billion dollar investments over the last decade to help develop Iranian reserves.

However, U.S. pressure drove European energy companies away from Iran in the late 2000s, for fear of jeopardizing their interests in the U.S. market if they stayed.

Western companies, whose technology Tehran needs to fully exploit its oil and gas riches, are keen to go back into Iran when sanctions are lifted.

Despite the landmark deal struck on Sunday, U.S. restrictions on trade, including those banning long-term investment or provision of technical services to Iran's energy sector, are still in place.

Sanctions preventing the sale of petroleum products to Iran, which needs to import such fuels because it lacks refining capacity, also remain in effect.

Potential buyers of Iranian crude have found it difficult to insure their multi-million dollar shipments, because of wide-ranging restrictions on providing financial services for Iranian trade.

The White House fact sheet says that financial sector sanctions remain intact, along with those affecting Iranian shipping companies.

However, a senior western official said on Sunday that relief on EU sanctions on oil shipping insurance was included in the deal.

The EU could relax insurance restrictions without causing a rebound in Iranian oil exports by only allowing customers to insure their current volume of oil purchases and no more. It is unclear how the EU would police this.

You May Like

Hostage Crisis Could Divide Japan Over Plans to Boost Military

Japanese Chief Cabinet Secretary Yoshihide Suga said Monday the government is working closely with the Jordanian government to secure the release of remaining Japanese hostage Kenji Goto More

Video Brussels Shaken as New Greek Leader Challenges Europe’s Austerity Drive

Country's youngest ever PM Alexis Tsipras, 40, sworn in Monday and says he will restore dignity to Greece by ending spending cuts More

Multimedia National Geographic Photo Camps Empower Youth

Annual mentoring program's mission is to give young people a voice to tell their own stories through photography More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Obama Urges Closer Economic Ties During Historic India Visiti
X
Aru Pande
January 26, 2015 9:33 PM
U.S. President Barack Obama says the United States and India must do better to capitalize on untapped potential in their economic relationship - by removing some of the roadblocks to greater trade and investment. As VOA correspondent Aru Pande reports from New Delhi, Obama spoke after participating in India’s Republic Day celebration.
Video

Video Obama Urges Closer Economic Ties During Historic India Visit

U.S. President Barack Obama says the United States and India must do better to capitalize on untapped potential in their economic relationship - by removing some of the roadblocks to greater trade and investment. As VOA correspondent Aru Pande reports from New Delhi, Obama spoke after participating in India’s Republic Day celebration.
Video

Video US, EU Threaten New Russia Sanctions Over Ukraine

U.S. President Barack Obama has blamed Russia for an attack by Ukrainian separatists that left dozens dead in the port of Mariupol and cast further doubt on the viability of last year’s cease-fire with the Kyiv government. VOA’s Michael Bowman reports from Washington.
Video

Video White House Grapples With Yemen Counterterrorism Strategy

Reports say the U.S. has carried out a drone strike on suspected militants in Yemen, the first after President Barack Obama offered reassurances the U.S. is continuing its counterterrorism operations in the country. The future of those operations has been in question following the collapse last week of Yemen’s government. VOA White House correspondent Luis Ramirez reports.
Video

Video Kerry Warns Against Violence in Nigeria Election

US Secretary of State John Kerry visited Nigeria Sunday in a show of the level of concern within the U.S. and the international community over next month’s presidential election. Chris Stein reports.
Video

Video Zoo Animals Show Their Artistic Sides

The pursuit of happiness is so important, America's founding fathers put it in the Declaration of Independence. Any zookeeper will tell you animals need enrichment, just like humans do. So painting, and even music, are part of the Smithsonian National Zoo's program to keep the animals happy. VOA’s June Soh met some animal artists at the zoo in Washington. Faith Lapidus narrates.
Video

Video Worldwide Photo Workshops Empower Youth

Last September, 20 young adults from South Sudan took part in a National Geographic Photo Camp. They are among hundreds of students from around the world who have learned how to use a camera to tell the stories of the people in their communities through the powerful medium of photography. Three camp participants talked about their experiences recently on a visit to Washington. VOA’s Julie Taboh reports.
Video

Video Saudi, Yemen Developments Are Sudden Complications for Obama

The death of Saudi Arabia's King Abdullah and the collapse of Yemen’s government have cast further uncertainty on U.S. efforts to fight militants in the Middle East and also contain Iran’s influence in the region. VOA White House correspondent Luis Ramirez reports on the new complications facing the Obama administration and its Middle East policy.
Video

Video Progress, Some Areas of Disagreement in Cuba Talks

U.S. and Cuban officials are reporting progress from initial talks in Havana on re-establishing diplomatic ties. U.S. Assistant Secretary of State (for Western Hemisphere Affairs) Roberta Jacobson said while there was agreement on a broad range of issues, there also are some “profound disagreements” between Washington and Havana. VOA State Department correspondent Pam Dockins has the story.
Video

Video US, Japan Offer Lessons as Eurozone Launches Huge Stimulus

The Euro currency has fallen sharply after the European Central Bank announced a bigger-than-expected $67 billion-a-month quantitative easing program Thursday - commonly seen as a form of printing new money. Henry Ridgwell reports for VOA from London on whether the move might rescue the eurozone economy -- and what lessons have been learned from similar programs around the world.
Video

Video Nigerian Elections Pose Concern of Potential Conflict in 'Middle Belt'

Nigeria’s north-central state of Kaduna has long been the site of fighting between Muslims and Christians as well as between people of different ethnic groups. As the February elections approach, community and religious leaders are making plans they hope will keep the streets calm after results are announced. Chris Stein reports from the state capital, Kaduna.
Video

Video As Viewership Drops, Obama Puts His Message on YouTube

Ratings reports show President Obama’s State of the Union address this week drew the lowest number of viewers for this annual speech in 15 years. White House officials anticipated this, and the president has decided to take a non-traditional approach to getting his message out. VOA White House correspondent Luis Ramirez reports.
Video

Video S. Korean Businesses Want to End Trade Restrictions With North

Business leaders in South Korea are calling for President Park Geun-hye to ease trade restrictions with North Korea that were put in place in 2010 after the sinking of a South Korean warship.Pro-business groups argue that expanding trade and investment is not only good for business, it is also good for long-term regional peace and security. VOA’s Brian Padden reports.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid