The best policy for the oil companies is to find a way to swap debts related to Iran, U.S. Northeastern University Professor Kamran Dadkhah told Trend.
Professor was commenting on how giant oil companies Shell and Eni could settle their debts related to Iran. He noted that both Shell and Eni have to maintain the best relationships with the Iranian government.
Royal Dutch Shell is struggling to pay off $1 billion that it owes Iran for crude oil because European Union and U.S. financial sanctions now make it almost impossible to process payments. With daily contract volumes of 100,000 barrels, Shell ranked as Iran's second biggest corporate client - along with France's Total - behind Turkey's Tupras.
Meanwhile, Eni, Italy's biggest oil and gas group, is still owed over $1 billion worth of oil by Iran and has a special exemption enabling it to continue receiving that crude despite an EU embargo on Iranian oil.
"The disagreement and quarrel is between the Iranian government on one side and the United States and European governments on the other," Dadkhah said. "The oil companies are caught in the middle. Iran has vast resources of oil and gas and oil companies need to keep good relationships with such a source".
He noted that best policy for both Shell and Eni is to try swapping the debts, for instance if Shell pays Eni, or if the oil giants are able to find third parties that could transfer the money.
"The companies can argue with Western governments that past debts cannot be subject to sanctions," Dadkhah noted. "In short, what is important for oil companies is to stay away from the dispute and keep good relations with both sides".
American Enterprise Institute Research Fellow Ali Alfoneh believes that Shell and Eni will be asking their respective governments to be exempted from financial restriction imposed on economic transactions with Iran.
Alfoneh underscored that this would in turn test the commitment of the European Union's to the sanctions regime they themselves have imposed on Iran.
"Oil and Gas companies such as Shell and Eni desire to preserve a healthy working relationship with the Islamic Republic in an attempt to prepare themselves for a post sanctions era," Alfoneh said.
"However, they have a much greater desire to continue a healthy working relationship with the United States and the European Union".
- TURKEYCHP leader urges gov’t not to turn post-coup probe into ‘witch hunt’
- TURKEYUS offered to help on Gülen’s extradition, Turkish FM confirms
- EUROPENo isolationist path for Britain, Johnson insists
- TURKEYSyrian fighters seize half of Manbij from Islamic State
- TURKEYFlights as usual after failed coup attempt, Turkish Airlines chairman says
Most Viewed News