Italian oil group Edison International has withdrawn from Iran’s oil and gas sector amid tightening US economic sanctions against the Islamic Republic, according to the US State Department.

The company, which has a $107m contract to explore the Dayyer offshore gas field, has pledged not to engage in any activities subject to US sanctions.

The US has applied a special ruling under the Iran Sanctions Act (ISA). “This means that, as long as the company continues to act in accordance with its assurances, under the law, it will not be subject to an investigation into past Iran-based activities,” this State Department said.

Edison is the sixth company to withdraw from its investment, following France’s Total, UK/Dutch Shell, Norway’s Statoil, Italian group Eni and Japan-based Inpex.

“These companies have recognised the risks of doing business in Iran’s energy sector given Iran’s proliferation activities, support for terror networks around the world, and other destabilising actions,” the State Department continued.

Sanctions led by the US and EU as well as a chronic lack of investment are expected to cripple Iran’s oil sector

The US-based Energy Information Administration (EIA) forecast Iranian crude production to drop 850,000 barrels a day (b/d) to 2.7 million b/d by the end of the year, not including the potential effect of the latest round of sanctions.

On 1 July, the EU placed an embargo on insuring tankers carrying Iranian oil. The Tehran government says it has reached agreements with some European refiners to export 20 per cent of its oil through a private consortium.