As the US ratchets up the rhetoric over Iran’s nuclear ambitions, the number of companies severing their ties with the Islamic republic is growing. Russia’s Lukoil and Malayasia’s Petronas are the latest to join the list of energy firms suspending gasoline sales to Iran.
Despite being dependent on imports for almost half of its gasoline needs, Tehran continues to assert that US and UN sanctions have forced it to become more self-reliant. This could be put down to bluster, but along with reducing domestic gasoline consumption, Tehran can for now rely on its relationships with state-owned energy companies in Asia, who have proved far less susceptible to US pressure. Iran is an enormous market, consuming some 70 million litres a day of gasoline, which traders will always be keen to tap into.
As Chinese companies continue to invest in Iran, Western oil firms will be tempted to maintain some sort of presence in the country.
However, more important is the country’s status as a potential natural gas supplier. Exports have so far been restricted to its direct neighbours, but as access to gas around the world becomes tougher, it will become more difficult to ignore Iran.
Iran’s ability to import gasoline from the world market shows the serious flaws of the US sanctions. But, while the country can meet its domestic needs, it will find it tough to move ahead with its ambitious gas production plans without more international support.