.
.
.
.

OPINION: Why European companies are fleeing Iran after US deal withdrawal

Abdulrahman al-Rashed

Published: Updated:

US Secretary of State Mike Pompeo’s statement on Monday put an end to bargains. Officially, Washington has begun its war on the Iranian regime. The weapons of economic sanctions threaten the entire regime and do not only restrain it.

The French Total left the gas fields in the Gulf and moved on. Head of the Italian company ENI told the company’s board that they shut down their offices in Tehran and stopped searching for oil and gas. Airbus signed a contract to sell Iran 100 airplanes and only three jets arrived in Tehran’s airport as part of this historic deal which the company announced its cancellation. A Norwegian solar energy company left Iran last week and there are four years left on the contract. Other big companies also fled Iran like the German Siemens, the Italian Danieli company which supplies equipment to the metal industry and Maersk Line, a container shipping company. Dozens of European companies rejected the Iranian temptations to stay in Iran out of fear of the Trump administration which warned that whoever does not stop dealing with Iran during the next 180 days will be prohibited from dealing with the American market.

Why do European and giant companies feel afraid? It’s simply because they have greater interests with the US, and as for those who do not care about the American market, prohibiting Iran from dealing with the dollar will subject them to bankruptcy.

A new reality for Tehran

The attempts of European governments, which promised they will continue to deal with Iran on the economic front as part of their commitment to the JCPOA agreement, to protect their companies’ contracts failed. Almost all big companies which made deals with Iran are withdrawing quickly despite the possible losses they may suffer.

Total’s contract, which is very important for the Iranian oil and gas industry and which Tehran has greatly relied on, is proof that Europe’s politicians do not dictate their decisions on their companies and will not be able to stand in Washington’s face. Tehran, of course, will also completely fail in the confrontation against the US.

Why do European and giant companies feel afraid? It’s simply because they have greater interests with the US.

Abdulrahman al-Rashed

The French company was among the first of those to benefit from the Iranian nuclear signed with the West in 2015. It got the deal to develop phase 11 of the South Pars gas field for around $5 billion. A top executive at the company said at the time that they do not need US’ approval to proceed with the deal. After Trump warned in November of dealing with Iran, the French company retreated and closed its offices in Tehran and opened an office in Washington to coordinate with American authorities. It has finally announced its withdrawal from Iran.

What’s Washington’s power and authority over European companies? The US market is worth $19 trillion and trade with the Europeans is worth $700 billion. Therefore, Iran’s deals seem worth so little compared to this.

In addition to all that, the US control authorities’ sanctions are painful as they fined the French BNP bank a penalty worth $9 billion for dealing with Iran!

Therefore, the French and German governments’ attempts to defy the Trump administration and insistence to keep the nuclear deal are almost impossible for two reasons: Trump will not bend and the Iranian supreme guide will not alter his policies and stop his wars. Iran will realize that Europe’s politicians want the agreement but they willnot be able to pay it the required price as Europe’s companies’ hands are tied.

Therefore, the truth which Iran’s leaders must realize is that the deal died the minute Barack Obama left the White House and Trump took over. Instead of dealing with the new reality and reviewing its wrong calculations, Tehran is running in all direction to Brussels, Moscow, Beijing and New Delhi but it has not succeeded in compensating for its losses or attaining alternatives. It’s militarily failing in Syria and it’s politically failing in Iraq. It’s also suffering losses in Yemen and losses are even greater inside Iran itself.

This article is also available in Arabic.

____________

Abdulrahman al-Rashed is the former General Manager of Al Arabiya News Channel. A veteran and internationally acclaimed journalist, he is a former editor-in-chief of the London-based leading Arab daily Asharq al-Awsat, where he still regularly writes a political column. He has also served as the editor of Asharq al-Awsat’s sister publication, al-Majalla. Throughout his career, Rashed has interviewed several world leaders, with his articles garnering worldwide recognition, and he has successfully led Al Arabiya to the highly regarded, thriving and influential position it is in today. He tweets @aalrashed

Disclaimer: Views expressed by writers in this section are their own and do not reflect Al Arabiya English's point-of-view.