Congress is pressuring private companies to cease doing business with Iran, but the effort has encountered the same problems US sanctions have ran into for 30 years — reluctance in the European Union to play ball and a bevy of shady, Middle Eastern front companies that can maneuver around any prohibitions.
Both chambers of Congress have passed bills that would sanction companies supplying gasoline to Iran, as well as the insurance and shipping companies that support such trade, in an effort to deter the Islamic republic from developing the bomb.
The US would like to stop sending Iran 130,000 barrels a day of gasoline that the oil-rich nation imports because it can’t refine the stuff.
Several companies including Caterpillar, Huntsman and Siemens have announced they will stop doing business with Iran.
But Catherine Margaret Ashton, the EU’s representative for foreign affairs and security policy, has written to Secretary of State Hillary Rodham Clinton opposing the congressional sanctions.
Those bills “envisage the extraterritorial application of US legislation and would be contrary to the EU-US understanding of 1998, under which it was agreed that such sanctions would not be applied to the EU in the light of the EU’s commitment to work with the US to counter the threat that Iran poses to international security,” she wrote.
Meanwhile, oil industry sources told the Washington Post that that Iranian front companies are securing gasoline from the United Arab Emirates, and that companies based in Iraq were doing the same thing.
In Iran, gasoline is heavily subsidized, costing drivers just 38 cents per gallon, although the government has cut quotas recently, and seems to be stockpiling gasoline. Best guesses put the nation’s gasoline supply on hand at about 1 month’s worth.