Europe are now refusing to service Iran Air, which may soon have to fly half empty in order to carry enough fuel to make it both to Europe and back to Iran.
According to The Washington Post, only two companies are still providing Iran Air with fuel in Europe—Total of France and OMV of Austria—and they may end service when their current supply contracts expire.
The Islamic Republic confirmed the service cutback Tuesday and threatened action—not further described—in retaliation.
The Washington Post report, published Sunday, attributed the refusal to supply fuel to US government pressures on the firms. But it wasn’t clear if that was really the cause or if the oil firms were acting on their own for fear of angering Americans.
The first company to refuse to supply Iran Air was BP, which severed all service to Iran several weeks ago on its own initiative. While BP has been silent on its decision, it is widely believed that BP acted for fear of further alienating the American public, which was already furious with BP over the oil spill in the Gulf of Mexico.
Most importantly, there is no legal ban on jet fuel sales to Iran. Under the US sanctions passed by Congress in June, jet fuel sales of as much as $5 million a year are permitted. That exemption indicates that the congressmen who wrote the new sanctions law thought about crippling Iran’s international flights and then decided specifically not to do so. Iran Air in Amsterdam said it purchased far below the $5 million limit.
Sanctions by the European Union cite the civilian operations of Iran Air as being allowed, and do not call for restrictions against the airline.
The Post linked the cutoff in jet fuel supplies to a September 30 announcement by the State Department in which it said Total of France, Statoil of Norway, Eni of Italy and Royal Dutch Shell of Britain and the Netherlands had all agreed to phase out their investments in Iran. No mention was made in that announcement about jet fuel supplies, however, and Total is one of only two firms still selling Iran Air jet fuel.
Furthermore, Q8Aviation, one of the world’s largest jet fuel suppliers, has also ended all sales to Iran Air. It was not part of the State Department’s September 30 announcement. Q8Aviation is a subsidiary of the Kuwait Petroleum Corp., which is owned by the government of Kuwait. And Royal Dutch Shell, which was part of the State Department’s September 30 announcement, actually declined to renew its contract with Iran Air back in July, Reuters reported.
In sum, contrary to the Post report, the State Department action of September 30 didn’t seem to have anything to do with Iran Air’s fuel problem.
In Tehran Tuesday, Foreign Ministry spokesman Ramin Mehman-Parast confirmed the cutoff of fuel supplies by foreign firms. “We advise their governments that this … is against the illegal UN Security Council resolution and, under international law, it is an unlawful act.” He did not cite what international law requires jet fuel companies to sell to Iran.
“We will definitely not tolerate such inappropriate actions by some companies and measures to confront such actions are on our agenda,” he said, without hinting at what actions Iran might take—or even could take.
Prior to Tuesday, Iran had dismissed reports that Iran Air was having refueling problems as “psychological warfare.”
The Washington Post said, “The fueling problem follows a new push by the Obama Administration to move beyond the strict letter of sanctions it imposed to a broader attempt to discourage international businesses from dealing with Iran.
“It also illustrates a shift away from an earlier US policy of reaching out to the Iranian people and trying to target mostly state organizations central to Iran’s nuclear program. Officials now admit that the increased pressure is hurting ordinary Iranians but say they should blame their leaders for the Islamic republic’s increasing isolation.”
While Washington has long talked about “targeting” sanctions at Iran’s missile and nuclear programs rather than the public, that has always been more public relations rhetoric than substance. The banking sanctions that Washington has pursued aggressively for five years and which are really the meat of sanctions strike at Iran’s economy in general, not at just the missile and nuclear programs. The banking sanctions inhibit all trade and thereby impact the import of Barbie dolls and chocolate bars as well as missile components.
Furthermore, the new sanctions legislation that Congress enacted in June stopped all imports of Persian carpets as of September 29. Prior to that Iran sold about 15 percent of its carpet output in the United States. The carpet industry is estimated to employ about 2 million Iranian weavers, so the US ban on imports will hit the livelihood of many villagers who have nothing to do with uranium enrichment
The Post acknowledged that oil companies that were not part of the September agreement with the State Department had abruptly halted jet fuel sales to Iran Air and said that “appears to indicate a ripple effect across the industry,” rather than some US government pressure.
But the US government has been open that it has been hoping for a ripple effect. “The goal here is … to end companies from doing business within Iran,” Deputy Secretary of State James B. Steinberg said when he announced the September deal. He added that he hoped others would “see that this is what responsible companies are doing and that they should follow in those footsteps.” In fact, the banking sanctions are grounded largely on the impact of embarrassment. The US Treasury tells banks around the world they could be professionally embarrassed if any deals they make with Iran turn out to be a cover helping Iran’s nuclear and missile programs.
As a result of the canceled jet fuel contracts, all Iran Air planes departing from destinations such as Amsterdam, London and Stockholm are now forced to make fuel stops in either Cologne, Germany, or Vienna, Austria, where Total of France and OMV of Austria are still providing the airline with jet fuel until their contracts run out, possibly as soon as next month. At that point, Iran Air could be forced to cancel or severely reduce flights, the Post said..
The newspaper reported that during such a stop in Vienna last Sunday, several passengers complained. “What do we have to do with our government?” an Iranian man asked loudly. “We are becoming prisoners because of these disagreements between Iran and America.’’
Iran Air, the state airline, is the main link for Iranians with the outside world. Nearly 500,000 passengers a year fly between Tehran and 11 European cities, Iran Air said. It said the refueling stopover would add about 90 minutes to the normal flight times from Europe.
“We will continue to fly to Europe, if needed even with half occupancy to save fuel which we can bring from Tehran,” said Mohammad Jalali, the Amsterdam-based district manager for Iran Air. “But we are losing time, money and passengers,” he said.
State Department spokesman P.J. Crowley said Friday that the administration was “directing our efforts at entities that we think support the government and its policies,” but acknowledged that “there are ripple effects and that there are impacts that go beyond that.”
“We want to see the Iranian people have the same opportunities to travel, to engage, as others in the region and around the world have,” Crowley said. “And the only thing that’s impeding Iran from having that kind of relationship with the United States and the rest of the world is the government and policies of Iran.”
After its delivery contract with Q8Aviation was suddenly terminated, Iran Air said it approached all other possible sellers without success. “None of the oil companies are telling us why they have broken their contracts. We have agreements to operate from European countries; we are entitled to our fuel,” Jalali told the Post.
Representatives of major oil firms told the Post jet fuel sales to Iran Air are good business but too dangerous to pursue given the threat of sanctions by the United States—even though sales of jet fuel up to $5 million are specifically exempted form US sanctions.
The Austrian oil company OMV, which is still delivering jet fuel to Iran Air planes in Vienna, said its contract with Iran Air is “in line with all regulations by the EU and the United Nations.” A person authorized to speak for the company said that commitments would be honored “for the time being.” A representative of Total of France, which is supplying Iran Air in Cologne said it was not able to respond to questions currently. Total is one of the companies that agreed with the United States to end all investments in Iran.
Iran Air said it is planning to take its case to the International Court of Justice in The Hague. But only governments, not corporations, can file suits in that court. “Traveling is a human right, airline conventions are broken and neither the European Union, US or United Nations sanctions are calling for these restrictions against us,” Jalali said. “This is a low-level war between Iran and the US, but I don’t want our passengers to be in the middle.”
