CBI Governor: Europe Required to Buy Iran’s Crude

Governor of the Central Bank of Iran (CBI) Abdolnasser Hemmati on Tuesday said that Europe is duty-bound to purchase Iranian crude to keep the nuclear deal alive, reminding that the European’s offered INSTEX mechanism requires financing that should happen through crude revenues.

Hemmati said today that Iran has met all the requirements for establishing a financial mechanism channel between Tehran and the bloc, and underlined that Europe is now required to either buy crude from his country or set up a financial channel to finance the mechanism and put it into operation.

Iran’s monetary chief made the remarks when reporters touched upon the EU-proposed Instrument in Support of Trade Exchanges (INSTEX) and asked him if Tehran is through with preparing the grounds for putting the INSTEX into effect.

He underscored that the Iranian channel, called Instrument for Finance and Trade between Iran and Europe (IFT), was the corresponding parallel instrument devised by Iran, highlighting that Tehran is fully ready to operationalize INSTEX.

He added that Europe has not done anything about the INSTEX since Iran announced its first phase of modification of undertakings under the nuclear deal, officially known as the Joint Comprehensive Plan of Action (JCPOA) on May 8.

In similar remarks earlier on Wednesday, Oil Minister Bijan Namdar Zanganeh also criticized the European states for their inaction to buy Iranian crude as part of the promises made by them to keep Iran under the nuclear deal after the US discarded the agreement and re-imposed sanctions on Tehran last year.

“The Europeans do not cooperate to purchase oil,” Namdar Zanganeh underlined.

Elsewhere, he rejected misquotes about Iran oil customers, and said, “I did not say our customers are spies, but I said that (some) people come to us under the pretext of buying oil in a move to collect intel on how we sell our oil (through bypassing sanctions) and we are aware of this.”

Iran says its patience is wearing off as the EU has not remained committed to its undertakings based on the 2015 nuclear deal to buy Iran’s oil and prevent re-imposition of sanctions against the country.

Iranian officials had earlier warned that the European Union’s failure in providing the needed ground for Tehran to enjoy the economic benefits of the nuclear deal would exhaust the country’s patience.

In a Saturday meeting in Tehran, Iranian Deputy Foreign Minister for Political Affairs Seyed Abbas Araqchi and Secretary General of European External Action Service Helga Schmid studied the latest developments under the nuclear deal and in connection with Iran’s 60-day deadline.

Araqchi warned Schmid that Tehran’s 60-day deadline will not be extended at all, adding, “Iran will adopt the next measures or the second step unless its demands will be met by them (the Europeans).”

Following the US’ withdrawal, the foreign ministers of the remaining signatories to the JCPOA agreed to establish and launch the European channel for transactions with Iran, called INSTEX. The mechanism is yet to become operational. 

In the previous weeks, German Foreign Minister Heiko Maas and Japan’s Prime Minister Abe Shinzo met with Iranian officials and conferred on the JCPOA, as well as Iran-US tension.

On the first anniversary of the US’ unilateral withdrawal from the nuclear pact, on May 8, the SNSC announced that the country modified two of its undertakings under the Joint Comprehensive Plan of Action in return for the US abrogation of the deal and other signatories’ inability to make up for the losses under the agreement, warning that modifications would continue if the world powers failed to take action in line with their promises. The declared modification will take place on July 7 in practice when Iran’s uranium and heavy water stockpiles at home cross the borderline specified in the JCPOA.

Washington withdrew from the internationally-endorsed 2015 nuclear deal with Iran, re-imposed the toughest-ever sanctions against the country and started a plan to zero down Tehran’s oil sales.

Under the nuclear agreement reached between Iran and six world powers in July 2015, Tehran undertook to put limits on its nuclear program in exchange for the removal of nuclear-related sanctions.

In 2018, all the other signatories — Russia, China, Germany, France, the UK, and the EU — refused to follow the US example and confirmed their commitment to the accord, trying to save the deal with the Islamic Republic.

Iranian officials then warned that the European Union’s failure in providing the needed ground for Tehran to enjoy the economic benefits of the nuclear deal has exhausted the country’s patience.

Yet, Iran continued compliance with deal, stressing that the remaining signatories to the agreement had to work to offset the negative impacts of the US pullout for Iran if they want Tehran to remain in compliance.

Europeans’ honesty in dealing with the Iran nuclear deal has always been seriously doubted by Iranian masses that were discontent with talks with European states.

Almost a year later, however, the EU failed to provide Tehran with its promised merits. Then, in early May the US state department announced that it had not extended two waivers, one that allowed Iran to store excess heavy water produced in the uranium enrichment process in Oman, and one that allowed Iran to swap enriched uranium for raw yellowcake with Russia.

Until now, Iran was allowed to ship low-enriched uranium produced at Natanz to Russia before it hit the 300-kg limit and the US measure leaves no way for Tehran other than exceeding the ceiling for storing the enriched uranium in violation of the 2015 nuclear deal.

Also, the United States would no longer waive sanctions that allowed Iran to ship heavy water produced at its Arak facility beyond a 300-ton limit set in the 2015 nuclear deal to Oman for storage which again forces Tehran to store it inside country in violation of the nuclear deal.

In return, Iran’s SNSC said in its statement of May 8 that “the Islamic Republic of Iran declares that at the current stage, it does not anymore see itself committed to respecting the limitations on keeping enriched uranium and heavy water reserves”.

The statement gave the Group 4+1 (China, Russia, Britain and France plus Germany) “60 days to put into action their nuclear deal undertakings, specially in the banking and oil sectors, warning that “in case these countries fail to meet Iran’s demands, the Islamic Republic of Iran will cease implementation of restrictions on uranium enrichment levels and measures related to the modernization of Arak Heavy Water Reactor as well”.

“Once our demands are met, we will resume implementation of the ceased undertakings. Otherwise, the Islamic Republic of Iran will stop compliance with its other undertakings in consequent phases,” the SNSC warned.

It underlined Iran’s readiness to continue its consultations with the countries which have remained in the nuclear deal at all levels “but will show a firm and rapid reaction to any irresponsible measure, including referring the issue to the UN Security Council or imposition of more sanctions”.

“The Islamic Republic of Iran’s president has in his letter to the leaders of the nuclear deal member states clearly reminded them of the Islamic Republic of Iran’s type of reaction,” the statement added.

It reminded the G4+1 of Iran’s good will during the nuclear talks, implementation of the nuclear deal and giving sufficient time to the other signatories to implement the deal, saying that it is now their turn to prove their good will and adopt serious and practical measures to protect the nuclear deal.

“The door of diplomacy will not remain open for a long time and the US and other members remaining under the nuclear deal are fully responsible for failure of the nuclear deal and any possible consequences,” the statement said.

It underlined that the decision was made in line with defending the Iranian nation’s security and national interests and materialization of Iran’s rights stated in the paragraphs 26 and 36 of the nuclear deal.

Iranian President Hassan Rouhani in a letter, issued on the same day of the SNSC’s issuance of the 60-day ultimatum, informed the Group 4+1 on stopping implementation of a number of Tehran’s undertakings stated in the 2015 nuclear deal.

Araqchi submitted the letter to the ambassadors of the G4+1 to Tehran after they were called to the foreign ministry in the morning on the very day of the ultimatum.

The letter contained decisions by the SNSC to “halt implementation of a number of the Islamic Republic of Iran’s undertakings under the nuclear deal”.

Also, another letter was sent by Iranian Foreign Minister Mohammad Javad Zarif to EU Foreign Policy Chief Federica Mogherini to inform her of details of Iran’s measures.