Times of India reported that the US has moved one step closer to imposing tough new sanctions on Iran for its alleged nuclear transgressions with the US Senate last week unanimously voting to punish non Iranian firms that do business in Iran's energy sector or help Teheran produce or import refined petroleum products like gasoline by blocking them from doing business in the US market.
The sweeping Senate measure, which passed by voice vote must now be merged with a similar bill in the House of Representatives to forge a compromise measure for both sides to approve and send to Mr Barack Obama president of US, who took a tough line on Teheran in his recent State of the Union address.
Indian companies with business links to Iran include Reliance Industries Limited owner of the world's single largest petroleum refinery complex. However, a spokesperson told TOI that "The RIL group has not been selling gasoline or diesel to Iran since the Q2 of 2009."
In a letter to the head of the US Export Import Bank last year, US lawmakers urged it to suspend financial aid to Reliance unless the Indian firm agreed to stop selling gasoline to Iran. The US bank had approved 2 loan guarantees to Reliance worth USD 900 million that included USD 400 million facility issued in August to help finance the Jamnagar refinery.
Since then, Reliance is said to have whittled down its contracts with Iran and diversified its refining activities even more. Although one of the world's largest oil producing nations, Iran imports at least one-third of its fuel because it lacks refining capacity, which is where Reliance's nearby Jamnagar complex came into the picture. Iran also imports gasoline from the Swiss firms Vitol and Glencore, the Swiss or Dutch firm Trafigura, France's Total and British Petroleum.
But even as it was sizing down ties with Teheran, Reliance doubled its exports to the US from 2008, shipping more than 5 million barrels of gasoline to the US in 2009 after the export oriented Jamnagar complex kicked in. In fact, an Indian petroleum export to US using Aframax tankers mainly from Reliance is one of the untold stories of the year.
While US lawmakers are moving full steam ahead to impose sanctions on Iran, American businesses are not fully on board. A day before the Senate vote, the US. Chamber of Commerce, Business Roundtable, National Association of Manufacturers and the National Foreign Trade Council wrote to National Security Advisor Mr Jim Jones opposing the Congress proposed sanctions.
The groups said that the sanctions legislation will damage US alliances and international trade, by mandating US penalties on foreign firms that violate US unilateral Iran sanctions the Reliance Chevron alliance being but one example.
9 US business groups said that while we agree that preventing Iran from developing the capability to produce nuclear weapons is an urgent US national security objective, the unilateral, extra territorial and overly broad approach of these bills would undercut rather than advance this critical objective. The history of similar efforts demonstrates that such a unilateral approach would provoke a negative response from our allies and would divert attention from an effective, coordinated response to Iran's nuclear ambitions.
Meanwhile, Iran itself has dismissed the idea of sanctions, saying it won't work. These kinds of unilateral sanctions are not new to us. For the past 30 years such sanctions have been imposed by the US and everyone knows they could not be workable.