[LINK] "Iran Is Stuck With China to Finance Its Oil Dreams"
Bloomberg's Marc Champion describes how, even after sanctions, Iran remains dependent on China in the face of Western reluctance.
Amid the snake-infested marshlands on Iran’s border with Iraq, the control room monitoring North Azadegan oil field is manned entirely by Chinese technicians. In central Tehran, hundreds of Chinese pour out at noon from the telecommunications company Huawei to its canteen. There are now so many Chinese expatriates here, some say they outnumber all other nationalities combined.
A decade of international sanctions aimed at blocking Iran’s nuclear program has left China the country’s dominant investor and trade partner. Now, with those restrictions formally lifted, a more pragmatic Iranian government has been trying to ease dependence on China, only to find itself stymied by hard-line resistance and residual U.S. sanctions.
“China has done enough investment in Iran,” said Mansour Moazami, who was deputy oil minister until taking over as chairman of the massive Industrial Development & Renovation Organization this year. “We will provide opportunities and chances for others.”
The tension illustrates a more nuanced situation in post-sanctions Iran than is often presented. Many in the U.S., including Donald Trump, portray Iran as the big winner from last year’s nuclear sanctions deal as European companies rush into one of the world’s last big, untapped emerging markets. Yet in Tehran, the government is attacked for failing to deliver and pandering to a still hostile West.
Western investors have been slow to arrive, forcing Iran back into the arms of the Chinese. That’s especially true in the energy sector, where pressure to increase production is intense. Elsewhere, Western clearing banks still refuse to do business with Iran for fear of falling foul of non-nuclear U.S. sanctions that remain in effect, meaning Western companies can’t raise project finance.
Amid the snake-infested marshlands on Iran’s border with Iraq, the control room monitoring North Azadegan oil field is manned entirely by Chinese technicians. In central Tehran, hundreds of Chinese pour out at noon from the telecommunications company Huawei to its canteen. There are now so many Chinese expatriates here, some say they outnumber all other nationalities combined.
A decade of international sanctions aimed at blocking Iran’s nuclear program has left China the country’s dominant investor and trade partner. Now, with those restrictions formally lifted, a more pragmatic Iranian government has been trying to ease dependence on China, only to find itself stymied by hard-line resistance and residual U.S. sanctions.
“China has done enough investment in Iran,” said Mansour Moazami, who was deputy oil minister until taking over as chairman of the massive Industrial Development & Renovation Organization this year. “We will provide opportunities and chances for others.”
The tension illustrates a more nuanced situation in post-sanctions Iran than is often presented. Many in the U.S., including Donald Trump, portray Iran as the big winner from last year’s nuclear sanctions deal as European companies rush into one of the world’s last big, untapped emerging markets. Yet in Tehran, the government is attacked for failing to deliver and pandering to a still hostile West.
Western investors have been slow to arrive, forcing Iran back into the arms of the Chinese. That’s especially true in the energy sector, where pressure to increase production is intense. Elsewhere, Western clearing banks still refuse to do business with Iran for fear of falling foul of non-nuclear U.S. sanctions that remain in effect, meaning Western companies can’t raise project finance.