Editor’s Comment: The alternative axis
Donald Trump’s singular mindset might push Iran down a new path with Russian and Chinese interests
The revolving door recruitment policy at the White House has naturally engendered a certain apathy in many political observers as they struggle to keep pace with the capriciousness of Donald Trump’s policies and thinking.
But the general eye rolling at Secretary of State Rex Tillerson’s sacking last month may in fact have been counterbalanced by something akin to a steely gaze emanating from the bean counters of Tehran.
Ever since Trump came into office the re-imposition of tough economic sanctions on Iran has been highly likely. The removal from office of Tillerson, a tepid supporter of Iran’s reintegration to the global economy, and his replacement with the more hawkish Mike Pompeo makes the return of sanctions pretty much a forgone conclusion.
The consequences of such a landmark edict, due on May 12, will undoubtedly be felt hard within the Islamic Republic’s oil and gas sector. To describe Iran, a nation with more than 150bn barrels of proven oil reserves and the second largest accumulation of natural gas reserves, as hydrocarbon rich is an understatement.
There is no question the big beasts of the international industry have been circling Iran, like bandits in a spaghetti Western, eyeing up its potential, but also each other, and seeing who will draw first as Trump’s threats have hung like the sword of Damocles over Iran’s ambitions.
That occasional thorn in America’s side France, in the form of supermajor Total, finally took the plunge and signed a prospective multi-billion dollar deal for the development of Iran’s giant South Pars gas field last year. Faced with the probability of the US trying to slam the door on such agreements, the firm’s CEO Patrick Pouyanné displayed a resolute commitment to it at a recent press conference in Abu Dhabi.
Such a stance might give Tehran pause for thought. Trump may indeed cast his shadow over the strategies of many multinational operators but his influence is not absolute.
Recent reports suggest that Iran is about to reach out to the likes of Russia and China and circumvent, as best it can, the obstacles Washington might put in its way.
Indeed, Russian premier Vladimir Putin was in Iran just a few months ago and deals worth tens of billions of dollars were allegedly signed by Iran’s Oil Ministry and Russia’s giant oil firms such as Gazprom and Rosneft. If Total is reluctantly pressured into pulling out if its deal, some analysts think its minority partner in the tie-up, the China National Petroleum Corporation, will just step into its shoes instead.
If Trump tears up Iran’s nuclear deal next month, the likes of Total, BP, Shell and Eni could well lose out on potential opportunities across the Strait of Hormuz, but then so too will ExxonMobil, Chevron and Halliburton.