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Energy Companies Shunning Iran

Iran's Bushehr nuclear plant.
Iran's Bushehr nuclear plant.

The list of companies cutting business ties with Iran is growing.

The list of companies cutting business ties with Iran is growing. Four major international oil companies –- Total of France, Satoil of Norway, Eni of Italy, and Royal Dutch Shell of the United Kingdom and the Netherlands – have pledged to end their investments in Iran's energy sector. U.S. Deputy Secretary of State James Steinberg said there is a growing understanding that the Government of Iran is using revenues from its energy sector to fund its suspect nuclear program, and is using procurement for its energy sector to mask the purchase of dual-use items:

"These [four] companies have provided assurances to us that they have stopped or are taking significant verifiable steps to stop their activity in Iran and have provided assurances not to undertake new energy-related activity in Iran that may be sanctionable."

Deputy Secretary Steinberg emphasized that "a nuclear armed Iran would severely threaten the security and stability of a part of the world crucial to our interests and the health of the global economy. As a consequence," he said, "we believe that the international community should collectively abandon a business-as-usual-approach toward Iran."

Mr. Steinberg noted that many companies in a variety of areas have done just that in the aftermath of U.N. Security Council sanctions and other bilateral measures adopted because of Iran's failure to comply with its international nuclear obligations. Iranian officials, he said, are feeling the effects:

"We have pretty good indications, not just in the energy sector, but across the board, that whether it's in the financial sector or whether it's in shipping and transportation, that these measures are increasingly having a significant impact on Iran. There's no question that their ability to do business is being hindered in lots of different ways."

Deputy Secretary Steinberg said that the consequences for Iran will only grow more serious over time, as more companies recognize the reputational risk involved in dealing with Iran. The point, he said, is to show the Iranian government that adverse consequences are linked to its nuclear program, and there is a way forward for Iran to avoid them. "Our goal," he said, "is. . .to make clear to Iran that there are costs for the path they are pursuing."