Shell and Iran Still in a Holding Pattern
Though the easing of economic sanctions on Iran brought with it talk of Royal Dutch Shell making a concerted effort to renew ties with the controversial nation, talk pretty much defines this relationship entering the month of April. That information was part of the company’s annual report that was issued last month.
Last year, the company re-opened an Iranian office and had contracted with National Iranian Oil Company on a number of non-binding agreements encompassing development and export considerations.
Yet the past 12 months have only seen Royal Dutch Shell purchase three cargoes worth of oil from Iran worth a combined $254 million. The first deal, made last May for $45 million, resulted in a $1.1 million profit for the corporation. Meanwhile, two other deals made in December that cost $103 million and $106 million, respectively, are currently being transported.
The three relatively meager cargoes are in contrast to the pre-sanctions period, when Royal Dutch Shell was prolific in its purchases. Some of the buys were as much as six large monthly cargoes or 200,000 barrels of oil a day.
Of course, those most recent deals are huge compared to other mundane aspects related to renewing business relationships. For example, the Netherlands’ Iranian consulate was paid $168 to serve as a notary public, $224 worth of stamp duties were paid and plane tickets to fly on Iran-based airlines cost just $592.
One of the key reasons for that limited business is the simple fact that while the European Union made it easier to do business, Royal Dutch Shell’s business holdings within the United States make them subject to the still-restrictive laws on trading with Iran. Steep fines for violations have had a chilling effect and the imposition of sanctions by the new Trump administration threw in another roadblock.