Europe’s Iran Payments Mechanism: Too Little, Far Too Late?

France, Germany and the UK on 31 January unveiled their long-awaited special payments mechanism intended to facilitate non-dollar trade between Iran and Europe. The idea is that the ‘Instrument for Supporting Trade Exchanges’ (Instex), registered in Paris and headed by German banker Per Fisher, will enable EU companies to trade with Iran despite US sanctions.

But, at least as far as crude oil trade is concerned, it appears highly unlikely that EU companies will resume buying.

European companies have not bought Iranian barrels since US sanctions entered force on 5 November. Oil minister Bijan Zanganeh notes that even the two EU countries granted ‘waivers’ by the US to continue importing have failed to do so. “Among the Europeans, except for Turkey, no other nation has purchased oil from Iran. Greece and Italy refuse to buy Iran’s oil despite winning waivers. Nor do they respond to our correspondence,” he told local press on 5 February. (CONTINUED - 1126 WORDS)