By Malini Hariharan
The US is looking to introduce fresh measures targeted at the petrochemicals industry.
The specifics of the new sanctions are not yet available but the goal, says this report, is to bar foreign companies from doing business with Iran’s petrochemical industry by threatening them with being banned from U.S. markets. US companies are already banned from doing business with Iran.
The sanctions are expected to be announced today and would build on measures that were introduced against Iran’s oil and gas industry.
Europe too is likely to introduce similar measures at a later date.
The US move comes after an International Atomic Energy Agency (IAEA) resolution late last week expressing “deep and increasing concern about the unresolved issues regarding the Iranian nuclear program.”
The new sanctions promises to create another round of problems for Iranian petrochemical producers who have successfully managed to do business around existing measures. The exception has been aromatic producers who have had to cut production to divert reformate for gasoline production after US sanctions on gasoline imports was introduced in 2010.
But other petrochemicals, including methanol and polyethylene, continue to be exported in large volumes with the help of Dubai-based traders. Countries like China also do not have any problem taking in Iranian product and it remains to be seen if China will accommodate to any new US measures.
Take the case of methanol. Iran overtook Saudi Arabia to emerge as the largest methanol exporter to China last year, exporting 2.1m tonnes. The trend has continued this year with exports of 1.7m during Jan-Sep 2011.
Iraninan companies had told the blog previously that they have adjusted to a life of sanctions with innovative ways of doing business. But with pressure from the US set to rise, a disruption in trade and further delays to new projects is very likely.