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As Iran nuclear deal flounders, France turns to Saudi for oil

As Iran nuclear deal flounders, France turns to Saudi for oil

2019/06/13 | 19:15

(Hatha al-Youm | Iraq News)- Over the past year, France has led a European push to keep

trade with Iran alive after the United States tore up the nuclear deal with

Tehran and re-imposed sanctions. But over the same period, data shows France

has cut purchases of Iranian oil and sharply increased imports from Iran’s

arch-enemy Saudi Arabia.In recent weeks, France has used its energy needs to justify

a surge in arms sales to the kingdom, even if there is no evidence the 50

percent increase in Saudi purchases of French arms last year was conditional on

France buying Saudi oil.The surge in France’s buying of Saudi oil shows Paris is

doing less business with Iran even as it publicly encourages European partners

to find a way to keep trade with Tehran flowing via the Franco-German-British INSTEX

trade system.It also underscores how difficult it is for a global power

and permanent UN Security Council member like France to stand up against the

United States and its closest Arab-world ally when they are determined to put

the squeeze on Iran.Last month, Defense Minister Florence Parly said trade ties

with allies like Saudi Arabia were essential to safeguarding France’s security

and energy interests.“(Weapons) exports make it possible to forge close ties with

states that are strategic for the security of France,” she told parliament, one

of the first times a senior official has linked arms sales to France’s broader

economic relations with Saudi Arabia. “It puts us at the heart of the Middle

East, a key region for our security interests and our energy supplies.”Asked about the link between oil purchases and arms sales, a

French diplomatic source was straightforward: “We want to save the nuclear deal

because it helps peace in the region, but we have always had a historical

relationship with Saudi Arabia so why would we jeopardize this?”The sharp drop-off in Iran’s ability to sell its oil

internationally has hit the economy hard, delivering exactly the impact the INSTEX

system is designed to prevent in the long-term.French finance ministry data shows France bought 2.2 billion

euros ($2.49 billion) of Iranian light crude between April 2017 and March 2018,

making it France’s third largest supplier.But over the following 12-months, that figure fell 57% to

936 million euros, with imports from Iran stopping altogether from September

2018 onwards, as sanctions bit.In contrast, French purchases of Saudi oil jumped 50% to 3.7

billion euros between March 2018 and April 2019.Industry sources say Saudi and Iranian crude oil have very

similar properties that make them good substitutes. Over the same period, Paris

also substantially increased its purchases of Russian and Iraqi crude, which

are also similar.All countries had to reduce oil imports from Iran as

sanctions mounted, although China and India continued to buy after initial US

waivers, although they have now also cut purchases.CLOSER SAUDI TIESFrance has nurtured close ties with Saudi Arabia. But the

nuclear deal in 2015 between Iran and six world powers – the United States,

France, Britain, China, Germany and Russia – eased sanctions in return for

Tehran curbing its nuclear program, providing an economic lifeline for Riyadh’s

rival.France, with business ties in Iran, moved quickly to

capitalize, and some of its biggest corporations followed. Total was the first

international oil company to return to Iran, while other French firms such as

carmakers PSA and Renault also moved back.Between 2016 and early 2018, French purchases of Iranian

crude oil soared to more than 2 billion euros a year.However, US President Donald Trump, who arrived in the White

House as Iran’s economy was reaping the benefits of the deal, called it “the

worst ever negotiated”. He pulled the United States out, re-imposed tough

sanctions, including on Iran’s oil sector, and threatened punishment for allies

like France who kept doing business with Tehran.The US decision was always likely to tighten French ties

with Saudi Arabia, said Jalel Harchaoui, fellow at Clingendael Institute in The

Hague.“The US unilaterally walking away from the JCPOA (nuclear

deal) forced France to reduce its economic transactions with Iran. That

development is seen as yet another reason to tighten the closeness between

Paris and the Gulf capitals,” he said.Saudi Arabia backs the United States’ tough line on Iran and

has sought to broaden the anti-Iran front. France shares concerns over Iran’s

ballistic missile program and meddling in the Middle East, but says engagement

is preferable to isolation.FROM WEAPONS TO ENERGY SECURITYThe shift to buying more Saudi oil comes at a sensitive time

for France and its relations with the kingdom.In particular, President Emmanuel Macron is under fire from

political rivals and human rights organizations over French weapons sales to

Saudi and the United Arab Emirates. Both states have used the weapons in the

war in Yemen, where a Saudi-led coalition is fighting Iranian-backed Houthi

rebels.Foreign Minister Jean-Yves Le Drian has urged Riyadh to end

the “dirty war” in Yemen, but also accused Iran of supplying the Houthis with

weapons they have used against Saudi territory.He and Macron have defended arms sales to Saudi and the UAE

as necessary in the global fight against terrorism.Saudi Arabia has been France’s top arms buyer over the last

five years, with sales jumping 50 percent to about 1 billion euros in 2018.Rather than avoiding the issue, Macron’s government has

sought to draw a link between energy and security in answering criticism over

the weapons sales.“Maintaining economic relations with these countries means

keeping a presence in key regions for our security interests and our energy

supplies,” Parly said.











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