US feels the heat after Iran-Switzerland $42b gas deal

The US and its allies are worried that the sanctions regime against Tehran is under threat from a possible new wave of European investment in Iran’s strategically important gas sector.

Tehran has already concluded gas deals with Chinese and Malaysian companies – ending a protracted lull in investment in its energy sector – and has alarmed Washington by reaching an agreement with a Swiss group.

The dilemma threatens to expose the limited US influence over foreign companies strategic decisions.

Although Washington and its allies have convinced the United Nations Security Council to sign up to three sets of sanctions against Iran’s nuclear and missile sectors and banks, it has been unable to broaden such international measures into the key energy sector.

Now, the US fears that a 25-year supply agreement concluded in March between Elektrizitäts-Gesellschaft Laufenburg (EGL) of Switzerland and Iran could encourage other deals, particularly in the gas sector, despite American calls for tougher sanctions against Tehran over its controversial nuclear program.

The Swiss government says the deal could be worth up to €27bn ($42bn, £21bn). “The worry is that the Swiss deal will lead others, such as the Austrians, to confirm energy investments in Iran, and that companies like [France’s] Total could then follow suit and sign contracts of their own,” said one western diplomat. Tehran Times