US allies in the EU who had previously voiced concerns about US withdrawal from the Iran nuclear deal have reiterated that the deal is crucial for security and have stepped forward with plans to insulate EU firms from US sanctions. EU’s foreign policy chief Federica Mogherini’s released a joint statement to this effect confirming that the EU are determined to protect European economic operators engaged in legitimate business with Iran, in accordance with EU law and with UN Security Council resolution 2231. This statement is in turn followed by European Union’s updated Blocking Statute that enters into force on 7th August to protect EU companies doing legitimate business with Iran from the impact of US extra-territorial sanctions.
Iran’s Dry Bulk Ton-Mile demand is reflective of these contentious undercurrents. Trade volumes have been steadily declining from the beginning of this year up to president Trump’s decision this May to withdraw from the Iran nuclear deal. Subsequent tussling between the US and EU allies and lack of a single voice for policy had a positive impact on Ton-Mile demand, but this growth has now retraced back to May’s lower levels. It remains to be seen how the conflicting US and EU approaches to Iran will affect the market and its participants, fallout from the US – China trade war, including looming Chinese tariffs on US energy imports only add to this volatile dynamic.
Source: Hellenic Shipping News.