Iraq oil moves may constitute Iran sanctions violation
Earlier in July Obama signed a law which upgraded sanctions against the Iranian government, a response to its growing nuclear program. It is likely that Iraq will have violated American sanctions if it continues to press ahead with a number of new oil and gas plans with neighbouring Iran. The United States policy has been quite clear since the middle of the 1990s, which is that any company or business that decides to do business deals with Iran risks losing access to US markets.
Christopher Hill, the United States Ambassador to Iraq, gave an interview in which he said that Iraq needs to make serious decisions on its own interests before it decides to violate its US sanctions. The most serious potential violation is likely to have been in regards to the distribution of oil into the Kurdistan area - a semi-autonomous region which is currently disputed.
Currently, no foreign entity is entitled to invest in the Iranian energy sector to a figure above 20 million dollars and a ban is included on all gasoline and sales related to refinery services if the value is greater than one million dollars for each shipment (or above 5 million dollars for 12 months). However, Iran has been expanding its oil interests to its eastern border, which has increased the likelihood of foreign neighbours such as Iraq of beginning new profit negotiations with the country. Many members of the Iraqi government have strong links with Iran, viewing their eastern neighbour as a critical partner in Iraq’s gas and oil strategies for the future.
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