Shell’s offer to pay Iran oil debt with grains tricky for U.S., U.K.
Washington, DC, United States (4E) – Royal Dutch/Shell’s proposal to pay its $1.4 billion oil debt to Iran with grain presents a dilemma to the U.S. and U.K. as it will bypass international sanctions on the Islamic country, according to the US Foundation for Defense of Democracies (FDD).
FDD head Mark Dubowitz said the U.S. and U.K. are wary of agreeing to the deal as it may prompt other companies to do the same. However, the two countries also don’t want to be accused of blocking humanitarian supplies for Iran.
There is no reaction yet from the U.S. State Department while the U.K. Treasury said it still backs the European Union sanctions on Iran imposed on July 1, including an oil embargo and a ban on banking transactions with the National Iranian Oil Company (NIOC).
The Anglo-Dutch oil company failed to pay Iranian crude bought from NIOC when the latest sanctions took effect as the U.K. denied its request for bank transfer to Tehran. The debt is ballooning due to the unpaid interest prompting the oil company to ask U.S. commodities trader Cargill to accept payment for its deliveries of cereals to Iran in order to offset the debt. Cargill, however, refused.
Tehran suggested that Shell fund the construction of a natural gas pipeline in Iraq or Turkey to offset the debt. But Shell declined the proposal that will allow Iran to export its natural gas to the two countries.