Business

Total and Maersk pull out of Iran over US sanctions uncertainty

The energy giant Total and the world's largest container shipping company A.P. Moller-Maersk announced that they would both pull out of Iran claiming that future US sanctions would make business there impossible.

These decisions came after US President Donald Trump decided to pull the US out of the Iran nuclear deal on 8 May, which will result in sanctions being reimposed on Iran that will decrease production output of for example oil and gas.

France-based energy company Total said it will abandon its gas development project in Iran, South Pars 11 (SP11) which it joined in July 2017, over fears of the impact of US sanctions about to be imposed on the country.

Read more: Oil prices surge to new high as 2m Iranian barrels go off the market

The company said in a statement: “Total will not be in a position to continue the SP11 project and will have to unwind all related operations before 4 November 2018 unless Total is granted a specific project waiver by the US authorities.”

Maersk said that the increasing oil prices and high geopolitical tension could negatively affect profitability and that it was impossible for any company which has dealings with the US to stay in Iran. Its share price was down almost 11 per cent at 1pm.

Soeren Skou, chief executive of Maersk, told Reuters: “With the sanctions the Americans are to impose, you can't do business in Iran if you also have business in the US, and we have that on a large scale.”

“I don't know the exact timing details, but I am certain that we're also going to shut down (in Iran),” he said.

Total has found itself in the same position as US shareholders make up more than 30 per cent of the shareholding and its US-based operations accounts for $10bn (£7.4) of its revenue.

French president Emmanuel Macron called upon the EU to protect the EU companies that has business in Iran under US sanctions.

He said: “International companies with interests in many countries make their own choices according to their own interests. They should continue to have this freedom.”

Read more: Oil prices under pressure since Trump's Iran announcement

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