Despite pressure from the U.S. and others wary that Iran may be financing a nuclear weapon program with oil revenue, several companies are still investing in the Iranian energy sector.
With 20 governments expressing their commitment to reduce the amount of crude oil purchased from Iran, the U.S. government said oil production from the Islamic republic was down by 1 million barrels per day from October, compared with the same time last year.
Sanctions imposed this year were meant to cut into Iran's oil revenue. Washington said members of the international community were sending a clear message to Iran that it must come clean on its nuclear ambitions or face "increasing isolation and pressure."
A government watchdog report, however, said at least seven companies from countries that received waivers from the U.S. government were still investing in the Iranian oil and natural gas sector.
U.S. Secretary of State Hillary Clinton said China, India, Malaysia, South Korea, Singapore, South Africa, Sri Lanka, Turkey, and Taiwan qualified for sanctions waivers because of their reductions in crude oil purchases from Iran. Clinton said steady commitments from those countries meant Iranian funding for its nuclear program and "its support for terror(ism)" were curtailed significantly.
"The message to the Iranian regime from the international community is clear: Take concrete actions to satisfy the concerns of the international community through negotiations with the P5 1 (the five permanent members of the UN Security Council plus Germany), or face increasing isolation and pressure," she said in a statement.
A report from the Government Accountability Office, however, found that at least seven companies from Asian and African economies were still investing in the Iranian oil and natural gas sector. India's ONGC Videsh was listed as an active investor in the Iranian oil sector, with a 40-percent stake in the Farsi natural gas block in Iran. The GAO report noted that the company's exploration contract there had expired, however.
Meanwhile, the China Petroleum and Chemical Corp., known also as Sinopec, holds a majority stake in Iran's Yadavaran onshore oil field, and didn't provide a comment to the U.S. government about its ongoing activity in the country.
And Iranian officials have said on several occasions that sanctions are only pushing them toward one of their own objectives — to develop a less oil-dependent economy.
A member of the Iranian parliament's National Security and Foreign Policy Commission said Clinton's decision suggested Washington had to "think again" in terms of the consequences that sanctions have for U.S. allies.
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The Organization of Petroleum Exporting Countries releases its monthly report later this week. OPEC data shows that since 2010 Iran's crude oil production has steadily declined.
The GAO found that while some countries were still investing in Iran, most of the work and trading activity there has remained in the margins. In its report, the GAO said the State Department is responsible for determining what activity warrants sanction.
But activity in the Iranian energy sector hasn't declined to the point that the country is sidelined completely, as Clinton suggests. Sanctions may be working, however — note the collapse of the country's currency this year.
Nevertheless, Iran remains a major oil player despite its controversial nuclear ambitions. Despite tightened sanctions, Iran managed to hold the No. 5 spot among OPEC member states, just beating Venezuela in terms of October production levels.
—This story originally appeared on Oilprice.com. Click here to read the original story.