Some further comment.

US warns foreign energy companies of sanctions if they opt to invest in Iran
Published: March 7 2007 02:00 | Last updated: March 7 2007 02:00

The essence then

The Bush administration said yesterday it had warned foreign energy companies that they risked incurring US sanctions if they invested in Iran.

The warning came as Eon, Germany's biggest importer of natural gas, confirmed it was pursuing its first natural gas supply contract with Iran in an effort to reduce its dependence on Russia.

Posturing, bullying and threatening.

But given Russian supply risk, why the fuck should Germany back down?

Never mind that I can easily think of a number of ways this can be done via backdoor.

Nicholas Burns, a senior State Department official, told a congressional hearing that in recent weeks the US had contacted governments and companies to warn them they would be in violation of the Iran Sanctions Act if they pursued their planned investments in Iran.

Mr Burns mentioned Malaysia, China, Spain's Repsol and Royal Dutch Shell. He said he hoped the act would serve as a deterrent.

It will serve as a great way for the NOCs in Asia to get sweeter deals from the Iranians.

Brilliant, transfer a bit of the cash to Asia, rather than Iran.

I suppose the Communist Chinese and the Malaysians should thank the US for its clumsy obstinacy and spitefulness giving them (the Chinese NOC, etc) negotiating leverage.

His remarks, to the House foreign affairs committee, represented a hardening of US policy and reflected mounting pressure from Congress on the Bush administration to take tougher action against Iran over its nuclear programme.

The act, passed last year, is a successor to the Iran-Libya Sanctions Act that was passed in 1996, threatening an array of sanctions against non-US groups that invested more than $40m in Iran's energy sector. But neither the Clinton nor Bush administrations chose to apply the act out of concern that allies would be alienated and the US dragged into a trade dispute over extraterritorial legislation.

Indeed, as Americans themselves are so very, very fond of extraterritoriality when it hits them.

Mr Burns said the US would not seek to have oil and gas sanctions included in a UN Security Council resolution being discussed this week in response to Tehran's refusal to suspend its uranium enrichment programme. However, he said the US wanted a reference to export credits in the resolution, noting that Germany, Italy and France had already started to reduce such credits.

What I read is the some posturing and public bullying is being trotted out as a temporary measure of appeasement to American legislator-provincials. In the meantime:

"No one is discussing full-blown trade and economic sanctions at this stage," said a British official. "All we can do is to suggest to them [the companies] that . . . they want to bear in mind that Iran is essentially in the international dock."

That companies want to do long-term LNG deals with Iran despite the hostile political climate shows how difficult it is to secure long-term gas supplies, in particular for delivery dates from 2010-2011, by which time Eon hopes its Wilhelmshaven LNG facility will be ready.

Iran has attracted Royal Dutch Shell and Repsol as potential partners in its Gulf LNG project and Total of France and Malaysia's Petronas for its Pars LNG project. For those two projects, and two others for which Iran has yet to attract foreign partners, the country will need to secure several 15-20 year supply agreements.

When the market demand is strong, silly political measures fail - above all hypocritical unilateral ones from a political actor that is widely despised and whose political capital globally is thin at best.