After China’s pull out…New crisis for the Iranian economy

China’s state oil company has pulled out of a $5 billion deal to develop a portion of Iran’s massive offshore natural gas field, the Islamic Republic’s oil minister said Sunday, an agreement from which France’s Total SA earlier withdrew over U.S. sanctions.

The South Pars field deal, struck in the wake of Iran’s 2015 nuclear deal with world powers, appears to be just the latest business casualty of America’s pressure campaign on Tehran following President Donald Trump’s unilateral withdrawal of the U.S. from the deal.

Oil Minister Bijan Zangeneh, quoted by the ministry’s SHANA news agency, said Sunday that the China National Petroleum Corp. was “no longer in the project.” He did not elaborate or give any reason for the withdrawal, though SHANA said the company “had pulled out of a contract” to develop the field.

After withdrawing from the nuclear deal with Tehran over a year ago, the U.S. imposed sanctions on Iran that have kept it from selling its oil abroad and have crippled its economy. Iran has since begun breaking terms of the nuclear deal. In late September, the U.S. sanctioned Chinese shipping firms it said were ferrying Iranian crude oil.

Secretary of State Mike Pompeo in remarks made during his visit to Athens on October 5. Pompeo cited "malign" Russian influence on NATO ally Greece and its neighbors and criticized Iran and China.

Pompeo said the "renewal" of relations with Athens arrived at "this important moment," citing key regions and countries of interest and concern.

"Take the Balkans, which remain an area of strategic competition.

"Take Russia, which undermines the sovereignty of your neighbors. It tries to stifle religious freedom for many Orthodox believers.

"Take the Islamic Republic of Iran, whose terrorist proxies have destabilized the Middle East, turned Lebanon into a client state, and helped create a refugee crisis that continues to impact Greece to this day."

And, he added, "Take China...which is using economic means to coerce countries into lopsided deals that benefit Beijing and leave its clients mired in debt."

He stressed the need to "continue our work to stop malign Russian influence, both within Greece, and within your neighbors’ borders."

In addition, he said,"Let’s continue to exert pressure on the Islamic Republic of Iran, the world’s largest state sponsor of terror, until that regime becomes a normal nation."

He also backed calls by the European Union to label China a “systemic rival”.

The economic situation has become unbearable because of sanctions and China’s retreat from investing in this important oil field is a major loss for the mullahs' regime, which has long bet on Chinese support as Beijing, a superpower that can stand up to Washington, said Mohammad Ebadi, a researcher in the Iranian affairs.

He said in remarks to “Reference” that public anger is growing because of the failure of the regime in the performance of its functions and this reflects the success of sanctions in the pressure on the Iranian leadership with the utmost power and put him in a crisis to force him to negotiate with them on the controversial files.