Iran urges Europe to offset US sanctions by November deadline

Iran has set a 4 November deadline for European parties to its nuclear deal to find a way to offset US sanctions against the country’s oil industry, suggesting it may pull out of the deal if they fail.

On Tuesday, the nation’s deputy foreign minister, Abbas Araghchi, said on state television that if the sale of oil, which he called Iran’s main interest in the agreement, could not continue then it would no longer derive any benefit from remaining in the agreement.

The upcoming US sanctions on Iran’s vital oil industry accompany a ban on Iran buying dollars, trading gold and other precious metals, and sanctions on the nation’s automotive sector.

However, the EU has pledged to defend the nuclear deal to protect European companies with interests in Iran and allow alternative financing for Iranian investments, but has so far failed to find a way around the sanctions.

RBC Capital Markets’ oil market expert Helima Croft said on Wednesday said these measures could lead to an "unintended military escalation" but that the country was likely to avoid direct confrontation with regional US allies such as Saudi Arabia and Israel.

Croft and her team of analysts did maintain that military action was "one of the most underappreciated risks".

"We maintain that Iran 's response to the coercive measures will play an important role in determining the potential upward trajectory of prices," said Croft.