News ID: 231547
Published: 0247 GMT September 17, 2018

US sanctions on Iran unproductive, wrong: Novak

US sanctions on Iran unproductive, wrong: Novak

US sanctions on Iran's oil industry are unproductive and there will be consequences to such a move, Russian Energy Minister Alexander Novak said.

"Our position remains that this is unproductive, this is wrong," Novak told CNBC when asked about the possible impact US sanctions on Iran's oil industry could have.

"It is better to continue working in the market, Iran being just another exporter that provides stable supplies to the market," he said, speaking to CNBC's Geoff Cutmore at the Eastern Economic Forum (EEF) last week in Vladivostok, Russia.

"It is one of the richest in resources and has a solid standing in terms of its energy capability both in the OPEC and in the energy markets as a whole. So, I think there will be consequences, I am sure, but we could only comment once they are in place," the Russian minister said.

Sanctions by US are due to be reimposed on Iran's oil industry on November 4. The move comes after US President Donald Trump decided to withdraw the US from an international nuclear deal in May. The US has said that any countries or companies that conduct transactions with Iran are liable to face secondary sanctions.

Novak expressed that it was difficult to comment on the consequences of Iranian sanctions as he was still waiting to "learn the legal particulars" and effects of the sanctions.

"We do not know how companies will react, how countries that engage with Iran will react. We will have to see the actual adopted documents/sanctions," he said.

US Secretary of Energy Rick Perry met Novak in Moscow on Thursday but it's not been disclosed whether Iranian sanctions, and how to prevent those measures negatively impacting the market, was discussed.

Instead, the US Energy Department released a statement last week detailing the meeting in which it said the ministers had "discussed ways in which America and Russia, two of the world's top producers of natural gas and leading producers of oil can work together to ensure world energy market stability, transparency and sustainability."

The US and Russia are entering an era of competition to provide energy to Europe, in particular. The US opposes a gas pipeline project, called Nord Stream 2, to supply Russian gas to Germany and hinted that it was an alternative source of energy for the region.

"Secretary Perry made clear that while the United States welcomes competition with Russia in energy markets across Europe, Asia and elsewhere, Moscow can no longer use energy as an economic weapon," the US Energy Department said in its statement. "The United States is now in a position to offer these nations an alternative source of supply."

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