Shell Seeks to Pay Iran Debt With Grain

By:  Warren Mass
10/30/2012
       
Shell Seeks to Pay Iran Debt With Grain

Royal Dutch Shell is seeking to pay a $1.4 billion debt it owes to Iran that it has been prevented from settling since a European Union embargo that started July 1.

A report from Platts news service on June 25 said that the EU embargo included a ban on oil imports and a ban on the provision of insurance for tankers shipping Iranian oil. Shell, as an Anglo-Dutch-owned company, is subject to EU jurisdiction.

Royal Dutch Shell is seeking to pay a $1.4 billion debt it owes to Iran that it has been prevented from settling since a European Union embargo that started July 1.

A report from Platts news service on June 25 said that the EU embargo included a ban on oil imports and a ban on the provision of insurance for tankers shipping Iranian oil. Shell, as an Anglo-Dutch-owned company, is subject to EU jurisdiction.

With previous attempts by Shell to settle the debt blocked by the embargo, Shell is seeking to circumvent the roadblock by paying off the debt with grain.

U.S. Foundation for Defense of Democracies (FDD) head Mark Dubowitz said the United States and the U.K. are hesitant to agree to the deal because it may prompt other companies to do the same, reported AHN. But the two countries do not want to be accused of blocking humanitarian supplies for Iran.

"It's a pretty complicated transaction that needs three sets of government approvals for an exception to sanctions covering banking, insurance, shipping and dealing with a banned Iranian counter-party, NIOC [National Iranian Oil Co.]," said Dubowitz.

A report in FoxBusiness.com said that Shell recently contacted U.S. commodities trader Cargill Inc. to pay for its deliveries of cereals to Iran in order to settle the debt, citing "people familiar with the matter."

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Photo: AP Images

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