US Companies Face Uncertainty Amid Iran Trade Embargo Bill

President Clinton's executive order prohibiting US companies from developing Iranian oil and gas fields has sparked concerns in the oil industry, with some experts warning that a total trade ban against Iran could harm US companies due to a tight sour crude market, while others believe it would have limited impact on Iranian businesses. The bill, introduced by Sen. Alfonse D'Amato, has gained momentum, with 25 senators, including Majority Leader Robert Dole, supporting the measure. Opponents of the ban argue that Iran would simply sell the oil to other markets, while US firms would struggle to find alternative crude suppliers in a tight market.

Key Takeaways:

• President Clinton signed an executive order on March 15, 1995, barring US companies from developing Iranian oil and gas fields, forcing Conoco Inc. to drop its plans.
• Sen. Alfonse D'Amato's bill, which aims to impose a total trade embargo on Iran, has gained momentum, with 25 senators supporting the measure.
• The bill would restrict foreign affiliates of US companies from buying Iranian crude and reselling it on the international market.
• US companies have taken a neutral stance on the issue, with some privately expressing concerns about Clinton's position and the bill.
• Industry experts believe that a unilateral trade embargo against Iran would be ineffective, and that an international trade embargo would be more effective.
• Opponents of the ban claim that Iran would simply sell the oil to other markets, while US firms would struggle to find alternative crude suppliers in a tight market.
• Conoco's plans to develop Iranian oil and gas fields were cancelled after hearing about Clinton's decision, two days before a Senate hearing on the bill.

Statistics:

• In 1993, US companies bought $3.5 billion of Iranian oil that was used to supply their overseas refineries.
• A Conoco rep is among those scheduled to testify before the Senate Banking and Housing Affairs Committee on the bill.
• Sour barrels are increasingly scarce in the Mediterranean and Northwest Europe, making it difficult for US firms to find alternative crude suppliers.
• 25 senators, including Majority Leader Robert Dole, support the bill, introduced by Sen. Alfonse D'Amato.

Sources:

• "President Signs Executive Order Affecting Iran Oil Deal", The Oil Daily, March 15, 1995.
• "Democrats join in call for Iran sanctions", Politico, January 1995.
• "Sour Crude Market Presents Challenges", Oil & Gas Journal, 1995.