Boeing's $9.5 billion Iran deals now dead

Frederick Owens
May 11, 2018

"The lifting of nuclear related sanctions is an essential part of the agreement".

After the 90-day period ending August 6, the Treasury said it would also revoke a license that allowed USA companies to negotiate business deals with Iran.

Airbus jets are mainly made in Europe but parts are imported from the United States, requiring its agreement for sales. Boeing agreed to sell 80 passenger jets to Iran Air for about $17 billion in 2016, but it never began building the planes or factored them in as future revenue.

In 2016, the European Union exported more than €8.2 billion ($9.7 billion) worth of goods to Iran, while importing nearly €5.5 billion ($6.5 billion) from there, according to the European Commission. Iranian disruption could push the price higher, though with USA oil producers pumping strong, it may not have as much influence as in the past.

Boeing Chief Executive Dennis Muilenburg said last month the airplane manufacturer had no Iranian deliveries scheduled this year.

Whether any of that can move ahead if the USA pulls out of the Iran deal is now up in the air.

In a statement immediately after Trump's announcement, Boeing said it "will consult with the US government on next steps".

Key buyers of Iranian crude in Europe are still assessing the impact of the return of U.S. sanctions against Iran, with rival Iraqi and Saudi producers said to be in prime position to eat into Iran's European market share.

More news: House Dems release thousands of Facebook ads bought by Russian trolls

Certain waivers can be negotiated, but the US did not say what goods or countries might qualify.

The former adviser to the Office of Foreign Assets Control (OFAC) said "I think we're in a place where they've got 90 days to fix things but in that time frame, businesses will pull out as a precaution and the stakes rise for any of them caught between their own governments and the United States".

Airbus has a deal to sell 100 aircraft to IranAir.

Airbus said on Tuesday before the Mnuchin news conference that it would study Trump's decision, adding that it would take some time. Boeing got 912 net orders in 2017, compared with the 110 promised to Iran.

"Like other economic players, we are following the evolution of the matter, and are also following the EU's official position on this topic", said a spokesman for PSA, adding that it hoped the European Union would adopt its own independent position regarding Iran. He did not say which countries, but Saudi Arabia has the greatest spare production capacity.

America's on-again, off-again business blockades against Iran weigh heavily on Western companies that plan to do business in that nation of 82 million, best known overseas for exporting petroleum to Europe. "That is why Iran came to the table".

One company hoping for a reprieve is the French oil giant Total, which past year signed a $2 billion contract to develop the South Pars natural gas field.

Other reports by LeisureTravelAid

Discuss This Article