Following our discussion of Europe's angry response to Trump's unilateral Iran sanctions, in which European Union budget commissioner, Guenther Oettinger made it clear that Europe will not be viewed as a vassal state of the US, stating that "Trump despises weaklings. If we back down step by step, if we acquiesce, if we become a kind of junior partner of the US then we are lost", moments ago Reuters reported that the European Commission is set to launch tomorrow the process of activating a law that bans European companies from complying with U.S. sanctions against Iran and does not recognise any court rulings that enforce American penalties.
"As the European Commission we have the duty to protect European companies. We now need to act and this is why we are launching the process of to activate the ‘blocking statute’ from 1996. We will do that tomorrow morning at 1030,” European Commission President Jean-Claude Juncker said.
Speaking at news conference after a meeting of EU leaders in Bulgaria, Juncker added that he "also decided to allow the European Investment Bank to facilitate European companies’ investment in Iran. The Commission itself will maintain its cooperation will Iran."
Europe's hardline position will infuriate Trump, as Brussels effectively nullifying US sanctions will prompt a violent outburst from Trump, who needs Europe on his side for US sanctions of Iran to have any chance of succeeding.
Perhaps sensing what is coming, French President Emmanuel Macron took a slightly softer tone, and said that the French defense of Iran nuclear accord is based on concerns about security and stability, not commerce, and that the deal should be supplemented and it is necessary to continue negotiations, including on missile program.
The French president said that "the European Union decided to preserve the nuclear deal and defend EU companies" adding that "our main interest in Iran is not in trade, but in ensuring stability in the region, at the same time, we will not become an ally of Iran against the US."
"My priority is not commercial, it is geopolitical and strategic. It is about stability, it is about favoring an opening of Iranian society. The hardliners in Iran were the most opposed to this accord."
“We’ve had a vibrant discussion on Iran. The 2015 nuclear agreement is a crucial element of peace and security in the region. We have opted to support it whatever the US decides to do,” said the French president on arrival at the Sofia summit. “We have pledged to take necessary political steps for our companies to stay in Iran.”
Macron also said that the nuclear deal with Iran must not only be preserved, but also supplemented and expanded to include ways to solve the missile problem and questions about Iran's role in the region.
"International companies with interests in many countries make their own choices according to their own interests. They should continue to have this freedom," he added, making it clear that European companies will not be subject to US sanctions, even if that decision is ultimately up to the US.
Still he said he won’t force companies to stay in Iran should the U.S. re-impose sanctions; "The President of the Republic is not the director general of Total."
As such, France and the EU have no intention of imposing sanctions or counter-sanctions on U.S. companies over the U.S.’s re-imposition of sanctions on Iran, Macron said.
But the most accurate observations by Macron was that Trump's Iran decision strengthens both Russia and China in the region, something we pointed out weeks ago, begging the question whose interests is Trump representing.
And now that Europe has openly rebelled against Trump's sanctions, one wonders how long before the selling in oil resumes, as it is becoming increasingly clear that unlike 2012, Europe - and most of Asia - will continue buying Iranian oil, suggesting that the decline, if any, in Iranian exports will be a few hundred thousands barrels at most, a number which we expect will shrink to 0 as Iran offers increasingly preferential prices to its non-USD paying clients, especially now that Asian oil demand is soaring.