Iran's Minister of Petroleum, Bijan Namdar Zangeneh, warned Monday that no single country has the capacity to replace Iranian oil production. Photo by Lisi Niesner/EPA
Oct. 8 (UPI) -- Iran took a step to combat banking isolation that could hamper any future dealings with nations that currently buy its oil, the country's state agency reported.
The moves come as the country faces separate nuclear-related U.S.-imposed sanctions aimed at preventing the oil-rich nation from continuing exports.
Russian banking expert Oleg Akulinichev said on Monday that a recent approval in Iran of a bill is the first step out of four to comply with the Financial Action Task Force, or FATF, a 37-member Paris-based organization originally set up by the G7 in 1989, according to the Islamic Republic News Agency.
Iranian parliamentarians had hours earlier approved a bill on "joining of Iran to the Combating Financing of Terrorism," the agency said in a separate report.
Iran, which is already on the FATF blacklist, must also take three other steps including changes to the law on terrorism financing, reforms of anti-money laundering laws, and join the UN Convention against Transactional Organized Crime and Counter-Terrorism Convention, Akulinichev added.
Being on the blacklist has "a negative effect on its financial transactions and banking relationships with other countries" for Iran, Akulinichev said. Being a member of the organization would help Iran take advantage of its "economic and industrial potentials," he added.
The FATF gave Iran until October to take actions to eliminate concerns it has about the threats it poses to the international financial system.
"Otherwise, the FATF will decide upon appropriate and necessary actions at that time," the FATF said.
The 37 members of the FATF include China, the Russian Federation, India and Turkey, as well as several European countries that have sourced oil from Iran. In addition to those buying Iranian oil, others may be home to companies that could be exploring ways to continue to do so despite the threat of U.S. sanctions by finding ways to bypass the American financial system.
Iran's action occurs just weeks ahead of the full resumption of sanctions by the United States that target not only its energy sector, including petroleum-related trades, but also transactions by foreign institutions with the Central Bank of Iran.
Iranian crude oil exports, which were about 2.75 million barrels per day in the earlier months of the year, are expected to decline sharply after Nov. 5.
Market uncertainty related to the still unclear demand reduction to be caused by the sanctions has caused volatility in crude oil prices. There is also uncertainty as to whether other countries will be able to replace Iran's production.
Iran's petroleum minister Bijan Zangeneh said Monday that there is not any country, "even Saudi Arabia," that would have capacity to replace the Iranian production.