The UAE is among countries hoping to be added to a list of economies exempt from US sanctions against Iran.
Calls mount for waivers on Iranian sanctions
The UAE last night joined a chorus of countries hoping to be exempt from US sanctions against Iran.
The calls came after the United States government granted a reprieve to Japan and 10 European Union countries on oil imports from Iran.
"Economically, there's a strong case for the UAE to be exempt," said Mohamed Al Lahouel, the chief economist at the Dubai Department of Economic Development. "The UAE has historic commercial ties with Iran, and if the sanctions slow down trade that will be affected."
The comments reflect the UAE's aim to continue legitimate trade with its near neighbour even as global sanctions tighten.
While the UAE is not an oil importer, it does still have close links through trade of other goods. Bi-lateral trade between the UAE and Iran is worth about Dh50 billion (US$13.61bn) a year.
Turkey also hopes to be given a waiver. Its prime minister, Recep Tayyip Erdogan, plans to raise the issue with Barack Obama, the US president, during a nuclear security summit in South Korea this month, Turkish officials told Reuters.
Turkey imports about 200,000 barrels per day of oil from Iran, accounting for more than 7 per cent of Iran's oil exports.
"Turkey's absence from the United States' waiver list regarding the Iran issue doesn't mean it will not be included," the Turkish energy minister, Taner Yildiz, was quoted by Reuters as saying in Ankara yesterday.
India, another oil importer, has privately told refiners to cut imports from Iran, Reuters reported yesterday, citing a government official. The country was also left off the US list of exempted countries.
Agreed by the US Congress in December, the sanctions aim to penalise countries that continue to buy oil from Iran. Announcing the list of exempt countries, the US secretary of state, Hilary Clinton, said the actions of Japan and the EU nations were "not easy".
"They had to rethink their energy needs at a critical time for the world economy and quickly begin to find alternatives to Iranian oil, which many had been reliant on for their energy needs," she said.
France, Germany, Belgium, Greece, Italy, the Czech Republic, the Netherlands, Poland, Spain and the UK are the European nations exempt. It means they will not face the threat of being cut off from the US financial system under action designed to pressure Iran over its nuclear programme.
Under a US law agreed on December 31, countries have until June 28 to show they have made cuts to crude oil they buy from Iran.
South Korea and China, other big buyers of Iranian oil, were not given waivers.
Japan is estimated to have scaled back its purchases from Iran by 15 to 22 per cent in the second half of last year and has pledged to do more.
"We have told the US side that the trend of decrease would accelerate and Iranian crude imports will be reduced substantially from now on," said Osamu Fujimura, Japan's chief cabinet secretary.
The waivers could provide a lifeline to Iran's economy. Sanctions are already curtailing the supply of basic goods and causing the currency to plummet.
"[The waivers] will be positive for Iran," said Edward Bell, an economist covering Iran at the Economist Intelligence Unit.
"From some of the trading partners they can have access to heavy capital goods and cars."