When Iran’s deputy oil minister toured the hulking steel facility that is the Islamic republic’s largest oil refinery, he was delivering a deliberately defiant message: even if Donald Trump reimposes sanctions on the country, Iranians will not suffer the severe petrol shortages they endured at the beginning of the decade. “We will face no problems in supplying petrol both in terms of quantity and quality,” said Alireza Sadeghabadi, as he visited the Persian Gulf Star refinery this month. “We do not need to import any [essential] equipment and material to complete the refinery and produce petrol.” Iranian officials are putting on a brave face and are using the Persian Gulf Star refinery as an example of the progress the industry has made since the nuclear deal with six world powers was implemented in January 2016.
But if Mr Trump carries out his threat to “tear up” the accord and reimpose sanctions, the Iranian sector worst affected would be the Islamic republic’s most important: the energy industry. “The energy sector is a major target,” said Iman Nasseri at FGE, a consultancy. “Any US withdrawal [from the nuclear deal] and any re-imposition of sanctions would first hit exports of Iran’s crude and longer term its refining capabilities and future production.” He added that while the Persian Gulf Star project has moved forward, other modernization programmes were still on hold. The Islamic Republic began building the refinery in Bandar Abbas in southern Iran in 2006 during the presidency of Mahmoud Ahmadi-Nejad, a hardliner. It was a period when relations with the west hit a low and sanctions were tightened, stymieing Iran’s ability to import equipment required to complete the refinery.