D

espite new milestones in the past few years, bilateral relations between Indonesia and Iran face new challenges as the latter deals with growing pressure from the United States, particularly after last year when the US withdrew from the landmark Iran nuclear deal.

The US and Israel are leading a new push to pressure Iran at a conference in Warsaw on Thursday, where US Vice President Mike Pence and Israeli Prime Minister Benjamin Netanyahu are expected to address the latest situation in the Middle East.

Iranian Ambassador to Indonesia Valiollah Mohammadi Nasrabadi said Indonesia and Iran had made numerous collaborations in science and technology last year. Trade volume had also increased, he said.

In the energy sector, he added, while Indonesia’s state-owned energy giant Pertamina had signed a memorandum of understanding with its Iranian counterpart to develop Iran’s Mansouri oil field in 2017, the finalization of the deal remained unclear.

Pertamina reportedly said the decision to freeze the deal was to preserve the country’s “good relationship” with the US.

The Mansouri field was expected to produce 250,000 to 350,000 barrels of oil per day with a capital expenditure of US$6 billion in a 20-year period.

“Unfortunately, after the US withdrew from the JCPOA [Joint Comprehensive Plan of Action] and unilaterally put sanctions on Iran, Pertamina froze the project,” Nasrabadi said on Wednesday.

In May last year, US President Donald Trump announced that the US had withdrawn from the JCPOA — popularly known as the Iran nuclear deal that took 13 years of negotiations between Iran and the five permanent members of the United Nations Security Council — including the US — as well as Germany and the European Union.

In the agreement, Iran agreed to scale back its uranium enrichment program and promised not to pursue nuclear weapons. In exchange, international sanctions were lifted, allowing it to sell oil and gas worldwide.

However, Trump argued it was a “horrible, one-sided deal” that left Tehran with the resources to fuel conflict in the Middle East. The unilateral withdrawal caused the US to reimpose sanctions to exert “maximum pressure” on the Iranian government.

The US was supported by Israel, Saudi Arabia, Bahrain and the United Arab Emirates but faced opposition from the rest of the world.

In response, the EU introduced measures to alleviate the effects of US sanctions on European firms and created a new mechanism called the special purpose vehicle (SPV) to facilitate financial transactions with Iran.

The Instrument In Support Of Trade Exchanges (INSTEX), which is registered in France, will help act as a go-between for European exporters and Iranian importers and vice versa.

Indonesia also issued a statement that expressed regret for the US withdrawal, arguing that the Iran nuclear deal was an important agreement that could contribute to the promotion of nonproliferation of nuclear weapons and maintain peace and security.

Grata Endah Wedaningtyas, the Foreign Ministry’s director of international security and disarmament, said as Indonesia supported the JCPOA, there were discussions with a number of economies, including the EU, for a possible solution.

“With the US withdrawal, every country must develop a strategy to facilitate trade cooperation with Iran, to facilitate businesspeople so that they are not affected by US unilateral sanctions,” she told The Jakarta Post on Thursday.

She said Indonesia was also following closely the newly introduced alternative payment scheme for EU businesspeople who want to trade with Iran.

“We will be monitoring these developments and how a scheme like INSTEX could be used by Indonesian businesspeople,” she said.