Authored by Irina Slav via OilPrice.com,

“I personally think none of us will be able to get around it,” Vitol’s chief executive Ian Taylor said last week, commenting on the effects that renewed U.S. sanctions against Iran will have on the oil industry.

The sanctions, to go into effect later in the year, have already started to bite. French Total, for one, announced earlier this month it will suspend all work on the South Pars gas field unless it receives a waiver from the U.S. Treasury Department—something rather unlikely to happen. The French company has a lot of business in the United States and cannot afford to lose its access to the U.S. financial system. So, unless the EU strikes back at Washington and somehow manages to snag a waiver for its largest oil company, Total will be pulling out of Iran.

Other supermajors have not dared enter the country, so there will be no other pullouts of producers, but related industries will be affected, too, in the absence of a strong EU reaction to the sanctions. For example, Boeing and Airbus will both have their licenses for doing business in Iran revoked, Treasury Secretary Steven Mnuchin said, which will cost them some US$40 billion—the combined value of contracts that the two aircraft makers had won in Iran.

Tanker owners are also taking the cautious approach. They are watching the situation closely, anticipating Europe’s move, but acknowledging that the reinstatement could have “significant ramifications” for the maritime transport industry, as per the International Group of PI & Clubs, which insures 90 percent of the global tanker fleet.

Everyone is waiting for Europe to make its move even as European companies in Iran are beginning to prepare their exit from the country. Everyone remembers the previous sanctions, apparently, and they don’t want to be caught off guard. But the signals from Europe are for now positive for these companies, of which there are more than a hundred.

Earlier this month, an adviser to French President Emmanuel Macron said that Europe’s response to the threat of U.S. sanctions on Iran will be “an important test of sovereignty.” Indeed, unlike the last time there were sanctions against Iran, the European Union did all it could to save the nuclear deal and has signaled it will continue to uphold it.

While some doubt there is a lot the EU can do against U.S. sanctions, there is one 1996 law dubbed a blocking statute that will ban European companies from complying with U.S. sanctions, which would put companies such as Total between a rock and a hard place.

European Commission President Jean-Claude Juncker said two weeks ago the commission will amend the statute to include the U.S. sanctions again Iran and that the amendments should be completed before the first round of sanctions kicks in in early August.

Many observers believe that if the sanctions are only limited to the U.S. and no other signatory to the nuclear deal joins them, the effect will be limited as well. As McKinsey analyst Elif Kutsal told Rigzone, “Market fundamentals are not expected to change structurally given that Iran doesn’t export crude oil or refined products to the U.S. and exports go mainly to Europe (20 percent) and Asia Pacific (80 percent). Therefore, if the sanctions are only limited to the United States, then this could cause short-term volatility in prices until a new/revised agreement framework is put in place.”

And this is where Iran’s Supreme Leader Ayatollah Ali Khamenei scored a goal: He demanded that the European Union provide guarantees it will continue to buy Iranian crude. If it doesn’t, he said, Iran will restart its nuclear program. Now, if this happens, the EU will not have much choice but to join the sanctions, and then hundreds of thousands of barrels of Iranian crude could be cut off from global markets.

However, even this will result in only a temporary decline in supplies, according to Kutsal, and others that believe that Asian imports from Iran will offset the effect from the U.S. sanctions. According to this camp, the only thing that can unleash the full effect of sanctions is the UN joining the sanction push against Iran.