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Shipping giant Maersk to abandon Iran as threat of sanctions grows

Shipping giant AP Moller-Maersk has said it will stop working in Iran as the international fallout over the collapse of the country’s nuclear deal grows.
Soren Skou, chief executive of the company which is the world’s largest container shipping line, said he would abide by sanctions imposed on the Gulf nation.
“With the sanctions the Americans are to impose, you can’t do business in Iran if you also have business in the US, and we have that on a large scale,” he said. “I don’t know the exact timing details but I’m certain we’re also going to shut down in Iran.”
Maersk is just the latest foreign investor to say it will cut trade ties with Iran in the wake of the US pulling out of the deal under which Tehran had agreed to end its nuclear programme in return for being re-admitted into the global economy.
European countries had hoped to keep the agreement alive by working with Iran even after President Donald Trump said he would reimpose sanctions earlier this month.
Shipping giant Maersk to abandon Iran as threat of sanctions grows

Maersk is a key player in global trade, with more than 80pc of goods travelling by sea

Credit:
AFP
However, on Wednesday French company Total said it would abandon a huge agreement to develop a gasfield in Iran, one of several companies to say they will abandon the country for fear of being hit by US sanctions.
Without foreign investment in the energy sector that would allow Iran to get its huge oil and gas reserves into the global market, it is unlikely that Tehran will curb its nuclear ambitions.
Maersk revealed its withdrawal as it posted first-quarter figures which showed the company had suffered a loss as costs grew faster than improving shipping rates.
Shipping giant Maersk to abandon Iran as threat of sanctions grows

Donald Trump has pulled out of the Iran nuclear deal and said he will consider sanctions on companies dealing with the country

Credit:
JONATHAN ERNST/Reuters
The Danish business said it made a pre-tax loss of $123m (?91m), going against forecasts for it posting a profit. The move into the red was attributed to foreign exchange movements and rising oil prices, pushing up the cost of fuelling its huge ships.
Mr Skou said the shipping line has “a cost problem and we have too much capacity. We need to take out capacity to take our unit costs down.”
This loss came despite revenue rising 30pc to $9.23bn helped by last year’s acquisition of rival Hamburg Sud.
Mr Skou called the performance “unsatisfactory” and said he would make “short-term initiatives to improve profitability”.
Maersk’s container shipping volume grew by 2.2pc in the first quarter, when stripping out the impact of acquisitions, below estimated global demand growth of between 3pc and 4pc. The problem was compounded by global freight rates increasing by 7pc but a 12pc rise in Maersk’s costs.
Mr Skou also gave a downbeat forecast, saying that while the company expects an underlying full-year profit that will beat last year's $356m, he warned of "increased uncertainties due to geopolitical risks, trade tensions and other factors impacting freight rates, bunker prices and rate of exchange".
Shares in Maersk suffered their biggest fall in almost two years on the news, dropping almost 9pc.
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