Dashing hopes of major European chemicals, pharmaceuticals and energy industry players that their signed and sealed but not yet delivered deals to invest in Iran projects might be able to proceed, the US has rejected EU pleas for exemptions from the wide-sweeping  sanctions it intends to reinstate against the Middle East country.

In a letter leaked to US media last week, Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin said the administration of President Donald Trump intends to exert "unprecedented" financial pressure on Tehran. Therefore, waivers for European firms to pursue projects would only be granted on national security or humanitarian grounds.

The US officials were responding to a letter written in early June by the foreign and finance ministers of the UK, France and Germany. In the communication, the Europeans said they believed the Iran nuclear deal was worth preserving and asked the US to refrain from retaliatory action against companies fulfilling prior contractual obligations.

Even though the US is the only signee that wants to reverse the 2015 Iran accord, it has threatened sanctions against EU companies doing business in or with the country. In their letter, the European ministers asked for exemptions covering commercial sectors such as energy, auto manufacturing, aviation, infrastructure and pharmaceuticals.

The first US sanctions set to be reinstated, on Aug. 6, will target Iran's automotive sector and trade in gold and in other key metals. The remaining sanctions are planned to go back into force on Nov. 4, targeting the energy sector and petroleum-related transactions, as well as transactions with the Central Bank of Iran.

Before the imposition of US sanctions in 2012, the EU was Iran’s biggest trade partner. In the meantime, China has taken its place. Both the People’s Republic and Russia have pledged to uphold their own commitments made since the 2015 agreement.

France is one of the biggest potential investors in Iran, with energy and petrochemicals group Total pursuing projects worth billions; however, the French player has said that without a US sanctions waiver, it will wind down its operations in Iran by November. France’s Air Liquide also has committed to an Iran project. Other chemicals-related companies with investment plans include Germany’s BASF/Wintershall and – reportedly – Linde, along with Shell of the Netherlands and UK.

It is unclear what options, if any, European companies wanting to do business with Iran could grasp to avoid being hit by the re-imposed US sanctions.  Up to now, the EU Commission’s plans to reinstate a blocking statute that would allow its companies to ignore the US edict have not been generally regarded as a viable instrument.