US warnings against doing business with Iran have left companies confused about whether they can work in the Islamic republic, even in sectors where international sanctions have been loosened, according to a senior official in Tehran.

Abbas Sha’ri, Iran’s deputy oil minister and head of National Petrochemical Company, said foreign banks and insurance companies were uncertain about which transactions were allowed.

Under an agreement, which came into force in January for six months, between Iran and the US, UK, France, Russia, China and Germany, the Islamic regime will restrict uranium enrichment in return for modest sanctions relief, including the suspension of restrictions on the petrochemical and auto sectors.

The US last week accused about three dozen companies and individuals in eight countries of violating sanctions on Iran, in the toughest enforcement action since the nuclear deal was agreed and a clear warning to those who were thinking of returning to Iran.

“Our understanding is that there is no obstacle to the transfer of money and technology [to the petrochemical sector], but US politicians keep saying sanctions are still in effect, which makes those who wish to work with us hesitate,” Mr Sha’ri told the Financial Times. “A gate has partially opened, but no one knows how to navigate through the new route. Each side has a different interpretation.”

The sanctions date back to May 2013 when, under an executive order from President Barack Obama, the US government announced it would penalise companies involved in the purchase or acquisition of Iranian petrochemicals.

Mr Sha’ri insisted Iran’s production did not change much under sanctions and blamed falling exports on rising domestic consumption. Iran produced 42.7m tonnes of petrochemicals in 2011-12 and exported 18.2m tonnes worth $14.7bn, according to official figures; export revenues fell to $12.1bn the following year.

Iran’s petrochemical exports to Europe were about 3 to 4 per cent of total exports before the imposition of sanctions but were now negligible, Mr Sha’ri said. He added that sales to other countries were continuing but, because of sanctions, about 50 per cent of the foreign exchange revenues from our exports were “stuck in the banks of countries such as India, China, South Korea and Japan”.

Although Mr Sha’ri insisted that domestic industries could address Iran’s needs, he acknowledged that sanctions had affected investment and delayed development plans in the sector, which meant Iran could “no longer meet an earlier target of producing 120m tons of petrochemicals by 2025”.

Quasi-state-run petrochemical companies needed $70bn in foreign investment to increase annual production capacity from 60m to 135m tonnes in eight years, he said.

The sector operated 36 per cent below capacity, largely because of a lack of spare parts, although it was also suffering from a temporary shortage of gas supplies.

The petrochemicals industry has seen some benefits from international sanctions. The national currency, the rial, has dropped in value by about half over the past two years, keeping gas cheap and making exports lucrative.

“Nowhere in the world gas is so cheap. It is like drinking water from the spring,” Mr Sha’ri said.

This competitive advantage makes Iran hopeful that international groups that used to work in Iran – including France’s IFP, Technip, Linde, BASF, Basell, Shell and Denmark’s Haldor Topsoe – will return.

Before sanctions, European banks such as HSBC, Société Générale, BNP Paribas and Deutsche Bank invested $10bn in petrochemical projects, which Iran used to import technology.

Currently the only foreign production partner is SCG, of Thailand, which has a contract with a polyethylene company worth about €300m.

“European companies from France, Germany, Denmark and Switzerland as well as Asians from Japan and South Korea, which used to work with Iran, have started commuting to Iran again. [But there is] no deal yet,” Mr Sha’ri said.

He added that no US companies had yet met Iranian officials: “We hope a US company like UOP, which used to sell catalysts and knowhow to us, can resume its co-operation.”

The National Petrochemical Company is hoping to boost international interest by holding a forum in May – a year earlier than scheduled.

“We welcome European and American companies to this event,” Mr Sha’ri said. “We hope Europeans come back as Iran is determined to reconcile with the world.”

Copyright The Financial Times Limited 2018. All rights reserved.