(Bloomberg) — U.S. sanctions on Iran are not only reverberating through the oil world, but also the agricultural market in Latin America.
At least two Iranian vessels set to carry Brazilian corn are stranded off the Latin American nation’s coast because they can’t get fuel, according to the port authority at Paranagua, about 450 kilometers (280 miles) south of Sao Paulo. State-controlled oil company Petroleo Brasileiro SA said it won’t supply the ships — — which have been floating for over a month — due to the risk of U.S. sanctions.
Brazil’s Supreme Court may decide if the ships can be fueled. The general attorney’s office is expected to issue a statement on the case, according to the Valor Economico newspaper. Iran was the main destination of the country’s corn in the past year, with imports totaling 6 million metric tons, according to government data.
The uncertainty surrounding the fate of the vessels is the latest evidence of how the Trump administration’s policies are rattling commodities markets across the globe. The U.S. trade war with China has already led to a shift in trade flows of everything from soybeans to sorghum. Meanwhile, American sanctions aimed at squeezing Iran’s revenue have left some of the biggest oil buyers searching for supplies from elsewhere.
MV Bavand, carrying 48,000 metric tons of corn, should have set off from Paranagua to Iran on June 8, the port authority said in an email. The ship had left Imbituba port, in Brazil’s Santa Catarina state, on May 15 after loading, according to vessel data compiled by Bloomberg.
MV Termeh has been waiting for fuel supply since June 9 to head to Imbituba Port, where it will be loaded with corn and then head to Iran, according to the port authority. It unloaded a cargo in Sao Francisco do Sul Port in Santa Catarina on June 1, data compiled by Bloomberg show.
“If Petrobras loads these ships, it would be subject to the risk of being included” in the U.S. sanctions list, which could result in significant losses for the company, the Brazilian state company said in a statement. “In addition, there’s information that these ships came from Iran loaded with urea, which is subject to U.S. sanctions.”
Reuters reported on the stranded ships on Thursday.
Iran and the U.S. have been at loggerheads since last year, when Donald Trump withdrew the U.S. from a 2015 nuclear agreement with the Islamic Republic he called the “worst deal ever.” In May, the administration refused to extend waivers to eight governments for Iranian oil purchases, ratcheting up the pressure on the country’s already battered economy.
Iran’s willing to meet with U.S. senators to discuss possible ways out of the dispute, the New York Times reported on Thursday. But also said his nation’s escalation of its nuclear enrichment program could be reversed if the U.S. drops sanctions that Trump imposed after withdrawing from the nuclear agreement.
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