UPDATE: Iran Asks France's Total To Resume Refueling Planes -Source

(Adds background in paragraphs two, 10, 11 and 12.)

 
 By Benoit Faucon 
 

LONDON--Iran is asking French oil giant Total SA (TOT) to resume refueling its passenger aircraft and has even raised the question with the French president, an Iranian official said recently.

The request illustrates Iranian hopes that the election in May of a new French administration would lead to a thaw between the two countries. However, the French authorities have so far not eased any trade restrictions on Iran and continue to block even unsanctioned transactions from Iranian banks.

An Iranian official asked French President Francois Hollande last month to intercede with Total over the refueling of its aircraft. "He said he would look into it," the Iranian official said.

The French presidency referred calls from Dow Jones Newswires to the foreign affairs ministry, which didn't return several requests for comment on the matter.

Under Mr. Hollande's predecessor, Nicolas Sarkozy, France led a European push to tighten sanctions against Iran, culminating in a European Union embargo July 1.

Tehran also appealed directly to Total's Chief Executive Christophe de Margerie for the resumption of refueling of the national airline planes, the person said.

A Total spokesperson confirmed the company had stopped "deliveries of jet fuel to Iran Air in March 2011, due to the evolution of the relationship between Iran and the international community."

Many oil companies in Europe halted refueling to state-owned Iran Air after the U.S. banned the sale of fuel products to Iran. The likes of Total--which has sizeable operations in North America--feared they could run into trouble with Washington.

However, some jet fuel suppliers continue to supply Iran Air. Iran Air's aircraft calling at the U.K's Heathrow airport--where jet fuel providers stopped supplies in 2010, are refueling in another country on the way back from London to Tehran, according to the Iranian airline's Website.

The Islamic Republic hopes France will soften its stance under Mr. Hollande, who was elected in May. But though the new administration has taken a less hawkish approach to Iran than under Sarkozy, tight restrictions on Iranian dealings in the country remain.

It emerged Tuesday that car maker PSA Peugeot Citroen SA (UG.FR, PEUGY) and hundreds of smaller firms are losing business as the government withholds 220 million euros set aside by an Iranian bank for future payments for exports, people familiar with the matter told Dow Jones Newswires.

The payments are being withheld due to a fears they could harm Peugeot's alliance with U.S. auto-maker General Motors Co. (GM).

Write to Benoit Faucon at [e-mail] (Geraldine Amiel in Paris contributed to this report.)

Subscribe to WSJ: http://online.wsj.com?mod=djnwires