Houston (Platts)--9Mar2010/948 pm EST/248 GMT

Further Congressional action on legislation imposing gasoline sanctions on Iran "could cause difficulties" for talks on multilateral sanctions at the United Nations, according to a leading US State Department official.

Doug Hengel, deputy assistant secretary, energy, sanctions and commodities, said at the CERAWeek 2010 meeting in Houston Tuesday that the State Department "(is) hopeful that things will not move while (the UN talks are continuing)."

Hengel made the remarks after a panel to discuss the politics and economics of the Middle East, a discussion that focused to a large degree on the issue of sanctions against Iran as that country continues to move toward uranium enrichment and the construction of a nuclear weapon.

The US House of Representatives passed the Iran Refined Petroleum Sanctions Act in late 2009. The Senate has not acted on companion legislation.

Earlier in the panel discussion, Hengel expressed optimism about the UN process to impose tighter sanctions. "We are in constant discussion with other countries, and they've endorsed resolutions in the past," Hengel said. As for Chinese reluctance to go along with further sanctions, "they have vital interests in the peace and security of this region."

But James Placke, a senior associate with IHS CERA also on the panel, didn't see much of a chance for tighter sanctions. "The odds the UN will get this are small," he said. "The Chinese just don't have the interest in doing that, and they seem to be pursuing a very narrow interest." If the US and other western countries were to try to impose stricter sanctions on its own, the Chinese reaction would be "one of relief," Placke said.

Chinese business interests with Iran would probably improve under that scenario, but Placke noted it would be "to the detriment of their long-term security...they're OK with that."

--John Kingston, john_kingston@platts.com