Total, the French group that became the biggest foreign investor in Iran’s energy sector after sanctions were eased in 2016, said it would pull out of the country unless it could be protected from US penalties following Washington’s withdrawal from the nuclear deal.

The decision by Total, which signed a multibillion-dollar deal last July to develop the giant South Pars gasfield, marks a significant setback for European efforts to keep the Iran pact alive without the US. The Total agreement was the Islamic republic’s first big energy contract with an international oil company in more than a decade.

Total said its ability to continue was contingent on “a specific project waiver” from Washington. Steven Mnuchin, US Treasury secretary, has said that while waivers and licences could be applied for, the administration wanted “maximum sanctions” on Iran.