Royal Dutch Shell has again delayed a decision on whether to press ahead with controversial investments in Iran, as Europe’s largest oil and gas company weighs up the increasing costs of the project and political opposition in the United States.

The Anglo-Dutch giant will not now decide on a $10bn (£4.9bn) project to exploit part of Iran’s vast South Pars gas field for at least a year.

In January, Shell and Spain’s Repsol signed a preliminary deal with Teheran jointly to develop two phases of South Pars. At the time, Shell said it might be a year away from knowing whether to proceed, a timescale that Shell chief executive Jeroen van de Veer repeated six months later.

Now, company insiders say Shell is “still 12 months away from a decision”. Drawing up a final investment plan, when labor and equipment costs in the industry are soaring, was proving more difficult than expected, said a source.

A spokesman for Shell said a final decision was still “some way away, perhaps a year”, because issues such as construction costs and the falling dollar were impacting on costing the project. He said any political considerations would be taken into account.

The analysts say although Shell Petroleum Company brought up economic reasons for delaying this project, but the international sanctions and the mullahs’ regime’s political instability have been effective on this decision too.