Sunday, 1 July 2012

The Latest from Iran (1 July): The European Union Cuts Off Imports of Tehran's Oil

0735 GMT: European Union sanctions against Iran, agreed on 23 January, come into effect today. After months of arrangements to ensure supplies to replace Tehran's crude, notably to countries like Greece, Spain, and Italy, the EU will cut off all import of Iranian oil. Equally important, the Europeans are banning insurance cover for the Islamic Republic's tankers, affecting Iran's exports to other customers.

State news agency IRNA features the direct response of Minister of Oil Rustam Qassemi, "We are fully prepared to deal with oil sanctions." 

It is unclear, however, what steps Iran will be taking, as Qassemi's statement is a string of platitudes: "He expressed satisfaction with the sale of Iranian oil in world markets....Part of the oil sales to Europehad been discontinued before the start of sanctions....Some European customers are involved in oil development projects....It is not difficult to replace the sales to Europe....Due to the high quality of Iranian oil, it is always welcomed in the global market....We continue to sell to old, experienced customers with long-term contracts, and we will replace Europe with new customers.

First Vice President Mohammad Reza Rahimi added the allegation at a ceremony for National Industry and Mine Day, "Zionists are behind Iran sanctions and the US and other big powers are acting as the Zionists’ agents in this regard."

Beyond the rhetoric, there was one practical step announced on Saturday. Iran has asked for an emergency meeting of OPEC to discuss production levels. Ostensibly, that is because of a global oil price that has fallen below $100. In reality, Tehran is trying to cut back the increased output that is supporting the sanctions by replacing its exports.

from EA WorldView: EA Iran

Posted via email from lissping