Stop oil supply to EU before the six-month deadline Iran urged

Stop oil supply to EU before the six-month deadline Iran urged
Published: 25 January 2012 (1246 Views)
TEHRAN. - Former Iranian Intelligence Minister Ali Falahian called on Tehran authorities to stop oil supply to the European Union member states before the bloc decides on banning oil imports from Iran. Speaking to FNA on Monday, Falahian pointed to a forthcoming meeting of the EU member states to impose an oil ban against Iran, and said European states need a 6-month time to find alternative sources for Iranian oil.

"The best way for us is to stop oil exports before the six-month deadline (announced by the EU) comes to an end and the oil embargo plan comes into effect so that crude prices go up and Europeans' US-driven plans for sanctioning our country's oil fall flat," Falahian stressed.

Meantime, he said that Iran can use the Strait of Hormuz as a means to confront growing pressures. The European Union is to meet next week to discuss new measures against Iran's oil exports and its financial sector.

A December meeting of the EU foreign ministers in Brussels failed to reach an agreement on such oil embargos against Iran. Despite long hues and cries about new sanctions against Iran, the EU and the US could only enlist some more Iranian officials in their sanctions list last month.

Several members of the European bloc voiced opposition to any sanctions on Iranian oil, pushing France, the most hawkish EU member, back. Crisis-hit Greece has said "No" to an EU oil ban on Iran, causing relief among other member states. Britain and France, the most hawkish EU countries, failed to convince other member states to impose oil embargos on Iran in the December meeting. Iran has also warned that if the US-led West sanctions Iran's oil exports, Tehran would close the Strait of Hormuz.

An estimated 40 percent of the world's oil supply passes through the waterway. Iran, the second-biggest Opec player after kingpin Saudi Arabia, produces about 2,3 million barrels of oil per day - 450 000 barrels of which is exported to the European Union, according to the US Department of Energy.

Manouchehr Takin, an analyst at the Centre for Global Energy Studies (CGES) research group, said a removal of Iranian oil exports would hurt Europe more than Tehran.

"The Europeans are importing nearly half a million barrels per day . . . Refineries in Greece, Italy and Spain are the main customers. They would suffer very much immediately financial loss (in event of sanctions) because they cannot easily replace that Iranian crude with other crude," he said in December.

"Financially, I think these refineries in Europe - especially those three countries that are having financial problems - would lose and suffer more than Iran would lose in finding other customers," Takin added.

Commerzbank analyst Eugen Weinberg agreed that sanctions would most affect the three eurozone nations which are in the grip of severe debt problems. Weinberg wrote in a research note "it remains to be seen whether this step (EU sanctions on Iranian oil supplies) is actually taken" as it would strike a heavy blow to the EU members.

"After all, crisis-ridden Italy, Spain and Greece rely on oil from Iran; an embargo would force them to source their oil requirements elsewhere at considerably higher prices."

The head of Opec said in December he hoped that the EU would not press for sanctions on Iran's precious oil exports. "I really hope there will not be an EU embargo on Iranian oil," secretary-general Abdullah El-Badri told the World Petroleum Congress in Doha.

"It will be very, very difficult to replace" the Iranian exports. "Europe now is facing some difficulties . . . so to cut these 865 000 barrels a day immediately, I think it will be a problem," he said, referring to the size of Iran's oil exports to all of Europe, not just EU members. Takin added that, in the event of EU sanctions, Tehran could find customers elsewhere for its oil. 

- Fars News Agency.

Tags: Oil, Iran, EU,
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