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Iran threatens to cut oil to more EU nations

Iran exports about 20 per cent of its crude to the European Union, most of which goes to Italy, Spain and Greece.



Tehran: Tehran will cut oil exports to more
EU nations if they remain "hostile," the deputy oil minister
who heads Iran`s state oil company said Monday, a day after
sales were halted to France and Britain.

Exports to Spain, Greece, Italy, Portugal, Germany and
the Netherlands would be stopped, Ahmad Qalebani said, quoted
by Mehr news agency.

"Certainly if the hostile actions of some European
countries continue, the export of oil to these countries will
be cut," said Qalebani, who runs the National Iranian Oil
Company.

He added: "In the current market situation, the price per
barrel (of oil) will probably reach USD 150."

Qalebani also said any country wanting Iranian oil would
be required to sign "longterm contracts". European companies,
he said, would be held to "two- to five-year contracts with no
preconditions."

Iran exports about 20 per cent of its crude -- some
600,000 barrels per day (bpd) -- to the European Union, most
of which goes to Italy, Spain and Greece.

Today, the oil ministry announced it had halted exports
to France and Britain.

That was in apparent retaliation for an EU-wide ban on
Iranian oil that is to come fully into effect July 1 as part
of Western sanctions against Tehran`s nuclear programme.

Although the ministry`s measure was largely symbolic --
France imports only around three percent of its oil from Iran,
and Britain less than one per cent -- prices for the black
stuff soared on fears Tehran could expand its cuts to other
European nations.

Iran has been threatening for weeks to cut all oil
exports to Europe because of the EU ban, but has thus far held
off. Ceasing all exports to the EU would harm its own economy
unless it had Asian buyers ready to pick up the contracts.

Oil prices hit nine-month highs today following the move
against France and Britain, with London and New York contracts
reaching USD 121.15 and USD 105.21 a barrel in Asian trading
hours -- the highest levels since May 5, 2011.

Later in London midday trade, Brent North Sea crude for
delivery in April stood at USD 120.55 a barrel, up 97 cents
compared with Friday`s closing level.

New York`s main contract, West Texas Intermediate light
sweet crude for March, jumped USD 1.61 to USD 104.85.

According to the International Energy Agency, Italy
sourced 13 per cent of its oil, or 185,000 barrels per day,
from Iran, while Spain imported 12 per cent of its oil needs,
or 161,000 bpd, and Greece bought 30 per cent of its needs, or
103,000 bpd.

Iran, OPEC`s second-biggest exporter after Saudi Arabia,
pumps 3.5 million bpd, of which it exports 2.5 million bpd.

Seventy per cent of the exports go to Asian countries,
China and India especially.

Last Wednesday, the foreign ministry held individual
meetings with the ambassadors of France, Greece, Italy, the
Netherlands, Portugal and Spain to explain to them that Iran
"will revise" oil sales to their countries.

The European Commission responded by saying that, even if
Iran did cut its sales to the European Union, it would make
little difference as EU buyers were already switching
suppliers, particularly towards Saudi Arabia.

PTI

From Zee News

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