Iran suspends oil exports to France, UK

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Iran exports 2.2 million barrels of oil a day, 18% of which is bound for European markets, according to the EIA.

STORY HIGHLIGHTS

  • Other customers will “replace French and British companies,” an Iranian oil ministry spokesman says
  • The EU sanctions are meant to force Iran to provide more information on its nuclear program
  • Iran exports 2.2. million barrels of oil daily, 18% of which is bound for European markets

Tehran (CNN) — Iran’s oil ministry announced Sunday that it had stopped crude exports to British and French companies.

The order came several days after Iran threatened to cut oil exports to some European Union countries in retaliation for sanctions put in place by the EU and the United States in January, a ministry spokesman said in a statement.

“Iran has no difficulty in selling and exporting its crude oil. … We have our own customers and have designated alternatives for our oil sales. We shall sell to new customers, who will replace French and UK companies,” ministry spokesman Ali Reza Nikzad-Rahbar said.

The sanctions put in place last month are meant to force Iran to provide more information on its nuclear program by shutting off its sale of crude oil, which generates half of Iran’s revenue.

The West believes Tehran may be trying to develop nuclear weapons, but Iran has long maintained that its nuclear program is solely for civilian energy production.

Iran exports 2.2 million barrels of oil a day, 18% of which is bound for European markets, according to the U.S. Energy Information Administration. The world consumes about 89 million barrels of oil per day.

Analysts last week said that if Iran suspends shipments to some European countries, it would only have a modest impact on oil prices.

Final details of the EU sanctions are still being worked out, and it’s expected that they will have a grace period of up to eight months, an EU diplomat told CNN last month

The grace period will allow European refiners to find new suppliers and Iran to find new buyers.

Analysts have said that while the new sanctions are the toughest ever imposed, they still contain many loopholes.

Iran is expected to still be able to sell its oil to places like China, India and other Asian countries, but perhaps at a discount of 10% to 15%. About 35% of Iran’s oil exports currently go to China and India.

CNN’s Shirzad Bozorgmehr contributed to this report.

By the CNN Wire Staff

February 19, 2012 — Updated 2258 GMT (0658 HKT)

Read more:

http://edition.cnn.com/2012/02/19/world/meast/iran-oil-exports/index.html?hpt=hp_t3

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2 thoughts on “Iran suspends oil exports to France, UK”

  1. Hey Arcanaintellego,
    Along the same lines,, In mid January, we warned that you might wish to “circle the date March 20, 2006” on your calendars in red. (This past week, June Crude Oil futures hit all-time highs!) That is when Iran, the world’s fourth biggest exporter of crude oil, planned to reportedly launch their new oil exchange, competing with both London’s IPE and New York’s NYMEX, both of which are owned by U.S. corporations. They also planned to be invoicing oil trades in euros not dollars. Petrol for euros is an echo of the 1970s petrodollars, but this time it would be petro-euros. Depending on the trading volume for Iran’s proposed oil exchange, this oil exchange might begin to spell serious trouble for the entire U.S. financial system. Iran’s oil and natural gas assets are estimated to be worth about $3 trillion.
    Thx.

    Reply

  2. Pingback: Misunderstanding Oil Economics « A SECOND CUP

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