With US set to reimpose sanctions, EU cuts Iranian oil imports
By Caoimhe Toman
Date: Friday 29 Jun 2018
(Sharecast News) - European refiners, worried about the US sanctions on Iran which are set to be more severe than those imposed in 2012, are cutting their imports of Iranian oil.
Washington announced new tariffs on Iran in May after it withdrew from the nuclear deal struck in 2015. It has also advised companies to reduce their activities with Tehran by November 2018 or risk exclusion from the US financial system.
Although Europe said it would stand by the nuclear deal, European purchases of Iranian oil are falling due to concerns about possible retaliations from the US.
Reuters reported one oil industry source saying: "These sanctions are going to be worse than under Obama. With him, you knew where you stood, how to navigate the sanctions [...] you never know with Trump. Everyone's afraid."
In total, Europe accounts for a fifth of Iran's daily 2.5m barrels of crude.
The media outlet also reported that Swiss lender Banque de Commerce et de Placements told its clients it would stop financing Iranian oil cargoes by the end of June. Spanish refiners Cepsa and Repsol also said they would be stopping imports from early July.
Key buyers Turkey and India, who had continued purchasing oil throughout the previous sanctions under the Obama Administration, may continue trading with the Subcontinent, although India is concerned about the risk of losing access to the US financial system.
Still, according to market analyst Naeem Aslam, Iran only needs to convince major buyer China to stay onside in order to keep its oil flow going: "If there is one thing on which many can agree on is this that China hasn't adopted its aggressive stance yet, it has many other high yielding option if the Trump administration continues to pressure China.
"Buying oil from Iran stands tall among other options. Thus, Iran is not in a horrible position at all. American allies do not hold the kind of relationship with Trump administration that they had during President Obama's term. Thus, bringing the Iranian oil export to zero may not be possible at all."
Bloomberg reported that Iran's OPEC governor Hossein Kazempour Ardebili said in an interview on Wednesday: "Korea, China, Japan have already expressed they cannot go for zero."
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