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Rostam Ghasemi, Iran’s oil minister said they would definitely cut off oil supplies to unreceptive European states, but failed to state when and which countries they would specifically target. It might only be a symbolic one. Ghasemi’s statement has withdrawn from its earlier claims made by the parliament of blocking oil to all members of 27 nations European Union. Britain, France and Germany, the three countries who are the major participants in imposing oil sanctions on Iran buy very small amounts of oil from Iran. Last month’s ban led EU member states to stop Iranian oil imports over its controversial nuclear program. The July time limit is specifically for those countries that depend largely on Iran oil and need to look for alternative sources of oil. Greece, Spain and Italy, Iran’s biggest oil importers are assigned a stipulated period to find supplies from other oil rich states like Saudi Arabia, Russia and Iraq. Saudi Arabia has already showed its willingness to fill the gap caused by Iran oil sanctions. The less critical stance of Iran may be because European nations are the only bloc that pays for 600,000 barrels of oil a day imports in US dollars and Euros without any problem. Due to the oil sanctions, Iran is finding it increasingly difficult to recover oil prices in hard currency from Asian countries such as China or India. The financial sanctions imposed by EU and US, make it imperative for Iran to trade prices on oil in Indian rupees and Chinese renminbi. Mr Ghasemi also said that the country would not reconsider its nuclear program, whether or not the oil embargo went forward. It retracted from its statement of blocking the Strait of Hormuz, saying that it did not foresee any worries in the strategic waterway that operates one third of the world’s seaborne oil trade. Iran refused to bow down to US pressure even if they could not sell a single barrel of oil. However, they hoped for revision in the EU decision. It is waiting to be seen if Iran is able to replace its European customers since Asian countries like Japan, Turkey and South Korea have also showed their willingness to decrease oil imports from Iran. Ghasemi is expected to meet Chinese officials in a couple of days to discuss oil matters, considering China is Iran’s largest oil consumer. As a result of oil embargo and sanctions, the oil prices have become unstable in the market. The writer is an experienced journalist in oil related fields, who frequently writes articles related to oil prices & indexes and crude oil including tips on investment in oil. Please visit oil.com for more details.
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