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Iran cuts oil exports to six EU countries

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Iran has stopped crude supplies to Spain, Italy, France, Greece, Portugal and the Netherlands, reports Iran’s Press TV.

­Tehran has fulfilled its threat to retaliate for the EU’s oil embargo, agreed by the bloc on January 26. The sanctions gave the EU members time till July to find new suppliers.

Officials within Iran immediately called to cork the black gold stream to Europe, targeting economies weakened by the ongoing financial crisis. On Wednesday, these calls became reality.

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Iran May Disrupt Hormuz Shipping, Supporting Oil, S&P Says

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By Ayesha Daya

Feb. 14 (Bloomberg) — Iran might respond to sanctions with “low-level provocation” such as slowing shipping through the Strait of Hormuz, keeping oil prices at their currently high level, according to three Standard & Poor’s reports.

Iranian authorities could disrupt supplies of oil from the Persian Gulf by imposing tanker inspections or boarding merchant ships in its territorial waters, supporting oil prices because markets would increasingly view armed conflict as “a real, if remote, possibility,” according to the reports’ authors, who include Paris-based Jean-Michel Six, S&P’s chief economist for Europe.

The likelihood of severe disruption of oil supplies through the strait, through which 20 percent of the world’s oil flows, is “very low,” though if one did occur, it might boost oil to $150 a barrel and push economies into a recession, according to the reports.

“For oil-producing sovereigns of the Gulf Cooperation CouncilSaudi Arabia, U.A.E., Qatar, Kuwait, Oman, and to a lesser extent, Bahrain — higher oil prices would actually be beneficial,” said Elliot Hentov, an S&P credit analyst in Dubai. “As oil exporters, they would receive more foreign earnings that they could either use to stimulate demand or improve their government’s balance sheets.”

The U.S. and the European Union are imposing tougher sanctions on Iran and Israel has talked of an attack on the Islamic Republic’s nuclear facilities in an attempt to halt its atomic program. Iran, which says its nuclear program is for civilian purposes, has threatened to block the Strait of Hormuz in retaliation.

The three S&P reports discuss the impact of rising Gulf tensions on Middle Eastern states seeking to borrow money, the risks that a closure of Hormuz would pose for companies looking for credit and the threats to global economic growth from an oil shock.

EU to study Iran energy action, China urges calm

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By Justyna Pawlak and Robin Pomeroy

(Reuters) – EU nations agreed on Thursday to examine sanctions on Iran’s energy sector over its nuclear program which could include an oil embargo championed by France and Britain.

China, the biggest buyer of Iranian crude, also stepped in on Thursday to warn against “emotionally charged actions” that might aggravate the row between London and Tehran over the storming of Britain’s embassy in the Iranian capital.

In Iran, diplomats said protesters had devastated parts of the embassy complex in Tehran. A commander in an Iranian militia which joined Tuesday’s ransacking said he was tired of decades of British “plotting” against Iran.

European Union foreign ministers meeting in Brussels said Iran’s energy, financial and transport sectors might be targeted in response to a report from the U.N. nuclear watchdog which suggested Iran has worked on designing an atom bomb.

They added 180 Iranian people and entities to a blacklist that imposes asset freezes and travel bans on those involved in the nuclear work which Tehran says is for peaceful purposes.

However, they appeared to postpone decisions on a ban on oil imports.

“The Council (of ministers) agreed to broaden existing sanctions by examining, in close coordination with international partners, additional measures including measures aimed at severely affecting the Iranian financial system, in the transport sector, in the energy sector,” they said.

DECISION DELAYED

Ministers said a decision would be taken no later than their next meeting in January. EU member states take 450,000 barrels per day of Iranian oil, about 18 percent of the Islamic Republic’s exports, much of which go to China and India.

But European Energy Commissioner Guenther Oettinger said all 27 EU countries would need to back any embargo. “We need a common position of all European Union member states,” he told Reuters on a visit to Moscow.

French President Nicolas Sarkozy proposed the embargo and won backing from Britain, but resistance persists. An import ban might boost global oil prices during hard economic times while debt-strapped Greece has been relying on Iranian oil, which comes with an attractive financing offer.

French Foreign Minister Alain Juppe said the EU could aim to offset any crude oil shortfall if a ban were imposed.

“Greece has voiced some concerns. We have to take them into account and work with the different partners so that the interruption of deliveries from Iran could be compensated by a rise in production in other countries,” he told reporters.

Britain shut down Iran’s embassy in London and expelled all its staff on Wednesday after pulling out its own diplomats. It said the storming could not have taken place without the consent of Iranian Islamic authorities.

However, British Foreign Secretary William Hague said the push for tougher economic action against Iran had nothing to do with the embassy incident.

“I stress that the measures I hope we will agree today are related to the Iranian nuclear program. These are not measures in reaction to what has happened to our embassy,” he told BBC radio before the Brussels meeting.

Britain’s uneasy relations with Iran date from long before the 1979 Islamic Revolution.

Brigadier General Mohammad Reza Naqdi of the Basij militia, which participated along with hardline students in the embassy incident, said Iranians “were tired of decades of London’s plots against Tehran,” the official IRNA news agency reported.

EU diplomats who visited the embassy in central Tehran told Reuters of severe damage. “I saw two rooms where you couldn’t see what they were. There was just ashes … It was devastating to see,” one said.

“You could tell the action was coordinated,” he added. A building that had not been used for years was untouched while the most important offices were gutted.

STAY RATIONAL, CALM AND RESTRAINED

With the diplomatic temperature rising, Beijing issued an appeal for cool heads. “China hopes that the relevant parties can remain rational, calm and restrained, to avoid emotionally charged actions that could intensify the dispute,” Foreign Ministry spokesman Hong Lei said in Beijing.

“Countries should … focus on the long term and the big picture. When encountering issues and conflicts, they should resolve problems through dialogue and consultations.”

Russia said the increasing tension and Western pressure were undermining the chances Iran will cooperate with efforts to ensure it is not seeking nuclear weapons.

“We speak out categorically against cranking up a spiral of tension and confrontation on issues linked with Iran. We believe that this … is fraught with severe consequences,” Foreign Ministry spokesman Alexander Lukashevich told a news briefing.

Russia and China approved four rounds of U.N. Security Council sanctions against Iran over its nuclear program, after working together to blunt tougher Western proposals.

The U.N. nuclear watchdog, citing intelligence reports, said last month that Iran appeared to have conducted research and experiments relevant to developing an atom bomb and may still be pursuing work to that end.

The nuclear program has raised the question of whether Israel might take military action against arch-foe Iran.

In Jerusalem, Defence Minister Ehud Barak said an Israeli attack was not imminent but all options remained open to stop what Israel sees as an Iranian bid to develop nuclear weapons.

“We have no intention, at the moment, of taking action, but the State of Israel is far from being paralyzed by fear,” Barak told Israel Radio. “It must act calmly and quietly — we don’t need big wars.”

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