IRAN has suspended crude oil shipments to British and French companies, in its response against the European Union after the bloc imposed sanctions on Iran's crucial fuel exports.
The EU in January decided to freeze of the country's central bank assets and an oil embargo set to begin in July over its disputed nuclear programme, which the West says is aimed at building bombs. Iran denies this.
“Exporting crude to British and French companies has been stopped,” spokesman Alireza Nikzad said in a statement on Iran’s Ministry of Petroleum website.
Iran exports 2.2 million bpd, 18 per cent of which is bound for European markets, according to the US Energy Information Administration (EIA). About 35 per cent of Iran's oil exports currently go to China and India.
However, the Iranian action was not likely to have any significant direct impact on European supplies because both Britain and France had already moved last year to sharply curtail oil purchases from Tehran to less than three per cent of their daily needs.
The 27-nation EU, which accounts for about 18 per cent of Iran's oil exports, said earlier it would not be short of oil if Iran stopped crude exports, as they have enough in stock to meet their needs for around 120 days.
"We have our own customers ... The replacements for these companies have been considered by Iran," Nikzad said.
The OPEC-state 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 per cent to 15 per cent.
Saudi Arabia says it is prepared to supply extra oil either by topping up existing term contracts or by making rare spot market sales but Iran has criticised Riyadh for the offer.
Brent crude oil prices were up US$1 a barrel to US$118.35 shortly after Iran's state media announced last week that Tehran had cut oil exports to six European states. The report was denied shortly afterwards by Iranian officials.
Oil News | Middle East
Subscribe to this comment's feed
