The European Union (EU) is banning the importation of Iranian crude oil in the wake of a new U.S. law preventing refiners from paying for Iranian crude once they receive it. Never mind, Obama can issue waivers. Iran’s Fars News is warning US ships to not return to the Strait of Hormuz.
Diplomats said EU envoys had held talks on Iran in the last days of December, and that any objections to an oil embargo had been dropped – notably from crisis-hit Greece which gets a third of its oil from Iran, relying on Tehran’s lenient financing. Spain and Italy are also big buyers.
“A lot of progress has been made,” one EU diplomat said, speaking on condition of anonymity. “The principle of an oil embargo is agreed. It is not being debated any more.”
The embargo will force Tehran to find other buyers for oil. EU countries buy about 450,000 barrels per day (bpd) of Iran’s 2.6 billion bpd in exports, making the bloc collectively the second largest market for Iranian crude after China. Source.
The short story, the EU has the agreement but in theory, will the ban be carried out?
New sanctions signed into law by President Barack Obama on New Year’s Eve are aimed at disrupting Iran’s oil sales and seem to be having an impact already.
Any financial institution that works with Iran’s central bank will be cut off from the US financial system, blocking the main path for Iran to receive payments for its crude. Iran’s rial currency, which reached a record low on Tuesday, has fallen by 40% against the dollar in the past month. Reuters yesterday reported that queues formed at Tehran banks and some currency exchange offices shut their doors as Iranians scrambled to buy dollars to protect their savings.
Here’s the ‘but:’ Waiver-loving Obama can issue waivers to refiners in countries who he deems it proper (in the greater interest of the U.S.). Turkey is seeking a waiver.
U.S. officials have said they will discuss with allies how to implement the law without causing havoc in oil markets.
U.S. ally Turkey gets about 30 percent of its oil from neighbour Iran, and TÜPRAŞ – Turkey’s biggest crude oil importer, owned by its largest conglomerate, Koç Holding – is a big buyer of Iranian crude.
Jennifer Griffin on Fox News is reporting Iran’s warning to the U.S. that any air craft carriers returning to the Strait of Hormuz will be seen as an “act of war.”
A spokesman for the US Defence Department, Commander Bill Speaks, declined to discuss future movements of the carrier, the John C. Stennis. ”The deployment of US military assets in the Persian Gulf region will continue as it has for decades,” he said. Source.
“I advise, recommend and warn them (the Americans) over the return of this carrier to the Persian Gulf because we are not in the habit of warning more than once,” Fars quoted Ataollah Salehi as saying.
To be clear, I do not see the words “act of war” in any of the online printing regarding Iran’s threats to the U.S. It comes from Fox News Pentagon reporter Jennifer Griffin live. Graphic credit: GraphicMaps.com