Strasbourg, 18/01/2012 (Agence Europe) - The European Union may ban Iranian oil imports as from 1 July 2012. This will give member states the time to terminate existing contracts in accordance with the Danish Presidency proposal of 15 January, European diplomats announced to Reuters on Tuesday 17 January. Once the embargo is in place, member states would have until the end of June to fulfil existing contracts with Tehran and will have to cease all imports from July onwards. No new contracts will be authorised before July.
According to European diplomats, the Presidency intends to finalise discussions at the next meeting of EU foreign affairs ministers on 23 January, so that the agreement can be officially put into place in the days that follow the meeting.
According to one European source, no agreement has yet been reached. Greece is very dependent upon Iranian oil and has not yet given its agreement because it is still seeking alternative sources of supply. Spain is also very dependent on Iranian oil but according to a US diplomat in Spain, the country would approve this programme.
Although European governments have agreed on the principle of imposing an embargo on Iranian oil in an effort to put pressure on Tehran over its nuclear programme, the way in which this embargo is put into place, as well as the date, still need to be decided, in liaison with the oil markets. This Presidency compromise aims to find some common ground between countries such as France, for example, which would like to introduce a three-month deadline and, Greece, which would like a year-long implementation deadline. It also seeks to reassure certain member states about the economic impact of an embargo on their economies.
According to certain experts, a grace period for the existing contracts would weaken the impact of the embargo because 80% of purchases are made in long-term contracts.
Last year, the EU bought around one fifth of all Iranian oil, which means that together with China, it is the country's biggest purchaser of oil. (CG/transl.fl)