Brussels, 02/07/2012 (Agence Europe) - Not a drop of Iranian oil can now be brought into the EU legally. The European ban on imports from the world's third oil largest exporter that was agreed at the end of January to put pressure on Tehran to suspend its nuclear programme, came into effect on Sunday 1 July.
The EU is thus foregoing 600,000 barrels of Iranian crude per day. Member states have, of course, had five months to find alternative supplies, which will come from Saudi Arabia principally, Iraq and Libya. Iran has accused its fellow oil cartel, OPEC members, of exceeding their overall quota of 30 million barrels per day and on Sunday called for an emergency meeting of the organisation.
Not only has the European decision not brought a spike in prices, the price of crude has in fact fallen by 21% since March to below $90 per barrel this weekend, far below the record of $143 per barrel in June 2008. In addition to the loss of the European market, to which it exported 20% of its oil, Iran has been hit by the ban on EU insurance companies, which cover 90% of global maritime oil traffic, underwriting the transport of Iranian oil, which generates 80% of the country's export revenue. According to the International Energy Agency (IEA), Iranian exports have fallen by 40% over the last six months to 1.5 million barrels a day, the lowest since 1992. The effect of this drop-off has been to completely fill up Iran's storage capacity, the IEA says, forcing the country to reduce production. (EH/transl.rt)