Wall Street Journal on January 23, 2012, reported that European Union foreign ministers the same day approved an oil embargo on Iran, thus taking the EU’s strongest measures yet to press the Islamic Republic over its nuclear program. Excerpts below:
Citing “serious and deepening concerns,” the EU agreed to impose a full embargo on Iranian oil, including existing contracts, by July 1. Other new sanctions targeted the Central Bank of Iran and Iranian petrochemical exports to the EU, according to a statement by the Council of the European Union.
The embargo comes as the U.S. and the EU expand efforts to starve Iran of oil revenue, amid fears that Iran is moving toward development of a nuclear weapons, despite Tehran’s assertions that its nuclear program is for peaceful purposes.
The EU’s move is already cause adjustments in the oil market. Refiners in Spain and Italy have already begun to phase out some Iranian oil purchases in anticipation of the embargo; those efforts promise to increase as the July deadline approaches.
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It is estimated that the EU imported 600,000 barrels a day of oil from Iran from January to October 2011.
Much of the EU is looking to the other suppliers in the Persian Gulf to fill that gap. The Spanish government said Monday that Saudi Arabia will make up for the loss of Iran’s oil supply.
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The EU decision is likely to further squeeze an Iranian economy already under pressure from the effect of Western sanctions. Iran’s currency, the rial, fell 10% to a record low following the EU decision, Reuters reported.
The EU pledged on January 23 to continue with its “dual track” approach—enacting sanctions on the one hand, while remaining open to negotiations on the other.
The move comes as U.S. officials also apply pressure on consumers of Iranian oil, including China, India and other Asian countries, to trim Iranian imports.
