US alone against Iran oil

US alone against Iran oil

US alone against Iran oil

AP photo

The United States is losing the fight to impose an embargo on Iran oil. The generally cooperative European Union as well as Turkey and the rising Eastern powerhouses such as China and India have failed to stand alongside the U.S. in its plans to implement sanctions on the Islamic republic.

“It is said there are some sanction decisions regarding oil imports taken by the EU and the U.S.,” said Taner Yıldız, Turkey’s energy minister, responding to a Hürriyet Daily News question at an energy meeting in Istanbul. “A United Nations decision would be binding for us,” the minister said. “No other decision except the U.N.’s would be binding for Turkey. “Tüpraş’s operations and imports from Iran continue, and we have no changes in our road map as of today,” said the minister. Turkey currently gets about 30 percent of its oil from its eastern neighbor.

“Turkey does not feel it is bound by any sanctions taken unilaterally or as a group, other than those imposed by Chapter 7 of United Nations charter,” Turkish Foreign Ministry Spokesman Selçuk Ünal told a news conference in Ankara yesterday. Turkey would check the content of new U.S. sanctions, he added.

Oil firms sign deal
Italian, Spanish and Greek companies have extended most of their oil supply deals with Iran for 2012, meaning the lion’s share of Iran’s supplies to the EU would likely be exempt from sanctions for at least the first half of the year.

Reuters quoted trading sources as saying Italy’s Saras, ERG and Iplom, Greece’s Hellenic, as well as Spain’s Repsol, have either extended or have not scrapped existing term supply contacts with Iran for 2012. “We kept our two-year deal with Iran,” said a trader with a refiner. “At the moment it is business as usual, but of course we are considering potential alternatives. Asking the Saudis for more crude is one possibility,” said a trader with an Italian company. Italy, Spain and Greece take 500,000 barrels per day (bpd) of the EU’s imports of Iranian oil of around 600,000 bpd, according to the latest available data.

Diplomatic sources told Reuters the three countries, the EU’s most fragile economies, were pushing for a grace period of up to 12 months as an immediate switch to oil from other producers may prove too costly and painful for them. Some diplomats said when EU foreign ministers meet Jan. 23 to decide on sanctions, they will most likely agree on a compromise of six months for the grace period and no longer.
Only existing deals would be granted that period, while new or spot deals would not be exempt from sanctions.

European entities will also be allowed to continue receiving repayments in oil for debts they are owed by Iranian firms.

“We expect a slow and gradual implementation of what will eventually become a full embargo,” said Mike Wittner from Societe Generale. “Europe has the same concerns about its fragile economy and an oil price spike as the U.S., probably even more so.”

Iran’s standoff with the West over its nuclear program has complicated Tehran’s oil exports and often prompts it to sell crude at steep discounts, appealing to struggling European refiners.

Most contracts are long-term annual supply deals and spot market sales are rare, as U.S. sanctions against Iran make quick and smooth trade finance at banks almost impossible.

The British Prime Minister David Cameron, meanwhile, is expected to visit the Saudi capital for talks with King Abdullah today, SPA state news agency reported.

Oil rises amid supply fears
Oil prices rose above $102 a barrel yesterday, following concerns a strike in Nigeria and heightened tension in Iran could threaten global oil supplies.

Benchmark crude for February delivery rose $1.27 to $102.14 a barrel by early afternoon in Europe in electronic trading on the New York Mercantile Exchange. The contract fell by $1.37 to settle at $100.87 in New York on Jan. 11.

A Nigerian union representing oil workers in Africa’s top crude supplier warned yesterday they planned to escalate their strike to back protests against an end to fuel subsidies.

Indian refiners not told to cut Iran oil imports

NEW DELHI – Reuters

An Indian oil ministry official denied yesterday that the government had asked refiners to reduce Iranian oil imports.

“We have not asked companies to cut imports from Iran,” Sudhir Bhargava, additional oil secretary, told reporters. He added India was looking for alternative supplies and that an existing payment mechanism was working.

India, Iran’s largest oil buyer after China, imports about 12 percent of its oil needs, or 350,000-400,000 barrels per day, (bpd) from Iran. The shipments are worth $12 billion annually. Industry sources told Reuters on Dec. 11 that the government had told refiners to reduce Iranian oil imports and find alternative supplies.

Japan to reduce Iran imports

TOKYO - The Associated Press

Japan pledged yesterday to buy less Iranian oil, boosting the U.S. campaign to sanction Iran over its nuclear program.

Iran’s “nuclear development problem can’t be ignored by the world, so from that perspective we understand the U.S. actions,” Finance Minister Jun Azumi told reporters after meeting with U.S. Treasury Secretary Timothy Geithner, who was visiting Tokyo after two days in Beijing. “We plan to start reducing this 10 percent share as soon as possible in an orderly manner,” he said.

Geithner said in Tokyo that the U.S. was working closely with countries around the world to increase the amount of pressure on Iran.”