EU Oil Embargo

EU oil embargo on Iran comes into effect

The European Union's embargo on Iranian oil has gone into effect, provoking anger in Tehran but being welcomed in Washington.

SBS,

2 July, 2012

A European Union embargo on Iranian oil has gone into effect, provoking anger in Tehran, which says the measure will hurt talks with world powers over its sensitive nuclear activities.

Oil Minister Rostam Qasemi sought to downplay the embargo as just the latest punishment in decades of ineffective sanctions.

Iranian leaders have insisted they will forge ahead with their atomic program, regardless of the Western restrictions and others imposed by the UN Security Council.

But the White House welcomed the implementation of the EU embargo on Sunday, calling it "an essential part" of an international response to Tehran's nuclear program.

"This action is an essential part of our concerted diplomatic efforts to present Iran with a clear choice between isolation or meetings its obligations," President Barack Obama's press secretary, Jay Carney, said.

"With this decision, our partners in the EU have underscored the seriousness with which the international community views the challenge of Iran's nuclear ambitions," Carney said.

Oil market observer bodies and analysts say the embargo, coupled with US financial sanctions ramped up on Thursday, are gutting Iran's vital oil exports, which account for half of government revenues.

The International Energy Agency (IEA) says Iran crude exports in May appear to have slipped to 1.5 million barrels per day (mbpd) as the market braced for the embargo, which has been phased in since being announced January 23.

That is far less than the 2.1-2.2 mbpd Iran insists it continues to sell abroad.

"The sanctions have had no effect on Iran and will have none," Qasemi was quoted as saying on Sunday by the ISNA news agency.

"I do not see a problem in our enemies starting the sanctions as of today, since these sanctions have existed for many years and nothing has happened and one should not anticipate anything new," he was also quoted as saying on Sunday on the website of state broadcaster IRIB.

Qasemi and other officials admitted the "illogical" embargo had reduced exports to EU nations, but they said other nations had stepped forward to buy the oil.

"While we collectively exported 18 per cent of our oil to them before, it is not difficult to substitute customers for this much oil in the world," Qasemi said.