European countries reduce oil purchases from Iran
Concerns about financial sanctions from the United States have led a number of European refiners to reduce their purchases of Iranian oil. Last week, India's largest oil refiner announced that it would stop buying oil from Iran.
Reuters, in a report published on June 6, reported a decrease in purchases of Iranian oil by major European oil companies, including France's Total.
A number of oil refineries in Europe have announced that they are unwilling to accept the possible consequences of an oil deal with Iran.
Reuters has assessed the reduction in oil purchases by European refineries as contrary to the policy of European countries to preserve and save the nuclear agreement. Despite the efforts of European governments to adhere to the requirements foreseen in the nuclear agreement, these oil companies have announced that they are unable to bear the financial risks arising from oil transactions with Iran.
Sanctions on oil transactions with Iran
On May 4, the Trump administration officially announced the US withdrawal from the nuclear deal. The US government has set a 180-day deadline for sanctions on Iranian oil transactions. This deadline expires on November 4.
According to the US government's forecast, oil companies have six months to find a suitable alternative to meet their oil needs and gradually reduce the volume of their oil purchases from Iran.
A senior official at Italy's Saras oil refinery said the company was unable to confront the US. "It's not clear what action the US government will take, but in practice it could be problematic for us," he told Reuters of the financial penalties and threats.
Refineries in many European countries, including France, Spain, Italy, and Greece, have announced that they will not purchase oil from Iran after the start of sanctions on Iranian oil on November 4.
The impact of Europe's reduced oil purchases
The European countries mentioned above are buyers of about a fifth of Iran's oil exports. These refiners, including the refinery affiliated with the French company Total and the Italian refiners Eni and Saras, have announced that they have signed long-term contracts with Iran to buy oil. However, they believe that it is not possible to continue buying oil from Iran after the sanctions are imposed.
According to statistics and information published by Reuters, the Islamic Republic of Iran currently exports about 2.5 million barrels of oil per day, most of which goes to Asian markets.
This comes while the Indian company Reliance Industries Limited, which owns one of the world's largest refining complexes, announced last week that it would stop buying oil from Iran.
According to a Reuters report, European refineries will meet their oil needs through Russia and Saudi Arabia after reducing oil purchases from Iran.
Source: DW
