European Countries Reduce Oil Purchases from Iran
Concerns about financial sanctions from the United States have prompted several European refineries to reduce their oil purchases from Iran. Last week, India’s largest oil refinery also announced it would halt oil purchases from Iran.
Reuters reported on June 6 (Khordad 16) that major European oil companies, including French Total, have reduced their purchases of Iranian oil.
Several oil refineries in Europe have announced they are unwilling to accept the potential consequences of oil transactions with Iran.
Reuters assessed the reduction in oil purchases by European refineries as contradicting European countries’ policy to preserve and save the nuclear deal. Despite efforts by European governments to comply with the obligations stipulated in the nuclear agreement, these oil companies have announced that they are unable to bear the financial risks resulting from oil transactions with Iran.
Sanctions on Oil Transactions with Iran
On May 4, the Donald Trump administration formally announced America’s withdrawal from the nuclear deal. The U.S. government set an 180-day timeframe for sanctions on Iran’s oil transactions. This deadline ends on November 4 (Aban 13).
According to U.S. government projections, oil companies have six months to find suitable alternatives to meet their oil needs and gradually reduce the volume of their oil purchases from Iran.
A senior official at Italian refinery “Saras” said the company is unable to confront the United States. Speaking to a Reuters correspondent about U.S. financial sanctions and threats, he said: “It is unclear what action the U.S. government will take, but in practice it could create problems for us.”
Refineries in many European countries, including France, Spain, Italy, and Greece, have announced that after the start of Iranian oil sanctions on November 4, purchasing oil from Iran is no longer possible.
Impact of Reduced Oil Purchases by Europe
The aforementioned European countries are buyers of approximately one-fifth of Iran’s exported oil. These refineries, including those affiliated with French company “Total” or Italian refineries “Eni” and “Saras,” have announced that they have concluded long-term contracts with Iran to purchase oil. Despite this, they believe it is not possible to continue buying oil from Iran after sanctions begin.
Based on statistics and information released by Reuters, the Islamic Republic of Iran currently exports approximately 2.5 million barrels of oil per day, with the majority heading to Asian markets.
This is while Indian company “Reliance Industries Limited,” which operates one of the world’s largest refinery complexes, announced last week that it would halt oil purchases from Iran.
According to Reuters’ report, European refineries will meet their oil needs after reducing oil purchases from Iran through Russia and Saudi Arabia.
Source: DW
