Though EU Approves Ban on Iranian Oil Supplies, Demand Growing for Iranian Crude

Demand is growing for Iranian crude oil in Asian and African markets after the EU’s fresh decision on banning oil imports from Iran.

Iran is currently supplying 100% of Sri Lanka’s oil needs, 51% of Turkey, 25% of South Africa, 14% of Greece, 13% of Italy and Spain, 11% of India and China and 10% of Japan and South Korea’s oil demands.

The statistical figures of Iran’s oil exports proves that the US and EU oil embargo against Iran has little or no impact on demand for Iran’s oil in global markets.

The growing demand for Iran’s oil also shows that EU sanctions will leave no results but growth in global oil prices since India, China and South Africa have already demanded an increase in oil imports from Iran.

Mangalore Refinery and Petrochemicals Ltd, India’s biggest buyer of Iranian crude, announced earlier this month that it has not cut purchase of Iranian oil supplies despite the Untied States’ declared sanctions against Tehran.

Meantime, China made it clear last week that, whatever the commercial or political calculations driving ups and downs in its crude orders from Iran, it rejects in principle unilateral US sanctions.

“Iran is also an extremely big oil supplier to China, and we hope that China’s oil imports won’t be affected, because this is needed for our development,” Chinese Vice Foreign Minister Zhai Jun told a news conference in answer to a question about whether Beijing could curtail crude from Iran under US pressure.

“We oppose applying pressure and sanctions, because these approaches won’t solve the problems. They never have,” Zhai told the briefing about Wen’s six-day visit to Saudi Arabia, the United Arab Emirates and Qatar.

“We hope that these unilateral sanctions will not affect China’s interests.”

Earlier today, Dutch Foreign Minister Uri Rosenthal said that European Union foreign ministers agreed to ban oil imports from Iran starting July 1

“As of July 1, we have a ban on the import of oil and oil products from Iran,” Rosenthal said in Brussels.

New contracts on oil imports from Iran and extensions of existing deals will be banned under the embargo, EU diplomats said. Shipments under agreements already in place can continue until the end of June.

Diplomats said EU measures against Iran also include a freeze on Iranian central bank assets and a ban on petrochemical imports from May 1.

After the EU announcement, the oil price breached $110 a barrel this morning.

Analysts said the price jump could have been higher but was held down by mounting concerns about Greek debt and the global economic outlook, which would could reduce demand for oil.

Last week, Pirouz Mousavi, General Manager of Iran’s oil terminals in the National Iranian Oil Company denied media reports that Tehran is storing oil on tankers in the Persian Gulf.

He stressed that crude exports have not been disrupted amid mounting international pressure and sanctions.

“We do not have even one drop of oil (stored) in the Persian Gulf… Iran’s oil exports are taking place according to OPEC policies,” Mousavi stated.