Iran halts oil sales to France and Britain

Iran has halted its limited oil sales to France and Britain in retaliation for a phased EU ban on Iranian oil that is yet to take full effect, the oil ministry said yesterday.

“Oil sales to British and French companies have ceased,” spokesman Ali Reza Nikzad Rahbar said in a statement on the ministry’s official website. “We have taken steps to deliver our oil to other countries in the place of British and French companies.”

The decision was not expected to have a big impact. France last year bought only 3% of its oil — 58,000 barrels a day — from the Islamic republic, and Britain was believed to be no longer importing Iranian oil. But it was seen as a warning to EU nations that are bigger consumers of Iranian oil.

The semi-official Mehr news agency said the National Iranian Oil Company has sent letters to some European refineries with an ultimatum to either sign long-term contracts of two to five years or be cut off.

Mehr did not specify which countries were sent the ultimatum, but Spain, Italy and Greece are among Europe’s biggest buyers of Iranian oil.

Although those countries were not affected by Iran’s announcement yesterday, they are included in an EU decision to stop buying Iranian oil that was announced last month and which will take full effect from July.

The EU move was part of a ratcheting up of Western economic sanctions on Iran over its disputed nuclear programme. Many Western nations fear the programme masks a drive to develop nuclear weapons, but Tehran denies that.

According to the International Energy Agency, Italy sourced 13% of its oil, or 185,000 barrels per day, from Iran, while Spain imported 12% of its oil needs, or 161,000 bpd, and Greece bought 30% of its needs, or 103,000 bpd.

Iran, OPEC’s second-big-gest exporter after Saudi Arabia, pumps 3.5m bpd of which it exports 2.5m barrels — 70% of the exports go to Asian countries, China and India especially.