Thursday, January 26, 2012

Iranian parliament to debate immediate cut in oil exports to Europe

By Aresu Eqbali in Tehran

January 26, 2012 - Iran's Majlis, or parliament, is considering a plan to cut oil exports to Europe before an EU embargo comes into effect on July 1 and will start an open debate on the motion on January 29, two deputies said January 25.

"This bill will oblige the government to stop sales of oil to Europe before the European Union starts Iran's oil exports sanctions," Hassan Ghafourifard told parliamentary news agency ICANA.
"If Iran's oil is sanctioned by the European Union, Iran doesn't have to sell its oil to Europe," he said.

The bill will be debated in parliament in a public session on January 29, he said.

Another member of the Majlis energy committee, Naser Soudani was quoted by the semi-official Fars news agency as saying that the move was supported by a number of deputies.
"Together with several other members of parliament, we are pressing to approve a plan, whereby all the European countries which have targeted Iran with sanctions, will not be able to buy one drop of oil from Iran," Soudani said. "The oil tap will be turned off to them so that they don't play with fire any more."

EU foreign ministers on January 23 approved an embargo on Iranian oil exports to Europe from July 1. Iran exports around 450,000 b/d to Europe, according to the International Energy Agency. Iran's NIOC has put total exports at 2 million b/d.

The move by the Majlis, which is dominated by conservatives, follows a call by a former intelligence minister and prominent cleric, who suggested January 23 that oil exports to Europe be halted before the embargo comes into force.
"In the next part of the game that Europe has started, it will burn in the oil wells of Iran and the damage of the plan they worked out [for us] will be inflicted on them," Soudani said.

"The first reason is that some European countries have no other way but to buy oil from Iran and their refineries are compatible with the specifications of Iran's oil and it's difficult for them to replace Iranian oil," he added.

The second reason, he said, was that the sanctions will lead to higher prices and "the Europeans will have to buy oil at a higher price, and the third reason is that the Europeans...will have to buy Iranian oil indirectly through middlemen and this will add to their costs."
Iran's oil ministry and the state-owned National Iranian Oil Co. have said the country has contingency plans and can divert its exports to other markets.

The OPEC state's biggest market is Asia, with China the single biggest buyer of crude oil and also the biggest foreign investor in Iran, where Chinese state-owned companies are involved in a number of multi-billion dollar upstream projects.

Soudani said that should China join the sanctions against Iran, it would be thrown out of the projects.

"In the economic arena, we are witnessing a confrontation of powers. But India has announced that it can't do without Iran's oil," Soudani said.

"And if China enters the phase of sanctions ... it will be [removed] from all of its projects in Iran. This will inflict heavy and considerable loss on China's economy," he

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