BICOM

European Union member states have reached an agreement on the imposition of a ban on importing Iranian crude oil into the European Union. The ban would be implemented as part of the larger effort to cause Iran to desist from its programme of uranium enrichment and to cooperate with international bodies on its nuclear programme. However, while the EU has agreed to the ban in principle, no date has yet been set for its implementation. Some debate remains, according to an article by the Reuters news agency, on the timing of implementation. While some member states are for the immediate implementation of the ban, others are concerned at its possible impact on the European economy, as member states struggle with debt problems.

Iran currently supplies a total of 450,000 barrels of crude oil to EU member states per day, and is the second largest market for Iranian oil after China. The EU expects to experience little difficulty in finding alternative sources of oil. Nevertheless, The EU announcement yesterday led to a rise in crude oil prices.

US officials welcomed the announcement of the ban yesterday, and called on other purchasers of Iranian oil to significantly reduce the amount they buy. On New Years’ Eve the US announced new sanctions to cut institutions that work with Iran’s Central Bank off from the US financial system.

Iran, for its part, dismissed the announcement, saying that it was ready to make up the loss elsewhere. Mohsen Qamsari, Iran’s international director of the National Iranian Oil Co (NIOC) mentioned China, and other Asian and African countries as potential sources for selling the displaced volume of oil.