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EU to sanction Iran’s central bank, unable to finalise oil embargo
European Union nations yesterday agreed to sanction Iran’s central bank, freezing assets used to finance its nuclear programme, but have yet to settle an oil embargo deal that could damage debt-hit European economies. “The text was considered closed and agreed,” a diplomatic source said of the proposed financial sanctions, following talks between senior diplomats from the 27 EU nations.
Diplomats have held lengthy meetings this week in Brussels to agree a deal on a financial embargo against Tehran, which will be formally adopted at talks between EU foreign ministers on Monday. However, Greek concerns have held up a final deal on an oil embargo. Sanctions against Iran’s oil sector will now be negotiated Monday morning, shortly before of the foreign ministers’ meeting.
The EU imported approximately 600,000 barrels of Iranian oil per day last year, according to the International Energy Agency, making it a key market alongside China, which has refused to bow to pressure from Washington.
The problem for European envoys has been to agree the implementation of an embargo that gives nations dependent on oil deliveries from Tehran time to phase out existing contracts. These include European states that have been most affected by the EU debt crisis. Last year, according to the latest EU statistics, Iranian oil accounted for 34.2 per cent of Greece’s total oil imports, 14.9 per cent of Spain’s and 12.4 per cent of Italy’s in the first nine months.
Some countries, including Britain, France and Germany, want a three-month deadline, whereas financially stressed nations such as Greece, Italy and Spain were requesting up to a year.
Saudi Arabia has said it would step-up production to offset the loss of Iranian crude. The Kingdom’s Oil Minister Ali al-Naimi said this week that the countries output could be boosted by around 2.6 million barrels a day to offset a potential cut in Iranian exports. However, an increase in Saudi output is not a long-term solution and oil prices could still increase, disrupting EU economic recovery.