EU fears on Iran oil embargo

TEHRAN, Dec.3 (MNA)--European Union(EU) nations’ meeting failed to reach any decision to halt the purchase of oil from Iran, over the fear of hurting the EU economy. At the EU foreign ministers' meeting in Brussels on Thursday (1 December) France proposed the Iran oil ban. But one EU diplomat said the Greek opposition was welcomed by many EU capitals: "People don't say it out loud. But there is an understanding oil sanctions would hurt the EU rather than hitting Iran where it hurts and would make oil cheaper for China." Greece as late as 2010 bought just 16 percent of its oil from Iran and the rest from Russia, Saudi Arabia, Kazakhstan, Libya and Iraq. But it now relies almost 100 percent on Iran, as international oil traders shun it for fear of a national default. “Greece has a certain number of reservations,” said French Foreign Minister Alain Juppe. Iran accounts for about 5.7 percent of Europe’s oil imports, while Greece recently stepped up its purchases of Iranian oil because other suppliers were suspicious of the nation’s credit. It’s obvious that several EU states are hesitant to extend the sanctions to an oil embargo against Iran. Petroleum analysts have also warned that global energy prices would rise even further if, and when, an oil embargo is imposed on Iran. The tumult in the Muslim world has already pushed up oil prices this year to record level, with the rebellion in Libya boosting the price of European benchmark Brent crude to more than $125 a barrel in April. “The energy sector is certainly an area that has to be worked on and the financial area overall,” said German Foreign Minister Guido Westerwelle to Bloomberg BusinessWeek. “There are links to Europe that from our perspective have to be severed.” Speculation of Iran oil sanction, up crude 37% since October Crude oil has had a good run since October, rallying approximately 37% from $75.36 to $103 a barrel on 17 November, as geopolitical concerns arising from U.S. and EU sanctions against Iran fuelled speculation that oil could experience a supply shock reminiscent of the Iranian Revolution of 1979. Experts ask while the speculation over the proposed plan of Iran oil sanction has driven crude oil up 37%, how much it will go up if the rhetoric sanctions would be enforced? In opinion of experts, a geopolitical concern with Iran serves a powerful platform for crude oil to test new highs. China Urges Calm In other hand, while the European Union tightened sanctions against Iran on Thursday and laid out plans for a possible embargo of its oil, China, the biggest buyer of Iranian crude, stepped in to warn against "emotionally charged actions" that might aggravate the row. EU member states take 450,000 barrels per day of Iranian oil, about 18 percent of the Islamic Republic's exports, much of which go to China and India. French President Nicolas Sarkozy proposed the embargo and won backing from Britain, but resistance persists. An import ban might raise global oil prices during hard economic times and debt-strapped Greece has been relying on Iranian oil, which comes with an attractive financing offer.