Iran General NewsEU looks at banning Iranian oil

EU looks at banning Iranian oil

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Wall Street Journal: European Union officials will weigh next week a French-led effort to ban Iranian oil imports in what would mark an unprecedented step against the world’s third-largest oil exporter over its alleged nuclear-bomb program.

The Wall Street Journal

By LAURENCE NORMAN, MAX COLCHESTER and BENOIT FAUCON

BRUSSELS—European Union officials will weigh next week a French-led effort to ban Iranian oil imports in what would mark an unprecedented step against the world’s third-largest oil exporter over its alleged nuclear-bomb program.

EU foreign ministers will meet Thursday to try to hash out a political consensus on the measure. Teams in Brussels are already meeting to study implementation issues, diplomats said.

“There is a real intent to do this and this is a sector where the Iranians would really be hurt,” said one Brussels official.

Brussels diplomats cautioned that any final decision was at least a few weeks away and that it was too early to gauge potential opposition in the 27-member body.

The push for wider sanctions on Iran comes after an International Atomic Energy report earlier this month said the agency was “profoundly and increasingly worried” about Iran’s alleged attempt at building a nuclear weapon. Iran says that its nuclear program is for peaceful purposes.

EU officials say efforts to engage Iran diplomatically on its nuclear program have gone nowhere since talks in January, necessitating increased pressure.

While the U.S. government has banned all trade and financial transactions with Iran since 1995, France and other European Union members still trade with Iran. Sanctions imposed by EU countries, like those adopted by the United Nations, center on banning exports to Iran of weapons and of goods that can be used in weapons manufacturing.

Still, the EU has gradually tightened some sanctions in recent years in response to Iran’s alleged nuclear efforts, barring companies such as Royal Dutch Shell PLC and Total SA from undertaking upstream investment in the country.

The EU earlier this year banned oil imports from Syria, but Iran is a far bigger source of oil into Europe, accounting for as much as 18% of the imports of some European countries.

Some experts said the cost of sanctions designed to hurt Iran’s economy could still boomerang on Western consumers. The move “would tighten the European crude market considerably and lead to even higher prices for medium-sour crude,” Vienna-based consultancy JBC Energy GmbH said in a note this week.

Oil prices were calmer Friday after spiking the day before on headlines that France planned a unilateral embargo on Iranian crude. French officials later clarified their position to say they would work through the EU. On Friday, a French diplomat reiterated the need for “unprecedented” sanctions on Iran and said the country’s diplomats were lobbying their colleagues in the EU.

“What concerns us is not the price of petrol in France; it’s a report that says Iran is working on nuclear weapons,” the French Foreign Ministry spokesman said.

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