Sanctions on Iran disrupting its crude oil exports – EIA

01 March 2012 07:09  [Source: ICIS news]

Oil pumpSINGAPORE (ICIS)--Western-led sanctions imposed on Iran over its nuclear programme are disrupting the country’s crude oil exports, the US Energy Information Administration (EIA) said in a report late on Wednesday.

Both the US and the EU have acted to tighten sanctions against the Islamic Republic, including measures with both immediate and future effective dates, the EIA said in a statement.

“These measures may already be causing some adjustments in oil supply patterns,” the EIA said.

“There is emerging evidence that some shipments of Iranian crude oil under existing contracts are being curtailed due to the unwillingness of US and EU insurance providers to cover them,” it said.

Iran said on 19 February that it had halted oil exports to Britain and France ahead of sanctions by the EU that require existing oil contracts to be completely phased out by 1 July this year.

In December last year, the US Congress passed a new bill that will apply sanctions to all financial institutions engaging in direct dealings with Iran’s central bank from 1 July.

The sanctions imposed on Iran are aimed at hampering the country’s ability to finance its nuclear weapon programme. Iran has denied that it is trying to build nuclear weapons. 

Iran is the world’s fourth largest oil producer and third largest oil exporter with exports last year totalling around 2.6m bbl/day.

Growing concerns over Iranian crude exports follows a string of supply interruptions in the last two months, including production drops in South Sudan, Syria, Yemen, and the North Sea, according to the EIA.

The EIA added said that global spare crude oil production capacity is “quite modest by historical standards”, especially in the context of current geopolitical uncertainties not limited to in Iran.

The EIA is an independent arm of the US Department of Energy.

By: Nurluqman Suratman

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