'No' Exceptions to EU's July 1 Oil Sanctions on Iran
There will be "no" exceptions to the gamut of tough EU oil sanctions coming into effect against Iran on Sunday despite last-minute requests, a senior European Union official said Wednesday.
"As of July 1 there will be a complete termination" both of imports of Iranian oil and deals by EU insurers and re-insurers to provide liability insurance for the transport of Iranian oil, said the official, who asked not to be identified.
The oil embargo, agreed January 23 but gradually phased in until next Sunday's deadline, is expected to be "the most effective measure" in tandem with U.S. sanctions to secure progress in talks on Tehran's contested drive, the official said.
After an 18-month breakdown in talks between Iran and global powers on its nuclear program, Tehran offered to resume negotiations shortly after the January oil embargo decision.
"The sanctions are an important tool" in efforts to defuse international fears that Iran is developing a nuclear device, the source said.
European Union nations account for 20 percent of Iran's oil exports -- which bring in 80 percent of the country's foreign reserves -- while 85 percent of marine insurance, known as protection and indemnity insurance or P&I, is provided by EU firms.
So up until last week, the official said, countries heavily dependent on Iranian oil and EU P&I were clamoring for exemptions to the ban, he said.
"We understand the impact on partners, including strategic partners, but it was not possible to make exceptions," he said, without naming the nations that put in requests.
"We do not believe it would be appropriate to soften sanctions."
"As of July 1, ship owners and countries importing Iranian oil will have to go elsewhere, find alternatives," the source said. "Reducing oil imports (from Iran) would also reduce insurance."
Japan and China were Tehran's biggest oil customers, alongside India and the EU, with South Korea and South Africa also major buyers.
But Japan slashed Iran oil imports by 65 percent in April, turning instead to Saudi Arabia, India has announced an 11 percent cut, and South Korea has reduced them 40 percent.
It had been difficult for EU nations to find alternative sources, the official said.
Though only 10 EU nations were concerned, these included large buyers such as Italy and Spain, as well as cash-strapped Greece, which was buying a third of its oil from Tehran under exceptionally good conditions.
"Greece has found alternatives, including on the spot market," the source said.