EU Says It Has Enough Oil Stocks as Nations Cut Iran Imports

The European Union said the bloc’s nations are reducing purchases of oil from Iran and have enough reserves to face potential supply disruptions even if the Persian Gulf country halts crude sales before an EU embargo enters into force on July 1.

Some of the EU’s 27 nations have already stopped purchasing oil from Iran and others are buying less, according to Marlene Holzner, energy spokeswoman for the European Commission, the EU executive. Her comments come after the Iranian Oil Ministry’s news website reported the country halted oil sales to French and British buyers to pre-empt the EU ban.

“The U.K., Austria and Portugal had stopped already before that to import from Iran,” Holzner said by e-mail today in response to questions from Bloomberg. “For France, we have no official confirmation, but the French company Total said it stopped imports.”

The U.K., Austria and Portugal did not import any oil from Iran in the period from January to September 2011, according to EU data. Belgium, the Czech Republic and Netherlands, which bought a total of 2.38 million tons of Iranian crude in that period, have now stopped purchases and Italy, Spain and Greece are currently reducing imports, Holzner said.

The EU decided on Jan. 23 to ban imports of Iranian oil as of the beginning of July because of concerns that Iran is developing nuclear weapons. The five-month phase-in period, during which existing contracts are allowed to continue, is meant to give member states such as Greece that are relatively dependent on Iranian crude time to find alternative supplies.

Long-Term Contracts

Iran threatened to halt oil shipments to Italy, Spain, Portugal, Greece, France and the Netherlands when it summoned their ambassadors to the Foreign Ministry on Feb. 15 to protest the EU’s punitive measures, state media reported. Iran would end sales of crude to the six countries unless they agreed to long-term contracts and payment guarantees, state-run Press TV reported that day, without citing anyone.

Iran “will give its crude oil to new customers instead of French and U.K. companies,” the Oil Ministry’s news website Shana reported, citing Alireza Nikzad Rahbar, a ministry spokesman. France got 4 percent of its oil imports from Iran in the first half of last year, while the U.K. bought 1 percent, according to the U.S. Energy Information Administration.

European nations together bought a total of 22.4 million tons of oil from Iran in the first nine months of last year, accounting for 5.8 percent of the bloc’s external crude imports, according to the EU data. Greece ranked first, having purchased 4.14 million tons from Iran, or 34 percent of its oil imports.

Emergency Stocks

Current EU emergency stocks are at 136 million tons, equivalent to 120 days of consumption, or 4.5 years of the region’s imports from Iran, Holzner said, adding that so far no member state has asked for a release of reserves. EU rules require countries to hold emergency fuel stocks of at least 90 days of the average daily domestic consumption in the previous calendar year.

“The continuity of supplies of crude oil and petroleum products to European consumers should therefore not be immediately affected, even in case of an abrupt halt of all imports from Iran,” Holzner said. “The commission continues to monitor the situation and stands ready to respond if needed.”

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