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Ecuador to Buy Iranian Fuel in Defiance of Western Sanctions

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July 18 (Bloomberg) -- Ecuador is in talks with Iran to buy $400 million of fuel amid growing efforts by the U.S. and European Union to crack down on the Islamic republic’s crude sales.

Ecuador’s central bank President Pedro Delgado said negotiations are still underway though insisted his government is free to trade with whomever it wishes.

“Ecuador is a sovereign nation and can have relations with any country in the world,” Delgado told reporters in Quito today.

Ecuador’s President Rafael Correa is among a number of allies of Venezuela’s Hugo Chavez that have courted closer economic and diplomatic ties with Iran in the face of Western-led sanctions. Iranian President Mahmoud Ahmadinejad visited Quito on a four-nation tour of Latin America in January, and the two countries have pledged to build a refinery together in South America’s fifth-biggest oil producer.

Ecuador, a member of the Organization of Petroleum Exporting Countries, is trying to guarantee gas supplies as the country’s biggest refinery is scheduled to go offline in October for about a year of maintenance work.

The U.S., which accuses Iran of seeking to develop a nuclear weapon, sanctioned the National Iranian Tanker Co. and four alleged front companies for Iran’s oil trade on July 12 in its latest bid to curtail the country’s petroleum sales until it abandons illicit aspects of its disputed nuclear program.

The U.S. action doesn’t impose penalties on non-U.S. companies that continue to do business with NITC.

The EU, building on sanction by the U.S. and United Nations, embargoed the nation’s oil and banned EU companies from insuring its crude shipments this month.

Iran says its nuclear program is for peaceful energy and medical purposes.

Iran’s crude exports fell to 1.88 million barrels a day in May from 1.905 million barrels in April, according to data posted on the website of the Joint Organization Data Initiative.

To contact the reporter on this story: Nathan Gill in Quito at ngill4@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net

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