The caution reflects concern that buyers don’t yet know the scale of reductions required, nor whether condensate -- a light crude -- will be included in the sanctions. In any event, Donald Trump’s move is likely to unleash a furious lobbying effort by European governments -- which continue to back the deal with Tehran -- to win exemptions for a region that buys about a third of Iran’s oil.
Previous sanctions on Iran’s oil industry were lifted less than 2 1/2 years ago. Those penalties had been imposed by the EU as well as the U.S., whereas the latest restrictions have been made unilaterally. While the EU is likely to resist, a principal concern is how the fresh curbs will affect the banking and insurance industries, key to purchasing and shipping crude around the world.
The U.S. move will probably have “significant ramifications for maritime trade with Iran and the insurance of such trade,” said the International
Group of P&I Clubs, whose members cover about 90 percent of the world’s tankers against risks including oil spills. Clarification from the remaining signatories to the nuclear deal will be crucial in helping traders and refiners navigate the fallout, the insurers’ group said.
EU refiners imported 421,000 barrels a day of Iranian crude last month, while Turkey purchased 252,000 barrels a day, according to data from cargo-tracking company Kpler. Among the EU countries, Italy was the biggest buyer with 245,000 barrels a day.
Italian refiner Saras SpA declined to comment on the potential implications of the U.S. pull-out, beyond saying “we are extremely flexible in terms of supply” and can “cope with changes on the supply side if required.”
France’s Total SA declined to comment, while Spain’s Repsol SA and Greece’s Hellenic Petroleum SA weren’t immediately able to respond. Spain’s Cepsa said: “We strictly conform with EU and international
laws and regulations, and scrupulously respect any trade restriction.”
Europe could potentially take more crude from Iraq, Libya, Saudi Arabia and West Africa to replace Iranian supplies, energy consultant FGE said last week, adding that the biggest impact on Iranian flows would probably be felt next year if sanctions waivers aren’t renewed.
For now, tankers continue to carry Iranian crude to Europe. About 5 million barrels are on their way to France’s Le Havre and Fos-Sur-Mer refineries, while 2 million barrels are en route to Saras’s Sarroch refinery in Italy, Kpler data show.