EU Set to Announce Iranian Oil Sanctions on Monday
The European Union will announce sanctions on Iran’s oil industry on Monday, banning the import of Iranian oil to the 27-member union and cutting off the source of roughly 18 percent of Iran’s oil revenue.
Iran exports roughly 2.2 million barrels of oil a day, of which 18 percent is bound for European markets, according to the U.S. Energy Information Administration. The Iranian government gets roughly half of its revenue from oil exports.
In addition to the embargo on Iranian oil, the European Union will also restrict Iran’s trade in gold and precious metals, as well as freeze certain financial assets.
Details of the embargo are still being hammered out… …but the sanctions will likely have a grace period of three to eight months, according to sources involved in the discussions. The grace period would give European refiners time to find new suppliers and give Iran time to find new buyers.
The widely expected move follows similar actions by the U.S. and U.K. aimed at increasing pressure on Tehran to give up its nuclear program, which Iran says is for peaceful purposes but many suspect may be intended to develop nuclear weapons.
But though analysts say the new sanctions are the toughest imposed, they contain many loopholes.
Iran will still be able to sell oil to China and India, which together consume about 35 percent of Iran’s oil exports, as well as other Asian countries, though perhaps at a 10 percent to 15 percent discount.
Iranian exports comprise nearly 2.5 percent of the world’s oil supply, and Western leaders are worried that cutting Iran off from the market could send crude and gasoline prices skyrocketing.
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