Total Stops Buying Oil from Iran, Questions Impact of Boycott
French oil company Total (NYSE:TOT) has stopped buying oil from Iran, as ordered by new European Union sanctions. However, Chief Executive Christophe de Margerie is doubtful the sanctions will have much effect on Iran’s sales or on oil prices, said a Reuters report.
Iran exports 1.5 million of its 2.2 million barrel-per-day output to Asia, said de Margerie, so “Iran may give a discount to make it easier and quicker (to re route this oil) and nothing will change.”
There have been renewed warnings from some Iranians that they would prevent Arab oil from leaving the Gulf, along with threats of violence against U.S. targets if force is used to open blocked shipping routes.
“Even if we stop buying Iranian oil for some reason, the Saudis have sufficient capacity to match the gap,” said de Margerie. “I believe in this (Saudi) spare capacity, the market believes. This is why the oil price is flat and this is good news.”