Last updated: 15 February, 2012

Iran holds off cutting oil to unruffled EU

Iran said on Wednesday it was considering cutting oil sales to six EU countries but would not do so “at the moment,” while unperturbed European officials said they were looking for other suppliers anyway.

State broadcaster IRIB reported on its website that the ambassadors of France, Greece, Italy, the Netherlands, Portugal and Spain were called to the foreign ministry in Tehran and warned that “Iran will revise its oil sale to these countries.”

The warning was in retaliation to an EU ban on Iranian oil imports that is being phased in as existing contracts expire up to July 1.

But after world oil prices spiked — in part because Iran’s English-language Press TV had reported Iran had already “cut” oil exports to those countries — media reported that no steps had yet been taken to reduce EU oil exports.

“Due to humanitarian reasons and the cold weather in the continent, it (Iran) will not do so at the moment,” Iran’s Arabic broadcaster Al-Alam said.

“We came to a conclusion to send a strong and serious message to the Europeans about our oil contracts,” IRIB quoted a foreign ministry official, Hassan Tajik, saying.

“Our message is that we can immediately replace our oil customers,” he said.

A diplomat from one of the EU embassies involved in the discussions with the Iranian foreign ministry said his ambassador had received no notification at all of any cut in Iranian oil sales.

“There was nothing like that,” he told AFP.

The European Commission said that, even if Iran did cut its sales to the European Union, it would make little difference as EU buyers were already switching suppliers.

“Oil is something you can get on the international markets, and Saudi Arabia said they would increase their production,” said Marlene Holzner, spokeswoman for EU energy commissioner Guenther Oettinger.

“What we hear from member states is that they will switch to other suppliers,” she said.

Iran is the second-biggest producer in OPEC, behind Saudi Arabia. It pumps some 3.5 million barrels a day, of which 2.5 million are exported.

The EU imported some 600,000 barrels of Iranian oil per day in the first 10 months of last year, mainly into Italy, Spain and the battered Greek economy, which benefits from advantageous terms.

Iran has previously threatened to cut off oil supplies to EU countries.

MPs last month initially threatened to pass a law cutting the exports at once, but backed away as parliamentary committees and other officials weighed into the matter.

Iran has reacted furiously to a promise by Saudi Arabia — a US ally and longtime rival in the Middle East — that it will step in to pump more oil to compensate for any loss to the market from curbed Iranian exports.

Such a move would be viewed as “unfriendly,” Tehran has warned.