Archive for Monday, February 20, 2012

Iran cuts oil exports to Britain, France

February 20, 2012


— Iran has halted oil shipments to Britain and France, the Oil Ministry said Sunday, in an apparent pre-emptive blow against the European Union after the bloc imposed sanctions on Iran’s crucial fuel exports.

The EU imposed tough sanctions against Iran last month, which included a freeze of the country’s central bank assets and an oil embargo set to begin in July. Iran’s Oil Minister Rostam Qassemi had warned earlier this month that Tehran could cut off oil exports to “hostile” European nations. The 27-nation EU accounts for about 18 percent of Iran’s oil exports.

However, the Iranian action was not likely to have any significant direct impact on European supplies because both Britain and France had already moved last year to sharply curtail oil purchases from Tehran to less than 3 percent of their daily needs.

The EU sanctions, along with other punitive measures imposed by the U.S., are part of Western efforts to derail Iran’s disputed nuclear program, which the West fears is aimed at developing atomic weapons. Iran denies the charges, and says its program is for peaceful purposes.

The spokesman for Iran’s Oil Ministry, Ali Reza Nikzad-Rahbar, said on the ministry’s website Sunday that “crude oil exports to British and French companies have been halted.”

“We have our own customers and have no problem to sell and export our crude oil to new customers,” he said.

Britain’s Foreign Office declined comment, and there was no immediate response from French officials.

The semiofficial Mehr news agency said exports were suspended to the two countries Sunday. It also said the National Iranian Oil Company has sent letters to some European refineries with an ultimatum to either sign long-term contracts of two to five years or be cut off.

Mehr did not specify which countries were sent the ultimatum, but Spain, Italy and Greece are among Europe’s biggest buyers of Iranian oil.

Iran’s targeting of Britain and France appeared to be a political decision to punish the two countries for supporting tougher sanctions against Iran over its nuclear program.


Ron Holzwarth 6 years, 2 months ago

Some people might not have been reading the news. Iran is going to trade oil to India in exchange for gold, as opposed accepting as payment a fiat currency such as the Euro or the US dollar.

The following is clipped from:

"Today's big story that doesn't seem to be getting enough attention is the revelation that India will begin to buy oil from Iran using gold (GLD) -- not dollars. This is a big story with a couple major points"

"the exodus from the dollar is gaining speed. How far off is the tipping point? I post it's not as far off as many would believe."

"I think the tipping point for a shift out of dollars and into a new monetary system backed by gold is not as far off as it may seem."

"The only way gold does not get re-monetized is if some type of agreement between the US Treasury and major Treasury bondholders can be reached in which the debt is partially cancelled and bondholders agree to take the loss."

The shift towards acceptance of payment in gold in lieu of currency is covered in many news reports on the web. In order to verify that, it is only necessary to google these three words: Iran oil gold, and scroll down the list.

China, another major oil importer, is also lined up to purchase oil from Iran with payment in gold. So is Russia.

Clipped from:

"Sanctions dodge: India to pay gold for Iran oil, China may follow"

"India has reportedly agreed to pay Tehran in gold for the oil it buys, in a move aimed at protecting Delhi from US-sanctions targeting countries who trade with Iran. China, another buyer of Iranian oil, may follow Delhi’s lead.

India and China need to switch from the dollar in bilateral trade, since the US and EU have issued unilateral sanctions against the Iranian oil industry and financial institutions. The sanctions would ban any bank involved in oil trade with Iran from dealing with American and European counterparts.

Both India and China, two major buyers of Iranian oil accounting for 22 and 13 percent of its total export respectively, have refused to join such sanctions. This means they have to establish a reliable way of paying for crude, independently of the parts of the global financial system controlled by New York and London."

I think that the economic sanctions against Iran are going to have these two unexpected consequences: 1) The fiat currencies will be debased, leading to an inflationary event of unknown magnitude. 2) And, after Iran has shifting to accepting payment with gold, other countries are very likely to follow suit.

My conclusion is this: In the long run, the sanctions won't hurt Iran at all, and will end up being a disaster for the countries that are imposing them.

Ron Holzwarth 6 years, 2 months ago

Another verb problem!

shifting = shifted

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