Iran says cut oil supply to Spain, may halt flow to Germany, Italy

Iran has cut oil exports to Spain and may halt sales to Germany and Italy, Iran’s English-language state television reported on Tuesday, in an apparent move to strengthen its position ahead of crucial talks with world powers later this week.

iran oil - Glenn Klasner - December 12 2011

Irainian Ship - Photo by: Glenn Klasner

But in an indication that Tehran’s “counter-sanctions” were of little impact, Spain’s biggest refiner said it had already replaced its Iranian crude with oil from Saudi Arabia several months ago.

Iran has played a tit-for-tat game over crude shipments since the European Union agreed in January that it would stop all Iranian oil imports as of July. EU states have since sought alternative supplies before that deadline, with Iran threatening to cut exports before then.

“Tehran has cut oil supply to Spain after stopping crude export to Greece as part of its counter-sanctions,” Press TV said, citing unidentified sources, adding that a similar move was being considered for Germany and Italy.

A spokesman for Spanish refiner Repsol said it had not been buying Iranian oil for months.

“No crude out of Iran for us since January,” he said.

Repsol’s imports of Iranian crude were estimated at around 65,000 barrels per day last year, making it one of Tehran’s medium-sized European customers.

The EU was the second biggest buyer of Iranian oil after China before the embargo which is a direct strike on the OPEC member’s biggest source of export income.

Most European buyers have already reduced or halted their purchases from Iran in anticipation of the July 1 deadline and because of increasing difficulties in paying for the crude after tough new sanctions were imposed on Iranian banks.

The sanctions are designed to force Iran to stop some of the atomic work that the EU and the United States suspect is part of a nuclear weapons program, a charge Tehran denies.

Talks between Iran and six world powers aimed at easing the nuclear stand-off are set to resume in Istanbul on Saturday, more than a year after previous negotiations failed.

Earlier Tuesday, Iranian media cited Iranian President Mahmoud Ahmadinejad as saying that Iran has enough funds to withstand a total embargo on its oil sales for several years.

“[Western powers] want to impose sanctions on our oil and we must say to them that we have that much saved that even if we didn’t sell oil for two to three years, the country would manage easily,” Ahmadinejad said during a visit to Hormuzgan province.

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By Reuters