Iran Suspends Shipments of Oil to Britain and France

Iran President Mahmoud Ahmadinejad greeting invited guests at a meeting held in the Warwick Hotel in New York. The leader met with representatives of the African-American liberation movement and antiwar activists from the U.S. (Photo: Abayomi Azikiwe), a photo by Pan-African News Wire File Photos on Flickr.

February 19, 2012

Iran Suspends Shipments of Oil to Britain and France

By STEVEN ERLANGER
New York Times

PARIS — Iran’s government ordered a halt to oil exports to Britain and France on Sunday, in what may be only an initial response to the European Union decision to cut off Iranian oil imports and freeze central bank assets beginning in July.

Britain and France depend little on Iranian oil, however, so their targeting may be a mostly symbolic act, a function of the strong positions Paris and London have taken in trying to halt Iranian nuclear enrichment and bring pressure to bear on Syria, one of Tehran’s closest allies.

Tehran may also be reluctant, when its economy has been damaged by existing sanctions, to deprive itself of revenues from its larger European customers. At the same time, it may be seeking to divide the 27-nation European Union between those who depend on Iranian oil and those who do not.

Sunday’s order, according to the Mehr News Agency in Tehran, came from the Iranian oil minister, Rostam Qassemi, who had warned this month that Tehran would cut off oil exports to “hostile” European nations. On Sunday, the ministry spokesman, Ali Reza Nikzad-Rahbar, confirmed that shipments to Britain and France had been cut off, and said on the ministry Web site, “We have our own customers and have no problem to sell and export our crude oil to new customers.”

At the same time, according to the Mehr agency, an official at the Oil Ministry said Iran was seeking longer-term contracts of two to five years with other European nations.

There was no immediate reaction from French officials, and the British Foreign Office in London declined to comment. A British government official, demanding anonymity to describe internal discussions, said that “we’re not getting exercised about it,” noting that Iran provides “less than one percent of our imported crude oil.”

Jean-Louis Schilansky, president of the French Union of Petroleum Industries, told the French newspaper Le Monde that “the Iranian decision has no practical, direct consequences” for France, which since 2011 “practically stopped importing Iranian oil.”

Iran is deeply dependent for foreign currency on oil sales, which supply more than 50 percent of the national budget and account for 80 percent of exports. Iran produces about 3.5 million barrels a day and exports about 2.5 million, 70 percent of that to Asia.

The 27 nations of the European Union are a big customer as a whole, representing about 18 percent of Iran’s exports.

But Britain and Germany only get about 1 percent of their oil from Iran and France only about 3 percent. Other European countries, like Greece, Italy and Spain, are much more reliant on Iranian oil. Greece, for instance, gets about one-third of its oil from Iran, while Italy and Spain each get about 13 percent, according to European Union figures.

Greece, Italy and Spain were more reluctant than Britain, France and Germany to vote for rapid oil and banking sanctions against Iran.

Britain, France and Germany are also the European nations negotiating with Iran on its nuclear program in the talks that also include the United States, Russia and China, and are chaired by the European Union policy chief, Catherine Ashton.

France and Britain have pushed hard to ramp up sanctions on Iran to get it to stop nuclear enrichment in what many in the West believe to be an Iranian program to build a nuclear weapon. The sanctions are part of a dual-track strategy that combines pressure with negotiations. Germany, however, has explicitly opposed any military action against Iran, while Britain and France, like the United States and Israel, have refused to rule out military action.

Iran denies that its nuclear program has any military intent, but it has flouted repeated Security Council resolutions requiring it to stop nuclear enrichment and cooperate fully with the International Atomic Energy Agency. Merging conciliation with threat, Iran has recently boasted that it was about to start a vast new array of centrifuges to enrich uranium deep in a mountain that would be very difficult to bomb, while it has renewed its call for negotiations after a gap of a year.

French officials believe the threat of new sanctions, and the bite of older ones, together with the travails of the Syrian government and the bellicose noises coming from Israel, are bringing Iran back to the table. They are concerned, however, that the Iranian offer for talks is simply another way to buy time while the centrifuges continue to turn. They also fear that if the talks fail, a military strike on Iran may follow.

Last week, Iran sent a letter to Ms. Ashton calling for a new round of negotiations with the group of six, in response to a letter from her on Oct. 17. The Iranian letter, from the country’s nuclear negotiator, Saeed Jalili, declared Iran’s “readiness for dialogue” at “the earliest possibility.” The letter, which was vague but did not contain preconditions, was greeted by Ms. Ashton and Secretary of State Hillary Rodham Clinton with a mixture of optimism and skepticism.

French officials have said that Iran must agree to talks that center on the key issue: its nuclear program and the calls by the Security Council to stop it. The last round of talks ended a year ago when Mr. Jalili demanded that the United Nations first lift all sanctions and acknowledge Iran’s “right to enrich” uranium before talks could begin. The demands were unacceptable, and the six say that the Nuclear Non-Proliferation Treaty contains no “right to enrich,” only the right to peaceful nuclear energy.

The French foreign minister Alain Juppé said last week that the European Union would carry out its sanctions with determination. “Iran continues to develop a military nuclear program, we are convinced,” he said Wednesday. “We say to Iran that the path for dialogue remains open, but if it’s not engaged, then the sanctions will be enforced with great firmness.”

Ravi Somaiya contributed reporting from London, and Artin Afkhami from Boston.