Reuters reports: As the European Union prepares to ban Iranian oil and the United States turns the screw on payments, oil executives and policymakers say China and Russia stand to gain the most and Western oil firms and consumers may emerge the biggest losers.
Iran will continue to sell much the same volume of oil – 2.6 million barrels per day or around 3 percent of world supply – but almost all of it will flow to China, they reason. And being pretty much Iran’s only remaining customer, Beijing will be able to negotiate a much reduced price.
The EU will ban Iranian oil from July. The United States plans sanctions on Iran’s central bank and possibly its shipping firm. European headquartered oil firms such as France’s Total and Royal Dutch Shell have already abandoned Iranian oil purchases or are in the process of doing so.
Japan and South Korea have signaled they may reduce purchases of Iranian oil to comply with U.S. sanctions designed to put pressure on Tehran over its nuclear program.
That leaves a growing number of buyers competing for alternative supplies. Inevitably attention has turned to Saudi Arabia, the world’s biggest exporter and the only country that can quickly increase oil output and help the West avoid a price spike that would deal a severe economic blow.
Meanwhile, the Financial Times reports that “Iran’s parliament could ban oil exports to Europe as early as next week, in a move that could hit economically weak southern European countries.” The EU recognizes that Greece, Spain and Italy need several months to secure alternative supplies to the ones they now rely on from Iran.