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Iran Halts Oil Sales To UK, France

Iran on Sunday announced stoppage of oil exports to French and British buyers, months ahead of a European Union directive banning the bloc's member-states from buying Iranian crude from July 1.

Ali Reza Nikzad Rahbar, spokesman for Iran's Oil Ministry, was quoted as saying in a statement posted on the its website that Iran "will give its crude oil to new customers instead of French and UK companies."

Although he did not name the new customers for Iranian oil, the state-run Mehr news agency had reported earlier this month that Iran would increase its oil sales to China and other nations that have sought waivers on U.S. sanctions imposed on Iran late last year.

In addition to several rounds of sanctions recently imposed on Iran over its disputed nuclear program, U.S. President Barak Obama had signed a new law in December with the intention of crippling the Islamic Republic's oil revenue that financed the country's disputed nuclear program.

The measures authorized the administration to bar foreign financial institutions that engage in financial transactions with the Central Bank of Iran, making it difficult for Tehran to sell its crude oil in the international market. The Obama administration has six months to impose the sanctions, which also carries the option of waiving penalties for national security reasons.

The U.S. had earlier banned its banks from doing business with the Iranian central bank. Also, it had approved new economic sanctions against Iran earlier this month, targeting companies in joint uranium mining projects and organizations supplying Tehran with weapons. Prior to that, the U.S. had joined Britain and Canada in November in slapping new sanctions on Iran to ratchet up pressure on the country to abandon its nuclear ambitions.

Further, the EU barred member-states in January from importing, purchasing and transporting Iranian crude oil and petroleum products from July 1. The 27-member bloc also froze the assets of the Iranian central bank within the EU, while ensuring that legitimate trade would continue under strict conditions.

In response to the Western sanctions, Iran threatened to close the strategic Strait of Hormuz, through which about 40 percent of the world's tanker-borne oil passes. The Western nations, including the U.S., responded to the Iranian threat by deploying their warships in the Persian Gulf and warning that they will not tolerate any disruption to the oil traffic through the strategic waterway.

The West hopes that the new sanctions will persuade Iran to rejoin the stalled negotiations with the six world powers over its disputed nuclear program. Although Iran maintains its uranium enrichment work is aimed at producing fuel for a medical-purpose reactor, the West suspects Tehran's claims are just a cover-up for producing weapon-grade uranium.

In addition to the sanctions imposed by individual nations, Iran had already survived four sets of sanctions imposed by the U.N. Security Council following refusal to halt its uranium enrichment. Analysts believe that Russia and China, both allies of Iran, are unlikely to support further U.N. sanctions against Tehran over the issue.

Since the last of the U.N. sanctions on Iran was imposed in June 2009, the six world powers have held two rounds of talks with Iran, once in Geneva in December 2010 and again in Istanbul in January 2011. Both negotiations failed to reach any agreements on the issue.

Despite growing international concerns over its controversial nuclear program, Iran has begun production of uranium enriched up to 20 percent at its underground Fordo nuclear plant last month under IAEA's supervision. Further, Iran announced last week the fist-ever insertion of domestically-made fuel plates into a research reactor in northern Tehran as well as the development of "faster, more efficient" uranium enrichment centrifuges at its Natanz uranium enrichment facility.

by RTTNews Staff Writer

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