Iran’s oil minister said over the weekend that if the country does cut off oil shipments to Europe, the cuts would be directed only at “hostile” nations. The European Union has adopted a July 1st deadline to begin an embargo against Iranian oil unless the Islamic Republic agrees to roll back its nuclear development program.
The minister also said that Iran did not “anticipate any tensions” in the Strait of Hormuz even if the embargo is enforced, according to a report in the Financial Times.
The “hostile” nations of Europe, in Iran’s thinking, are the UK, France, and Germany, not of which imports much Iranian oil. Greece, Italy, and Spain import significant amounts of Iranian oil and the EU’s deadline was pushed out until summer in order to give these countries a chance to negotiate new, non-Iranian supplies. Iran sends about 600,000 barrels/day to the 27 EU countries.
Iran’s recent statement is meant to do two things: warn off Saudi Arabia, which has said that it will make up any reduced shipments that result from an embargo of Iranian oil; and, not least, maintain the flow of US dollars into Iran’s treasury from sales to Europe, which is practically the only region that pays for oil in dollars.
Iran’s threats have added little if anything to the price of a barrel in the past couple of weeks. That could change, though, if no resolution is reached by summer.
Find a Qualified Financial Advisor (Sponsor)
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
