Iranian oil boycott by the EU?

snow hope · Post by **snow hope** » 22 Jan 2012, 18:34

The EU meets tomorrow to debate whether to proceed with this boycott. The Iranians have stated they will block the Straights of Hormuz if they decide to proceed.

http://www.euractiv.com/energy/strait-t ... ews-510201

The Americans and the British (and others) have said they will take whatever action is necessary to keep the Straights open.

I will be watching the news closely tomorrow.....

Could be just more Sabre rattling from both sides, but its also a possibility nevertheless.

energy-village · Post by **energy-village** » 22 Jan 2012, 19:38

Possibly China would buy the oil the EU won't, they may wish to stock up (?).

As a fairly heavy user of Iranian oil, post-Fukushima Japan must be worried (India and South Korea too).

I've heard an internet rumour that the US will call for sanctions on those that do not apply sanctions. Not that an 'internet rumour' is a reliable source!

PS_RalphW · Post by **PS_RalphW** » 22 Jan 2012, 20:11

Enough countries are critically dependant on Iranian oil directly to make an EU wide imposition of an oil embargo unenforcable. There have been effective oil sanctions against the Iranian oil industry for 30 years, which is why they are one of the few countries left with potential for growth, albeit only after massive injection of capital and modern technology.

That isn't going to happen until a West-freindly regime is in place.

So it is not going to happen.

energy-village · Post by **energy-village** » 22 Jan 2012, 20:18

RalphW wrote:Enough countries are critically dependant on Iranian oil directly to make an EU wide imposition of an oil embargo unenforcable.

Are you saying you don't think the EU will manage to enforce an EU wide oil embargo? If so, I thought Italy was the only EU country that was a heavy Iranian oil importer? What can Italy do? They are run by technocrats now, the entire Italian government is without a single elected politician, and Mario Monti (the new Italian PM) is a long-term adviser to Goldman Sachs, surely he won't kick up a fuss?

Or are you saying that an EU oil embargo won't make any difference to Iran as they can sell their oil elsewhere in the world?

I think Iran is being pushed into a corner, invited to react. And when they do .....

hodson2k9 · Post by **hodson2k9** » 22 Jan 2012, 20:35

energy-village wrote:
RalphW wrote:Enough countries are critically dependant on Iranian oil directly to make an EU wide imposition of an oil embargo unenforcable.
Are you saying you don't think the EU will manage to enforce an EU wide oil embargo? If so, I thought Italy was the only EU country that was a heavy Iranian oil importer? What can Italy do? They are run by technocrats now and Mario Monti (the new Italian PM) is a long-term adviser to Goldman Sachs, surely he won't kick up a fuss?

Or are you saying that an EU oil embargo won't make any difference to Iran as they can sell their oil elsewhere in the world?

I think Iran is being pushed into a corner, invited to react. And when they do .....

+1

Lord Beria3 · Post by **Lord Beria3** » 22 Jan 2012, 20:59

Agree, this is a very dangerious moment... the Iranians are being boxed into a corner - I wouldn't blame them if they do try to close the Straits.

RenewableCandy · Post by **RenewableCandy** » 22 Jan 2012, 21:06

"Remember, when your enemy is backed into a corner, they'll fight like a tiger. Therefore, do not back your enemy into a corner. After all, whose side do you want to fight like tigers?" Sun Tzu.

PS_RalphW · Post by **PS_RalphW** » 22 Jan 2012, 21:55

http://www.athensnews.gr/issue/13478/52287

Itally, Spain, Greece , maybe others. No ban for at last 6 months.

It is nothing but talk. In 6 months Iran can easily arrange other buyers, I am sure China (biggest Iranian customer) will take on the excess.

Given India's critical energy shortages and favourable credit terms with Iran, I doubt they will stop buying.

Freezing bank assets may have more impact.

madibe · Post by **madibe** » 22 Jan 2012, 22:43

energy-village wrote:

I've heard an internet rumour that the US will call for sanctions on those that do not apply sanctions. Not that an 'internet rumour' is a reliable source!

Here the US go again.... will they, for fecks sake, lay off the whole 'we are the empire and we have the right to do what we want' thing!

This ties up with lots of other threads on the board at the moment. The US is imposing its will on so many countries now. It is hard to believe.

Furthermore, they are targeting individuals as well as governments....

biffvernon · Post by **biffvernon** » 22 Jan 2012, 22:48

RenewableCandy wrote:"Remember, when your enemy is backed into a corner, they'll fight like a tiger. Therefore, do not back your enemy into a corner. After all, whose side do you want to fight like tigers?" Sun Tzu.

You'd think that after two and a half thousand years that message would have got through, but no...

Post by **adam2** » 23 Jan 2012, 10:10

The EU might manage an oil embargo, though I have my doubts.
Many other countries will take no notice, or may even support Iran.

I have no doubt that Iran will be able to sell as much oil as they want, to non EU countries, and probably to the EU via third parties.
The EU will almost certainly be able to source oil from other suppliers.

If Iranian production ceases for any significant time, that could have serious consequences. Any significant reduction in world crude production would increase prices worldwide, no matter whom sells what oil to whom.

If however all/most Iranian oil is sold to China, with supplies from other producers being re-routed to the EU instead of to China, then I doubt that anything much will happen. After all, total production and total demand would be unaltered, and prices should therefore be substantialy unaltered.

snow hope · Post by **snow hope** » 23 Jan 2012, 12:37

European Union foreign ministers have formally adopted an oil embargo against Iran over its nuclear programme.

http://www.bbc.co.uk/news/world-europe-16674660

Now we need to watch what Iran says and does..... things are ratcheting upwards.....

[/quote]

Post by **clv101** » 23 Jan 2012, 12:52

This oil embargo just seems silly. Oil is the a fungible commodity. We can buy from whoever we want and Iran can sell to whoever they want. So if EU refineries aren't allowed to buy oil from Iran they will just buy the same oil (probably at slightly higher prices or slightly lower quality) from someone else. Iran in turn will just sell the oil that was previously sold to the EU, to the people who's oil the UE are now buying instead.

If we assume the market was operating in an efficient way before this embargo, all the embargo represents is a slight inconvenience to several parties, including EU refineries.

Iran will still be able to sell every drop of oil they want, UE refineries will still be able able to buy the oil they want and several other buyers and sellers will have to draw up new agreements to balance the market. The winners, if any, will be the shipping companies and the traders.

Tarrel · Post by **Tarrel** » 23 Jan 2012, 13:33

Nevertheless, fuel tank and jerries have been topped up, and have added some more tins to the food stash.

Post by **adam2** » 23 Jan 2012, 13:37

Tarrel wrote:Nevertheless, fuel tank and jerries have been topped up, and have added some more tins to the food stash.

Sensible, just in case.
I doubt that the oil embargo will have much effect in itself, but as posted above tensions are increasing and who knows how it will all end.
Any military action in the region will assuredly drive prices up, and a full scale war could end in an Alex Scarrow Event.