AFP, Brussels, 12 Jan 2012 – European governments are moving closer to an agreement on an Iranian oil embargo that would give companies six months to phase out contracts with Iran, EU diplomats said Thursday.
The European Union may also allow Iranian companies to continue repaying debts to European firms with crude instead of cash, an idea raised by Italy, the diplomats said.
The 27-nation bloc has agreed on the principle of an embargo, but governments are negotiating ways to make the break less painful for financially stressed nations that rely on Iranian crude — Greece, Italy and Spain.
‘It looks as though we’re going to settle on a six-month transition period,’ one of the EU diplomats said on condition of anonymity, adding that more negotiations were scheduled for the coming days.
A second diplomat said that by allowing Europeans to continue accepting oil for debt repayments, Tehran would have less crude to sell on the market.
‘An agreement on this is quite likely because it would make the Iranians poorer,’ the diplomat said.
EU foreign ministers meet in Brussels on January 23 to decide on the new sanctions, part of a concerted effort with the United States to pressure Iran into halting its controversial nuclear programme.
The EU is collectively the second-biggest destination for Iranian oil exports after China, taking in some 450,000 barrels per day.
Iranian oil accounted for 34.2 percent of Greece’s total oil imports, 14.9 percent of Spain’s and 12.4 percent of Italy’s in the first nine months of last year, according to the latest EU statistics.