EU Embargo on Iran Oil Takes Effect
July 1, 2012, 3:35 p.m. ET
By JERRY A. DICOLO
...European Union's full embargo on Iranian oil takes hold.
On Sunday, the EU embargo on Iran's oil exports began in earnest, halting the vast majority of imports into Europe...
Monday marks the first day of oil trading under the embargo, and the International Energy Agency estimates as much as one million barrels of Iran's crude may leave the market.
Oil companies, including French oil major Total SA, and Royal Dutch Shell PLC, have already ended their dealings with Tehran to comply with the embargo. Countries outside of Europe are following suit. South Korea last week said it would suspend Iranian imports by July 1. India may also be forced to halt imports as insurance for most of Iran's shipments has been provided by European firms...
Earlier this year, concerns about a confrontation between Iran and the West over the Iranian nuclear program helped send oil prices above $105 a barrel on the New York Mercantile...
The biggest contributor to oil-market calm has been Saudi Arabia, the world's largest oil exporter and a rival of Iran in the Organization of Petroleum Exporting Countries. Khalid Al-Falih, the chief executive of state-owned oil producer Saudi Aramco Mobil Refinery Co. said in May that the kingdom's output is more than 10 million barrels a day...
A demand slump in Europe and economic slowdowns in the U.S. and China have also reduced fears about global supplies...
"If demand recovers, you will see the shortage quite quickly," she said.
Until the ban's full effects are known, many are bracing for the possibility of renewed tensions with Iran or hiccups in the supply chain...With the new sanctions, the dispute will test past Iranian threats, which included a vow to cut off oil shipments through the Strait of Hormuz, a major chokepoint for global oil supplies...
Source: Mehr News Agency, Tehran
A three-day missile exercise of the Islamic Revolution Guards Corps, entitled the Great Prophet 7, will begin on Monday, according to the commander of the Aerospace Force of the IRGC.
Photos: Iran Test Fires 14 Missiles - June 2011
"During the war games, long-range, medium-range, and short-range missiles will be used and will be fired from different points across the country at 100 designated targets," Brigadier General Amir Ali Hajizadeh told reporters during a press conference in Tehran on Sunday.
He also said that domestically manufactured missiles will be fired at bases modeled on airbases of the extra-regional powers, which have been constructed in the heart of the Semnan desert in north central Iran in order to allow experts to assess the precision and efficiency of warheads and missile systems.
On the country's latest missile achievements, Hajizadeh said that the domestically designed surface-to-surface Qiam (Uprising) missile has been mass-produced and will be used during the war games.
The Persian Gulf anti-ship missile, which has been produced by the Defense Ministry, will also be test-fired during the exercises, he said.
During the maneuvers, unmanned aircraft will carry out operations, he added.
Shahab 3 test firing in September 2009
Elsewhere in his remarks, he said that the IRGC has designed a new anti-radar ballistic missile, which has a range of 300 kilometers, travels several times faster than the speed of sound, and is able to destroy air defense systems and any base that transmits radar signals.
The early warning radar in Turkey, which is part of NATO's missile defense system, the proposed missile defense shield in the Persian Gulf, and Israel's Iron Dome air defense system are vulnerable to the IRGC's new ballistic missile, the commander of the Aerospace Force of the IRGC added.
On the sidelines of the press conference, Hajizadeh said that if Israel attacks Iran, it will be obliterated by Iranian missiles.
Iran Works to Counter EU Oil Embargo Effects
By Samuel Rubenfeld
Iran is working to offset the effect of a European Union embargo on imports of its crude by bartering with China and selling refined products like gasoline to its neighbors, according to a Wall Street Journal report.
The EU embargo, which went into effect Sunday, cuts off oil access for Tehran to the 27 member states, and bars insurance for any tanker carrying Iranian crude anywhere in the world. EU officials re-affirmed last week it would impose the embargo following a review of its effects.
If Iran doesn’t succeed in offsetting the sanctions, the Journal report said, Tehran may have to shut down its oil wells, which could damage reservoirs over time and drive up oil prices.
The West is ratcheting up sanctions as talks over Iran’s nuclear program, which the EU, Israel and the U.S. say is for military purposes but Tehran says is for civilian use, have failed to resolve the issue. Low-level talks by experts are scheduled for Istanbul this week, though they come after failures recently among high-level officials.
“With this decision, our partners in the EU have underscored the seriousness with which the international community views the challenge of Iran’s nuclear ambitions,” the White House said Sunday in a statement. “Iran has an opportunity to pursue substantive negotiations, beginning with expert level talks this week in Istanbul.”
Ahead of the embargo, Europe said it was prepared for a dropoff of global supply. The EU measures went into effect just days after U.S. sanctions that punish anyone doing oil business with Iran’s central bank came into force.
Iran said it’s ready to deal with the sanctions, according to the Journal report.
“All possible options have been planned in government to counter” the sanctions, Iran’s Oil Minister Rostam Ghasemi was quoted by the Journal as saying Sunday in comments on the ministry’s website.
However, the Journal report also cites the head of National Iranian Oil Co. as saying the EU embargo will cause a 20%-30% reduction in crude exports for the second half of the year.