Iran crude to Europe slows to a trickle
London, 26 April (Argus) — European buying of Iranian crude has slowed to a trickle as it becomes ever more difficult to take delivery of cargoes before the total EU ban comes into effect on 1 July.
Current EU member state buying is estimated to be close to 150,000 b/d, down from around 500,000 b/d under previously agreed term agreements a year ago.
Iran is stockpiling crude offshore and in storage at Iran's Kharg Island oil terminal. Up to 33mn bl is being held in tankers that are acting as floating storage capacity, while up to 23mn bl is held in storage tanks at Kharg Island, according to one oil company estimate.
Oil majors, including Shell and Total, have agreements to take 100,000 b/d of Iranian crude each, but have already said they have stopped taking Iranian crude well before the 1 July EU total ban comes into effect.
Some European oil firms, mainly Italian and Spanish refiners, continue to take Iranian crude under existing agreements, but are finding the transportation and financing increasingly difficult to arrange.
Turkey is still taking at least 100,000 b/d of Iranian crude. The country is not an EU member but, fearful of US sanctions against entities doing business with Iran, has said it will cut back.
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