French push for Iran oil embargo meets EU resistance

A French push for a European Union embargo on Iranian oil has run into opposition in some EU capitals, diplomats said, signaling that the bloc should wait for big troubles and widening gaps among member states.Paris has argued Europe should ban Iranian oil as part of Western steps to ratchet up pressure Iran over its nuclear program, following the release of a US-dictated report by the International Atomic Energy Agency against Iran\'s nuclear progress. Iran, Russia, China and the 120-member Non-Aligned Movement (NAM) all dismissed the report as a sham. France is not a buyer of Iranian oil. EU powerbrokers Britain and Germany support the proposal, although London is still conducting an analysis of the costs, diplomats said. But some EU states, led by crisis-stricken Greece, have expressed concerns during talks on the issue about the economic impact of an oil embargo. Discussions are being held in Brussels ahead of a meeting of EU foreign ministers on Thursday.Foreign ministers are expected to map out further measures as well, but are likely to stop short of issuing a joint call for an oil embargo, delaying definitive talks on the issue until the meeting of EU heads of state.\"I can\'t see the issue moving before the European Council, when the discussion will be more political,\" one senior EU diplomat said, referring to the Dec. 9 summit. Only talks of such sanctions has already sent crude prices higher. Oil futures prices surged Monday after reports that West is mulling sanctions on Iranian oil imports, although most Iranian crude cargoes are exported to Asian buyers and demand is on the increase for Iranian crude in the world\'s largest continent. Iran exported 2.2 million barrels of oil a day last year making it the world\'s third-largest oil exporter. Since the Nov. 8 report by the IAEA that presented intelligence on Tehran\'s nuclear work, the United States, Canada and Britain have announced new steps against the OPEC producer. Britain banned all its financial institutions from doing business with Iran, including the Iranian central bank, and Canada said it would ban the export of all goods used in Iran\'s petrochemical, oil and gas industries and \"block virtually all transactions with Iran\", also including the central bank. Neither the US nor Canada are buyers of Iranian oil, gas or petrochemical products and Tehran has just lately started downgrading relations with Britain from ambassadorial to charge d\'affaires level. Washington stopped buying Iranian crude in the 1990s, but Iran continues to supply Europe. Experts say an oil embargo would only work if Europe can get Saudi Arabia on board to fill any gaps caused by an end to Iranian supplies, a measure totally impossible as the Arab nation does not enjoy such a capacity to boost production 150% in a twinkling of an eye. Even so, a likely rise in world crude prices - already above $100 a barrel - resulting from a European embargo on Iran could punish Europe\'s already struggling economies. While most of Iran\'s oil goes to Asia, it still supplies significant volumes to Europe via the Suez Canal. US government data show EU countries accounted for 18 percent of Iranian oil purchases in the first half of 2011 or 450,000 bpd (barrels per day). Italy was the leading buyer with around 180,000 bpd and Spain took 137,000 bpd. Financial problems have pushed Greece to rely increasingly on Iran for oil imports, because of Tehran\'s better financing offer. Banks are increasingly denying credit to Greece, cutting it off from other sources of crude. Details of an EU oil embargo would also have to be worked out, diplomats said, potentially complicating talks.Italy\'s opposition to an EU-wide ban on imports of Syrian crude delayed its introduction earlier this year, when Rome insisted on an exemption for existing contracts. It seems that EU should now choose to pay more and more for the US policies, or experience a deep gap and divide among member states, or the easiest way choose to live through its own crises and give up compliance with the Zionist-driven US policies.