European Refineries Reduce Oil Purchases from Iran

Reports indicate that European refineries have decreased their oil purchases from Iran following the U.S. withdrawal from the JCPOA and the end of the suspension of unilateral sanctions. Even though the European Union has not reinstated sanctions on Iran, these refineries state they are unwilling to jeopardize their relations with the U.S. market. A source from the Saras oil company in Sardinia, Italy, which currently buys 300,000 barrels of oil per day from Iran, stated, "We cannot afford to defy the U.S." This source added that Saras is reducing and moving towards halting oil purchases from Iran within the 180-day deadline set by the U.S. The source, who wished to remain anonymous, told Reuters, "We have no idea what the U.S. government will decide if we continue our cooperation with Iran. Therefore, we prefer to stay out of the danger zone." Other sources have told Reuters that refineries such as Total from France, Eni and Saras from Italy, Repsol and CEPSA from Spain, and Hellenic Petroleum from Greece are also reducing their oil purchases from Iran and moving towards stopping them. These companies account for one-fifth of Iran's oil exports. In recent months, Iran's oil exports have been around 2.5 million barrels per day. A news source told Reuters that European refining and petroleum product companies will continue to buy oil from Iran until the deadline, but will stop once the deadline arrives. The UK, Germany, France, and the EU have sent a letter to the U.S. Treasury and State Department requesting that European companies be allowed to continue their cooperation with Iran. This letter, dated June 4, was signed by the foreign and finance ministers of the UK, Germany, and France, along with Federica Mogherini, the EU's foreign policy chief. News sources have told Reuters that Total has not requested an exemption and will stop buying oil from Iran by the deadline of November 4. The Italian company Eni has a contract to buy two million barrels of Iranian crude oil per month until the end of this year. Repsol and Hellenic Petroleum have refrained from providing further details to Reuters. The oil company CEPSA has stated it is considering submitting a request to the U.S. to continue its cooperation with Iran after November 4 and be exempt from potential Washington sanctions. A source from this company said, "We are trying to continue our cooperation with Iran six months after the mentioned deadline." The report states that with the return of U.S. sanctions, European insurance, shipping, and banking companies have stopped cooperating with Iran, and oil companies will not be able to continue operations without these factors. A source from Repsol stated, "The problem is finding a tanker to transport the oil and an insurance company to insure it. Currently, doing such a thing has become difficult." A source from Hellenic Petroleum in Greece also stated that the Swiss bank responsible for payments and financial dealings with Iran has said it will no longer work with Iran, and therefore, this company can no longer continue purchasing oil from Iran.