EU remains uncertain on timing of Iran oil embargo
By FRANCES ROBINSON
A European Union embargo on Iranian oil could be enacted after a six-month grace period under one of the options being considered, but there is still no consensus on the matter, Brussels diplomats said Friday.
"The discussions on new sanctions against Iran are still ongoing," said Michael Mann, spokesman for EU foreign policy chief Catherine Ashton. "Any reports are nothing more than speculation."
Oil prices dropped late Thursday after some news reports said that the EU was likely to delay the Iran embargo by up to six months to allow countries which import Iranian oil to find alternatives and allow existing supply agreements to expire.
Some of the EU's most economically-stressed countries, including Greece, Spain and Italy, are among the largest importers of Iranian oil.
The EU agreed in principle to enact an embargo on all purchases of Iranian oil, but set aside difficult questions, such as the time-frame for implementation.
EU diplomats familiar with the discussions said Friday that while six months is one of the possible options, there is no convergence yet.
"There's no majority convergence on any one date yet," the diplomat said. "Looking at it mathematically, six months could be the outcome, but the chair hasn't made a decision."
The talks continue as the US increases pressure on Iran in an attempt to curb its nuclear aspirations.
Top US officials, including US Treasury Secretary Timothy Geithner, have also been lobbying Asian countries to lessen their imports of Iranian crude. Tehran insists its nuclear program is for peaceful purposes.
Some European refiners have already taken steps in anticipation of the embargo to wind up existing Iranian oil supply or find replacements, refining sources have told Dow Jones.
However, some of these same companies continue to receive Iranian oil shipments under long-term contracts. Other refiners haven't changed their buying strategy, refining sources said.
Foreign ministers will gather in Brussels Jan. 23, where they are expected to sign off on a package of sanctions including oil restrictions and financial measures.
Extra meetings have been added to the Brussels calendar next week to discuss Iran, including a Thursday meeting of the Committee of Permanent Representatives to the EU, an influential Brussels panel, a third EU diplomat said.
"There's no solid agreement yet," she told Dow Jones Newswires. "Options include a six-month grace period with a review clause inserted explicitly in the text, to assess how member states are handling it."
Greece had resisted the Iranian embargo and has expressed reservations about the speed of implementation.
The talks will also include discussion of a demand by Italian oil giant Eni, which is owed about $2 billion by Iran for work and has said it expects to be paid in crude supplies. Italian officials have expressed confidence the shipments will be exempted.
Diplomats will also discuss the financial element of the sanctions package including a possible asset freeze for certain individuals, and sanctions on the Iranian Central Bank.
Still, diplomats are confident an agreement can be reach on Jan 23 - though one insists whatever is agreed must have teeth.
"If modalities emerge that it is too delayed, too complicated, there's a credibility issue," another diplomat said. "We should have something quick, and significant, without having to choose between the two."
Dow Jones Newswires
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