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European oil refiners curtail purchases of raw materials from Iran

UNITED STATES (OBSERVATORY) –¬†European companies engaged in oil refining are curtailing its purchases from Iran in connection with President Trump’s intention to resume sanctions against Tehran. This was reported on Wednesday by the agency Reuters, citing sources in the industry.

According to sources, the French company Total, Iran’s ENI and Saras, Spanish Repsol and Cepsa, and Greek Hellenic Petroleum are planning to stop the acquisition of oil from Iran. These companies account for the bulk of the purchase of Iranian oil by European countries, which accounts for one-fifth of the oil exports of the Islamic Republic, the agency said.

Solutions of companies

Europe’s largest refiner, French Total does not intend to file a request to the US authorities for an exception under sanctions against Iran after November 4, when they should enter into force, a source told Reuters. In fact, this will mean that Total will not be able to buy oil from Iran after this period.

At the same time, a source in the industry, close to the Spanish Cepsa, said that this company hopes to get from the US an exception to the anti-Iran sanctions in connection with the fact that it has entered into a long-term contract with this country. However, the company expects that from November it will have to limit or completely stop imports from Iran.

“We can not challenge the United States,” said a source in the Italian oil refining company Saras. According to him, this company intends to stop the purchase of oil from Iran within the time allotted to the US – 180 days from the announcement of the resumption of sanctions. “It is not yet clear what the US administration can do, but in practice we can have problems,” the source added.

US sanctions plans

Another reason for the decline in oil exports from Iran to Europe was that banks, as well as transport and insurance companies refuse to deal with Iran’s deals for fear of falling under US sanctions.

“The whole point is to find a tanker or an insurer that will insure him,” a source close to the Spanish Repsol said. “Now it’s become very difficult.”

Hellenic Petroleum was forced to stop buying oil from Iran, because the Swiss bank, through which it transferred money, refused to make payments to customers in this country.

Three months to close business with Iran

US President Donald Trump on May 8 announced the withdrawal of Washington from the Joint Comprehensive Action Plan, concluded in 2015 and limiting Tehran’s nuclear development in exchange for the abolition of the relevant sanctions of the UN Security Council and unilateral restrictions imposed by the United States and the European Union. Trump promised not only to return within 90-180 days old sanctions, but also to introduce new restrictive measures.