US President Barack Obama has signed new sanctions targeting Iran’s oil industry, as further evidence mounts of the country’s diminishing role in oil supply markets.
By executive order, Obama yesterday passed new sanctions target foreign banks that handle transactions for Iranian oil or handle large transactions from the National Iranian Oil Company (NIOC) or Naftiran Intertrade Company (NICO), two key players in Iran’s oil trade.
Mirroring the EU, the US also now has restrictions in place directed at Iran’s marine fleet, including a ban on insurance provision and measures aimed to hinder re-flagging and transponder shutdowns by Iranian-controlled vessels.
Obama’s measures pre-empt a congressional session where both parties have agreed to pass laws imposing tougher measures on Iran.
America already has a sanctions system that threatens to cut off any country from America’s economy which does not drastically reduce its Iranian crude imports. The threat was enough to cow all but China into reducing imports, with China winning an exemption despite mixed data about its commitment to reducing its tie to Iranian oil.
Turkey is the latest major customer of Iranian oil to cut back, having taken one final swig before EU sanctions came into force. After spiking in April, crude import volumes fell to just 683,000 tonnes over June, down to a 37% share of imports from 51% a year ago.
As with Asian importers, Turkey has tapped up Saudi Arabia for more crude, with imports up 81% to 361,000 tonnes, according to a report in the Financial Times. Imports from Russia are up 96% to 912,000 tonnes and imports from Iraq and Libya are up by similar percentages.
Turkey is also trying to increase its supply from the Kurdish region of Iraq, looking set to eventually take up to a million barrels of oil a day through a pipeline currently under construction. The tension this has created with Baghdad, and Turkey’s unease with the rise of a defacto Syrian Kurdish zone in the oil-rich north east corner of Syria, may yet scupper this. Nevertheless, it signals Turkey’s intention to diversify its oil supply away from Iran.
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