Iran plans to pre-empt EU oil sanctions

Monday 30 January 2012 12.25
Iran to debate cutting oil supplies to European Union
Iran to debate cutting oil supplies to European Union

A law to be debated in Iran's parliament on Sunday could halt oil exports to the European Union as early as next week.

The debate pre-empts an EU plan to phase in an oil embargo gradually.

A member of the Iranian parliament's national security committee is quoted as saying the bill will be approved by legislators and the Guardian Council, the constitutional watchdog, on Sunday and become law immediately.

The EU sanctions, aimed at forcing Tehran to curb its nuclear programme, allow for oil deliveries from Iran until 1 July to give countries such as Italy, Greece and Spain time to find new suppliers.

Renewed talks between the United Nations' International Atomic Energy Agency and the Iranian authorities are also scheduled to begin in Tehran on Sunday.

The EU accounted for 25% of Iranian crude oil sales in the third quarter of 2011 and oil prices rose on Friday as the threat of an immediate cut-off of Iranian oil exports loomed.

Brent, the global benchmark, rose to a session high of $111.74 a barrel.

The call for an immediate ban was also taken up in Friday prayers across Iran, indicating the plan had the support of Supreme Leader Ayatollah Ali Khamenei.

The leader of Friday prayers at Tehran university, hardline cleric Ahmad Khatami, mocked the EU's decision to phase in sanctions.

He said: "Why wait six months? Why not right away?"