Iran’s oil ministry announced yesterday that it would no longer export oil to the U.K. and France. The announcement follows a week of mixed signals. First, official Iranian media reported that six European nations were being cut off from Iranian crude before the European Union ban could come into effect on July 1. The oil ministry backtracked quickly, saying the reports were inaccurate. According to the ministry, exports were not cut off—but six EU member states were given an ultimatum instead: sign long-term oil purchase agreements or be cut off sooner than July with little time to arrange alternatives. This turned out to be false too. European envoys later said no ultimatums were delivered to their offices.
After a week of contradictory and unconfirmed claims from Tehran, what should we make of yesterday’s announcement affecting British and French imports of Iranian crude? Absolutely nothing. The announcement is meaningless.
I say this because the French stopped importing any considerable amount of Iranian crude late last year. Christophe De Margerie, CEO of Total SA–France’s largest oil company–confirmed so on January 27 when speaking to Bloomberg. The Wall Street Journal reports today that “Total, which imported virtually all the Iranian oil destined for the French market for its refineries, stopped buying crude in December.” The U.K., for their part, imported an inconsequential 11,000 barrels per day in the first half of 2011, according to IEA data. Marlene Holzner, energy spokeswoman for the European Commission (the executive office of the EU), said today that EU data shows the U.K imported zero barrels of Iranian crude in the second half of 2011. It’s awfully hard to cut exports to a country that hasn’t imported your product in seven months.
Iran’s symbolic statement was made in order to preserve pride at home rather than turn the screws on customer-enemies abroad.