Iran Set to Turn Off Oil Supply to Europe
It's a move which has tit-for-tat written all over it, but one which could nonetheless have a serious impact: The Iranian government wants to present a bill to parliament this weekend calling for an immediate halt to oil deliveries to Europe. The move, with most reports citing the Iranian news agency Mehr, has come about in response to the EU agreement to impose sanctions against Iran, which were announced earlier this week.
The sanctions banned any new contracts for buying oil from Iran, but allowed existing deals to continue until July in order to give countries time to find other sources. But that process is now at risk after the latest move from Tehran, a step the Iranian government had already threatened.
"If this bill is passed, the government will be forced to stop selling oil to Europe before the actual implementation of their sanctions," said Emad Hosseini, spokesman for the Iranian parliament's energy commission, reportedly said. The bill is set to become law on Sunday.
The EU sanctions allow for oil deliveries from Iran until July 1. Any pre-empting of this timescale by Tehran could prove problematic for countries like Italy, Greece and Spain, who would need to urgently find new suppliers.
http://www.spiegel.de/international/world/0,1518,811507,00.html
atreides1
(16,093 posts)TheWraith
(24,331 posts)Unless Iran is just going to stop exporting oil, the fact is that the same net amount of oil is still going to be going onto the world market. Some other country will buy it, and the oil they AREN'T buying from somebody like Russia, Saudi Arabia, etcetera can be sold to the EU. The problem is just getting it where it needs to be. Non-trivial, but also not apocalyptic.
FarCenter
(19,429 posts)Besides the logistics problems, (e.g. if China buys more Iranian oil, does that make East Siberian oil available to southern Europe?) there is the problem that refineries are designed to process certain types and grades of oil.
Good luck getting someone to upgrade a refinery in Greece! And refinery upgrades don't happen immediately, which is why the EU embargo didn't take place immediately.
EU Refiners Are the Main Losers of Iranian New Sanctions
He went on to say that Irans oil exports would be continued without any problem while European refiners will suffer more and more because they are losing a reliable source of providing oil and they will be faced with many problems to find crude oil grades compatible with their refineries.
http://www.gulfoilandgas.com/webpro1/MAIN/Mainnews.asp?id=18447
Iran Oil Switch May Cost S. Africa 300 Million Rand, Report Says
South African refineries may have to spend as much as 300 million rand ($38 million) on modifications to allow them to use oil from sources other than Iran, Business Report said, citing Nelisiwe Magubane, director general of South Africas department of energy.
http://www.bloomberg.com/news/2012-01-25/iran-oil-switch-may-cost-south-african-refineries-38-million-report-says.html
Blaze Diem
(3,384 posts)China should have it
TheWraith
(24,331 posts)If you feel that tar sands oil is unacceptable "sludge" as you put it, you shouldn't be cheering China using it, because China exists on the same planet as the rest of us.
Frankly yes, it's true that as long as it's profitable to use, SOMEONE will use it. Which is why Keystone XL isn't as big a win for the environment as people think it is; it just means that said oil won't be used here, and that the pipeline itself doesn't happen, but it WILL be used somewhere, and release it's greenhouse gases. But saying that the Chinese are welcome to it is contradictory to the point of why it's a negative.
FogerRox
(13,211 posts)It appears South Africa is buying API 31+ which is light crude. Light crudes between 31 and 35 are quite fungible because a huge portion of Mid East production is in the 31 to 36 API range.
GHAWAR in the KSA produces API 32-34 and still has some API 40 left in it.
http://www.gregcroft.com/ghawar.ivnu
http://crude-oil-sellers.com/all-about-light-crude-oil/
Now if South Africa was buying API 40-50 a super light crude, I would tend to agree with you, because super light crudes cannot be replaced in the market.
Nigeria sells lots of light crudes, and Nigeria is just around the corner.
FarCenter
(19,429 posts)New oil coming into production is mostly heavy crudes.
Many refineries are only capable of running light crude.
Replacing light crude with heavy crude means that dozens of refineries are going to be shut down, mainly old ones in developed countries.
FogerRox
(13,211 posts)More likely dedicated cat crackers will be added to existing capacity.
Sure Texas Int and Brent are not as replaceable, at API 38-39, especially light sweet crudes whose sulfur contents are under 2%. API's under 35 are still fairly common.
6 yrs ago KSA was 70% light crude
http://www.ravensworth.org/s-saudi.html
Future Estimates
Is the trend to heavy oil? Yes, Are benchmarks oils more nonfungible, yes. Yet the biggest sellers are light sour crudes API 31-35 sulfur content 2% or higher. And that is exactly what Iran sells.
FogerRox
(13,211 posts)southerncrone
(5,506 posts)Prometheus Bound
(3,489 posts)That sounds refreshingly democratic.
I wonder if the European countries did.
nanabugg
(2,198 posts)The west is so hypocritical makes one want to puke!