LONDON, - Iran's oil buyers in Europe are progressively cutting volumes in advance of a European Union ban on Iran crude from July 1 and have reduced their April purchases by 75,000 barrels per day (bpd), industry sources said on Wednesday.
Tehran in 2011 supplied more than 500,000 bpd to the EU plus 200,000 bpd to Turkey. Its supply to the EU fell to about 425,000 bpd in March and is down a further 75,000 bpd in April, according to industry sources and Reuters calculations.
"People are trying to diversify their supplies and to prepare for July," said a trader at a European oil company no longer buying Iranian crude.
The EU announced in January plans to embargo Iran's crude from July, and Washington and Brussels sanctioned Iran's central bank. The West suspects Iran is trying to develop atomic bombs, while Iran insists its nuclear programme is solely for civilian purposes.
The latest figures indicate that Iran's smaller European customers, mainly in Italy, are continuing to buy the same
amounts of oil. "Until June 30, we are allowed to lift," said a source at a small buyer. "As far as I know, it is business as usual up until
the start of the sanctions."
The sources declined to be identified by name because they were not authorised to speak to the media.
Hellenic Petroleum of Greece has halted purchases, a company source said on April 3. Royal Dutch Shell has scaled back its buying of Iranian crude into Europe from around 100,000 bpd in 2011, industry sources said. Shell's Chief Executive Peter Voser said in early March that the company would stop buying Iranian crude entirely within weeks.
Those that have reduced Iranian imports are filling the void with a range of replacement barrels from top exporter Saudi Arabia as well as Iraq and Russia.
Top Spanish oil refiner Repsol has stopped importing crude from Iran and has replaced most of that supply with Saudi Arabian oil, a company spokesman said on April 10. Saudi Arabia, pumping at the highest rate in decades at close to 10 million bpd, has made clear to customers that extra
cargoes can be made available if needed, oil executives said.
Another industry source said his firm had received more enquiries for Russian Urals crude from companies that formerly bought a large amount of their oil from Iran.
"This is an indication that the volume of Iranian is not going to be the same," the source said.
A further source of additional crude is Iraq. The country is expected to provide the world's largest expansion in oil export capacity in 2012 as new ports ease a capacity bottleneck.
As well as Italian companies, Turkey has not changed its purchases of Iranian crude so far.
But cutbacks appear to be on the way. Turkey said on March 30 it would cut imports of oil from Iran by a tenth, ceding to U.S. pressure to reduce purchases.
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