European refiners are replacing Iranian crude imports before an EU embargo comes into force in July. Shipments from Iran have fallen below 150,000 b/d from 775,000 b/d last year (see graph). Buyers are taking sour grades from Iraq, Saudi Arabia and Russia instead. EU sanctions introduced in January prevent European banks from funding Iranian crude purchases, but allow existing term contracts to continue until 1 July. Some firms, mainly Italian and Spanish refiners, are still taking Iranian crude shipments, but are finding transport, insurance and financing increasingly difficult to arrange.
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