Last Italian bank suspends Iran oil deals

Reuters, Tuesday 21 Dec 2010

A tightening of international sanctions against Iran has complicated financing of any deals involving buying Iranian crude or selling refined oil products to the Islamic Republic, the world's fourth largest crude oil exporter.

"They have stopped from last month. They were the last Italian bank available for Iranian crude. I guess people will have to look elsewhere for financing now. Maybe China. But it is getting more and more difficult," a trading source said.

Two other trading sources confirmed the development. Intesa SanPaolo declined to comment when contacted by Reuters.

The financing hurdle follows a host of sanctions on Iran over its nuclear work passed this year by the United Nations, European Union and the United States. Tehran denies the West's charge that it is seeking to build nuclear weapons.
have remained among regular buyers of Iranian crude this year but many traders say the volumes may shrink next year under pressure from the international community.

"Business is continuing but much less than before," said a crude trader with a European oil company.

The United States has said it expects Total, Statoil, ENI and Shell to abandon involvement in projects in Iranian oil and gas fields to avoid sanctions. Still, some companies are continuing to buy Iranian crude. Some have said doing so is exempt from United Nations sanctions, and the European Union said in October its measures against Iran were not intended to restrict oil dealings.

Italian energy major ENI has said it will continue to receive Iranian crude for at least another three years as Tehran still owes it about $1 billion from old deals. But Saras, an Italian oil refiner, said last month that transactions with Iran have become more challenging as banks are reluctant to get involved.

Iran pumps 3.7 million barrels per day of crude oil, equal to about 4.2 percent of daily world demand. There is little publicly available data on the buyers of Iranian crude but according to the International Energy Agency, which represents 28 industrialised countries, shipments to IEA member-countries in Europe fell in September.

Exports of Iranian Light crude to European IEA members have fallen to 180,000 bpd in September from 400,000 bpd in July, according to the IEA. Even so, September exports were slightly up year-on-year.
Supplies of Iranian Heavy crude to Europe declined to 660,000 bpd in September from 800,000 bpd in July. Shipments were also up year-on-year, rising from 440,000 bpd in September 2009.

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