Iran retaliates: Cuts off oil sales to UK, France
The move has been expected for weeks so the governments of France and Great Britain have had a little time to plan.
More to the point, Iran continues to bluster and bluff as their economy tanks and the world starts choosing sides in what is shaping up to be an inevitable conflict.
"Exporting crude to British and French companies has been stopped ... we will sell our oil to new customers," spokesman Alireza Nikzad was quoted as saying by the ministry of petroleum website.
Iran's oil minister said on Feb. 4 that the Islamic state would cut its oil exports to "some" European countries. The European Commission said last week that the bloc would not be short of oil if Iran stopped crude exports, as they have enough in stock to meet their needs for around 120 days.
Industry sources told Reuters on Feb. 16 that Iran's top oil buyers in Europe were making substantial cuts in supply months in advance of European Union sanctions, reducing flows to the continent in March by more than a third - or over 300,000 barrels daily.
France's Total [TOTF.PA 41.68 0.40 (+0.97%) ] has already stopped buying Iran's crude, which is subject to fresh EU embargoes. Market sources said Royal Dutch Shell [RDSA.L 2293.00 -1.00 (-0.04%) ] has scaled back sharply. Among European nations, debt-ridden Greece is most exposed to Iranian oil disruption.
Gas prices worldwide have already begun to spike in anticipation of further cuts by Iran and the rise of tensions in the region. With at least some officials in the US now predicting that sanctions will fail, which could mean an attack on Iran by either the US or Israel, speculators have begun to ratchet up the price of crude in anticipation of conflict.
Sniff the air. What do you smell? The stink of war is palpable. And Iran isn't helping matters any by cutting off oil sales to European countries.