Iran’s decision to halt sales of crude oil to French and British buyers to pre-empt a European Union ban on imports will have “no impact on Britain’s energy security or supplies,” said UK Foreign Secretary William Hague.

Iran “will give its crude oil to new customers instead of French and UK companies,” the Shana oil ministry news website reported, citing Alireza Nikzad Rahbar, a ministry spokesman. The announcement came as OPEC’s second-biggest producer negotiates contracts to supply China.

The action may “prompt further price gains for crude,” John Caiazzo, president of Acuvest Commodity Brokers Inc. in Temecula, California, wrote in a note to clients today.

France got 4 percent of its oil imports from Iran in the first half of 2011 and the UK 1%, according to the US Energy Information Administration. Iran will raise crude volumes sent to China “soon,” the state Mehr news agency said February 16.

The producer is suspending exports as tension rises in the Gulf over its nuclear program, sending oil prices to the highest level in nine months. The EU and US have imposed additional sanctions against the country, restricting trade and financial transactions. Iran, the largest producer in the Organization of Petroleum Exporting Countries after Saudi Arabia, is also under four rounds of United Nations sanctions.

“The Iranian government can act to bring sanctions to an end,” Hague said in comments today to lawmakers in the House of Commons in London. “Our ultimate goal is a return to negotiations that addresses all the issues of concern about Iran’s nuclear program and the successful conclusion of those negotiations.”

More cuts threatened

The country threatened to halt shipments to Italy, Spain, Portugal, Greece, France and the Netherlands when it summoned their ambassadors to the Foreign Ministry on February 15 to protest the EU’s punitive measures, state media reported. Iran would end sales of crude to the six countries unless they agreed to long- term contracts and payment guarantees, state-run Press TV reported that day, without citing anyone.

EU nations bought a combined 18% of Iran’s exports of crude and condensates, or 452,000 barrels a day, in the first half of 2011, according to the EIA’s most recent data. France purchased 49,000 barrels a day and the U.K. 11,000 barrels.

The EU said today its member countries are cutting oil purchases from Iran and have sufficient reserves to deal with disruptions. Some of the 27 nations, such as the U.K., Austria, Portugal, Belgium and the Netherlands, have already stopped buying and others including Italy, Spain and Greece are reducing imports, Marlene Holzner, an energy spokeswoman for the European Commission, said in an e-mailed reply to questions. (© 1995-2011, The Jerusalem Post 02/21/12)