The European Union has confirmed that they have no thoughts on delaying or cancelling the proposed embargo set to begin on July 1st regarding EU countries providing shipping insurance for Iranian oil shipments.
The oil ban will begin on the 1st of July indefinitely, says the European Union. The EU is prepared to cope with any extra losses of Iranian crude exports, as a result, through Russia, Saudi Arabia and European oil inventories. Although some industry experts believe that the shipping sanctions make the impact of overall sanctions much larger than originally intended.
Asian importers of Iranian crude, particularly Japan and India, have been pressuring the EU to reconsider the insurance embargo. The insurance market in the UK is the leading provider of protection and indemnity cover for the shipping markets, according to Reuters.
Fox Business reports that the International Energy Agency estimates that the EU embargo on Iranian oil and U.S. sanctions against Iran's central bank could take between 800,000 and 1 million barrels a day of Iranian crude off the market. Additionally, the ship insurance sanctions could bring that total up to 1.5 million barrels per day, ultimately forcing an increase in the price of oil.
The EU did not deny that the sanctions could impose some extra costs on oil consumers, but said they were still the right approach.
Countries Recently Exempt from U.S. Sanctions
Secretory of State Hillary Clinton stated that all of these economies have significantly reduced their volume of crude oil purchases from Iran. Earlier in the year, she made exemptions for European Union nations and Japan.
- Republic of Korea
- South Africa
- Sri Lanka