Iran halts oil sales to UK, France on eve of talks

TEHRAN (Reuters) – Iran ordered a halt to its oil sales to Britain and France yesterday in a move seen as retaliation against tightening EU sanctions, as a team of UN inspectors flew to Tehran to press the Islamic Republic over its disputed nuclear programme.

The European Union enraged Tehran last month when it decided to impose a boycott on its oil from July 1. Iran, the world’s fifth-largest oil exporter, responded by threatening to close the Strait of Hormuz, the main Gulf oil shipping lane.

Yesterday, its oil ministry went a step further, announcing Iran has now stopped selling oil to France and Britain altogether – a powerful yet largely symbolic message since neither European nation relies on Iranian crude imports. “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 on the ministry website. Iran, which denies Western allegations that it is seeking to make nuclear weapons, has ramped up its rhetoric in recent weeks while also expressing willingness to resume negotiations on its nuclear programme. A five-member team from the UN International Atomic Energy Agency (IAEA) flew to Tehran late yesterday for talks, although Western diplomats have played down any hopes of a major breakthrough in the two-day meeting.

“I’m still pessimistic that Iran will demonstrate the substantive cooperation necessary,” one envoy said in Vienna.

Yet the outcome of this week’s discussions is important and will be watched closely because it could either intensify the standoff or offer scope to reduce tensions.

The European Commission says the bloc would not be short of oil if Iran stopped crude exports as it has enough stock to meet its needs for around 120 days.

Industry sources said European oil buyers were already making big cuts in purchases from Iran months in advance of EU sanctions. France’s Total has stopped buying Iranian oil while debt-ridden Greece is most exposed to Iranian crude disruption among European countries.

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