Iran loses oil buyer Greece over payment restraints

DUBAI Thu Apr 5, 2012 10:19am EDT

DUBAI (Reuters) - Iran's oil flows to Greece have stopped this month, depriving the Islamic Republic of one of its most loyal European customers and leaving Greece with its financing troubles struggling to buy elsewhere.

The European Union will impose a full embargo on Iranian oil imports from July 1 as part of an international stand-off over Tehran's nuclear program.

That has refiners in Europe and Asia scrambling for alternate suppliers, citing the banking difficulties in paying Iran for its oil.

Greece is considered more vulnerable than most buyers as it is suffering a major economic crisis and has relied heavily on Iran, supplier of more than half its oil imports some months last year.

Such imports rose as the EU country's woes prompted traders and oil majors to pull plug on supplies and banks refused to provide financing for fear that Athens would default on its debt.

On Thursday, Iranian state television Press TV reported that Iran had blocked oil sales to Greek companies Hellenic Petroleum (HEPr.AT) and Motor Oil Hellas (MORr.AT), accusing them of defaulting on payments.

Motor Oil Chief Financial Officer Petros Tzannetakis told Reuters that the company has no current business with Iran: "This (Iran) has been a closed issue for quite some time now. We've made alternative arrangements," he said, without elaborating.

A senior source at top Greek refiner Hellenic told Reuters on Tuesday it had suspended Iranian purchases because sanctions imposed made it impossible to pay.

U.S. and EU sanctions are designed to force Tehran to abandon uranium enrichment activities which they suspect are part of a program to develop nuclear weapons. Iran has repeatedly denied this, saying its nuclear know-how is for peaceful purposes only.

The United States has exempted Japan and 10 EU nations, including Greece, from financial sanctions because they have significantly cut their purchases.

But the exemption has little meaning because banks have grown reluctant to deal with Iranian oil-related transactions altogether.

The refiner stopped buying Iranian crude after the EU announced an embargo of Iran in January but was able until recently to take a monthly contractual cargo.

As part of Greece's efforts to find new oil supply, Hellenic secured a cargo of Russian Urals crude in a rare tender last month.

(Reporting by Marcus George, additional reporting by Julia Payne in London, Writing by Humeyra Pamuk, Editing by Jason Neely)

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Comments (1)
Logical123 wrote:
The title of this article is misleading. Iran did not “lose” Greece as a buyer of its oil. Iran stopped selling oil to Greece on credit since Greece has not been paying for the oil that it has already received.

Apr 05, 2012 1:17pm EDT  --  Report as abuse
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