* Parliament to vote on EU oil ban Sunday
* Aims to deny EU 6-month phase-in of embargo
* EU agreed on Monday to ban Iran oil imports from July 1
* Populist move could cause glut, may force Iran to discount
(Adds EU reaction, analyst comment, Friday prayers, oil price
By Hashem Kalantari and Robin Pomeroy
TEHRAN, Jan 27 A law to be debated in
Iran's parliament on Sunday may halt oil exports to the European
Union as early as next week, foiling an EU plan to phase in an
oil embargo gradually to help its struggling economies adapt,
lawmakers said on Friday.
"On Sunday, parliament will have to approve a 'double
emergency' bill calling for a halt in the export of Iranian oil
to Europe starting next week," Hossein Ibrahimi, vice-chairman
of parliament's national security and foreign policy committee,
was quoted as saying by the semi-official Fars news agency.
Parliament is pushing for the export ban to deny the EU a
six-month phase-in of the embargo on Iran's oil, which the bloc
agreed on Monday as part of a raft of tough new Western
sanctions aimed at forcing Iran to curb its nuclear programme.
The EU accounted for 18 percent of Iranian crude oil sales
in the first half of 2011, according to the U.S. Energy
Information Administration (EIA), making it Iran's
second-biggest customer after China.
"If the deputies arrive at the conclusion that the Iranian
oil exports to Europe must be halted, parliament will not delay
a moment (in passing the bill)," Fars quoted Moayed
Hosseini-Sadr, a member of parliament's energy committee, as
"If Iran's oil export to Europe ... is halted, the Europeans
will surely be taken by surprise and will understand the power
of Iran and will realise that the Islamic establishment will not
succumb to the Europeans' policies," he said.
Indicating the plan had the support of Supreme Leader
Ayatollah Ali Khamenei, the leader of Friday prayers at Tehran
university mocked the EU's decision to phase in sanctions.
"Why wait six months, why not right away? The answer is
clear. They are in trouble; they are grappling with crisis,"
hardline cleric Ahmad Khatami said.
The EU gave a muted response to the news.
"Yes, we have seen the reports about Iran's intentions,"
said a spokeswoman for EU foreign policy chief Catherine Ashton.
"But we have introduced our measures because of extreme
concerns regarding Iran's nuclear programme. Sanctions are not
the goal in itself," Maja Kocijancic said.
"We want to see Iran coming back to the negotiating table,
engaging in meaningful discussion on confidence-building
measures and demonstrate the willingness to address concerns
over its nuclear programme, without preconditions."
Iran's conservative-dominated parliament has previously
shown it is ready to force the government to take action against
what it sees as hostility from the West, and oil analyst Samuel
Ciszuk said it was likely the assembly would pass the EU ban.
"From a strictly political point of view, it makes sense to
demonstrate Iranian resolve and that it is not on the back foot,
particularly as the measure could hit European refiners at a
time of deep economic weakness," said Ciszuk, Middle East and
North African (MENA) analyst at consultancy KBC Energy
The sudden loss of such a big customer would create problems
for Iran too, however, and may force it to offer discounts to
other buyers in order to shift excess output.
"They would not be able to cater for that many days'
production in their floating storage capacity, which means NIOC
(National Iranian Oil Co.) would be under immense pressure to
place the volumes very quickly - translating into having to
offer discounts, most likely," Ciszuk said.
The news helped push Brent crude above $111.
In November parliament voted to expel the British ambassador
after London announced new sanctions ahead of other EU
countries. The day after that vote, radical Iranians stormed the
British embassy, causing London to withdraw all staff and close
Iran says its nuclear research is intended for civilian
purposes only, but the United States, the EU and others dispute
that claim, and the U.N.'s International Atomic Energy Agency
said in a November 2011 report that Iran had engaged in
activities consistent with weapons development.
Senior IAEA inspectors are arrive in Iran on Sunday for a
three-day visit that will be closely watched by the EU and
Washington for signs of any change of position that might lead
to a resumption of talks that stalled a year ago.
(Additional reporting by Justyna Pawlak in Brussels; Writing by
Robin Pomeroy; Editing by Jane Baird)