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Greek refiner stops Iran oil buys, banking a problem
April 3, 2012 / 12:50 PM / 6 years ago

Greek refiner stops Iran oil buys, banking a problem

April 3 (Reuters) - Greece’s top refiner Hellenic Petroleum has suspended purchases of Iranian crude in April as approaching sanctions on Tehran have made banking payments virtually impossible, a senior source at the firm said.

Greece’s financial difficulties have made Athens reluctant to reduce its purchases of Iranian crude, which is cheap, ahead of a EU-wide embargo that is due to come into force on July 1.

But the source at the refiner, who asked not to be named because of the sensitivity of the issue, said no European Union banks were willing to handle the business any more, forcing it to suspend buying this month.

“We were using a Turkish bank all the time but we have to use an EU corresponding bank to make the payment from our Greek bank to the Turkish one and the EU banks are refusing that,” the source told Reuters.

“It is very unlikely we will lift (Iranian oil) in May. We can’t pay. If we can later, we will respect our contract but only lift the minimum,” he added.

Hellenic declined to comment.

The European Union will impose a full embargo on Iranian oil imports from July 1 as part of an international standoff over Tehran’s nuclear programme, while the United States is looking to tighten its sanctions on the Islamic Republic, to penalise anyone who deals with the Iranian central bank.

Greece’s debt problems mean it has struggled to purchase oil from other suppliers as banks have pulled the plug on financing exports, although a second bailout deal between Greece and international lenders in March has helped improve the country’s debt profile.

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

The Hellenic source said the refiner had hoped the U.S. decision would ease the situation.

“(But) in practice it is not applied. The banks are not clear on what they can do, so for them it is safer to do nothing,” the source said.

He said the company was now buying crude grades similar to Iranian oil, mainly Urals crude from Russia, as well as Saudi Arab Light grade although the high official selling prices for the latter have capped April purchases at just one cargo.

In May, it will look to increase purchases of Saudi crude and is also looking at oil from Iraq’s Kirkuk, he said.

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