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01.03.2012 12:09Western Sanctions Already Disrupt Iran Oil Exports -EIA
With world oil prices soaring, U.S. and European insurance companies are failing to insure deliveries of Iranian oil even before the full Western sanctions go into effect, according to a report by the Energy Information Administration on Wednesday
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Western sanctions on Iran are disrupting its oil exports and further restrictions could tighten global oil markets already hit by a rash of outages in other countries, a report required by the recent U.S. sanctions law said on Wednesday.
With world oil prices soaring, U.S. and European insurance companies are failing to insure deliveries of Iranian oil even before the full Western sanctions go into effect, according to a report by the Energy Information Administration on Wednesday.
"There is emerging evidence that some shipments of Iranian crude oil under existing contracts are being curtailed due to the unwillingness of U.S. and EU insurance providers to cover them," according to the EIA.
While the report, which must be updated every two months, shed little new light on global oil markets, the emphasis on the limited spare crude capacity could give the Obama administration more leeway to offer waivers to Iran's biggest customers, including China, Japan and India.
The administration, concerned about soaring U.S. gasoline prices ahead of November elections, hopes to avoid inflaming global markets as it implements the sanctions.
"With oil inventories and spare OPEC production capacity running low, consumers don't have much buffer against additional disruptions in supply," said Trevor Houser, a partner at Rhodium Group and a former State Department adviser, as quoted by Reuters.
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