Adriene Hill: Now to Europe, where the European Union this morning formally adopted an oil embargo against Iran. The embargo applies immediately to new oil deals and allows existing contracts to run through July. The sanctions also target other aspects of Iran’s economy, like the central bank, and gold trading. And it’s one of a series of sanctions against the country over its nuclear program.
For more we go to Jonathan Marcus. He’s the BBC diplomatic correspondent in London. Good morning.
Johnathan Marcus: Good morning.
Hill: So there are already American sanctions, international sanctions — what’s new about these?
Marcus: Well, what’s crucial with these is that the Americans have tried to constrain Iran’s oil industry. But of course, American itself doesn’t buy their oil from Iran, the Europeans do. Some European countries are heavily dependent upon Iranian oil. Greece buys about a third of its oil from Teheran; Italy and Spain buy a little over 10 percent of their oil from the Iranians. So cuts here will have a significant impact on Iran’s economy.
Hill: Now you just mentioned Greece and Italy. We know they’re in some economic trouble — could this sanction end up hurting them as well?
Marcus: Potentially it could, and that’s why I think the European Union has decided to phase in the sanctions. There will be no new contracts from now on, but existing contracts will continue to run until July and I think this phased approach towards the sanctions is clearly intended to allow countries like Greece, Italy and Spain — which you rightly say are amongst the weakest elements of the European Union at the moment — to get alternative supplies elsewhere. Of course, nobody wants to see an oil crisis — which on the one hand, would greatly complicate Europe’s economic difficulties and all the problems around the euro and so on. But equally, a significant increase in the oil price would, paradoxically, benefit Iran as well.
Hill: Jonathan Marcus is the BBC’s diplomatic correspondent in London. Thanks so much!
Marcus: Great pleasure.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
