MP: Italy, Japan, China Increase Purchase of Iranian Oil

Italy, Japan, China and Malaysia are buying more oil from Iran, a member of the nation's Majlis (parliament) said.

Ali Aliloo, representative from Iran's East Azerbaijan Province, said some of 19 countries, who are exempt from having to follow the oil embargo against Iran have announced they will increase their purchases, the tabnak.ir website reports.

The United States sanctions over the Iranian Central Bank came to force on 28 June whereby a new US law penalises countries that do business with the Central Bank of Iran (CBI) by denying their banks access to the United States financial markets. Blacklisting the CBI which involves transferring payments for exported Iranian crude oil is leading to a decrease in Iran's oil exports by 50 per cent to 1.1 million barrels per day, costing more than $3 billion which the Iranian government lost per month. Its 50 per cent of revenues relies on oil exports.

All of 20 Iranian oil customers decreased oil purchases from Iran from 20 percent to 100 percent, which forced Iran to shut off some oil wells because of lacking enough export and storage capacity.

However Aliloo said that the measures taken by Iran's oil minister will erase the effects of oil sanctions the international community has levied against Iran, Aliloo said.

According to MP, it is also likely that the price of Iran's oil on the world markets will go up from $90 (USD) to $120 a barrel because of the sanctions.

Iran's economy is under pressure of international sanctions against the country's oil industry and its Central Bank. July 1 marked the start of the European Union's embargo against Iran's oil, adding even more stress to the country's economy.

Imposing tougher sanctions means that Iran's oil carriers, or any ship carrying Iran's oil, are no longer insured as 95 percent of shipping companies are covered by the EU insurance.

The sanctions are part of an effort by the U.S. and to make Iran become more transparent about its nuclear development programme. Iran says its programme is peaceful and civilian in nature, while the West disagrees.

EU has banned Iran's oil purchase, but Italian Eni and Spanish Reposol companies have about $1.6 billion debts from Iran because of joint oil contracts in past, then the Union has permitted them to keep oil purchase from Iran to close Iran's debts until Sep.15, an European official told Trend anonymously earlier.