Industry sees China gaining from Iran ban | world | Hindustan Times
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Industry sees China gaining from Iran ban

world Updated: Jan 28, 2012 01:17 IST

As the European Union prepares to ban Iranian oil and the United States turns the screw on payments, oil executives and policymakers say China and Russia stand to gain the most and Western oil firms and consumers may emerge the biggest losers.

Iran will continue to sell much the same volume of oil - 2.6 million barrels per day or around 3 percent of world supply - but almost all of it will flow to China, they reason. And being pretty much Iran's only remaining customer, Beijing will be able to negotiate a much reduced price.

The EU will ban Iranian oil from July. The United States plans sanctions on Iran's central bank and possibly its shipping firm. European headquartered oil firms such as France's Total and Royal Dutch Shell have already abandoned Iranian oil purchases or are in the process of doing so.

Japan and South Korea have signalled they may reduce purchases of Iranian oil to comply with US sanctions designed to put pressure on Tehran over its nuclear programme. That leaves a growing number of buyers competing for alternative supplies. Inevitably attention has turned to Saudi Arabia, the world's biggest exporter.