• Iranian souk. 'Nobody wants to be like North Korea. Nobody wants total isolation,' an EU diplomat said (Photo: kamshots)

Countdown begins to EU oil ban on Iran

20.06.12 @ 18:33

  1. By Andrew Rettman
  2. Andrew email

BRUSSELS - EU countries will stop buying Iranian oil on 1 July after nuclear negotiators left talks in Moscow empty-handed.

"The Iranians seemed to be under the impression that if they made some sort of vague undertaking, something not clear to anyone, then we would agree they have the right to enrich [uranium] and we would drop all the [oil] sanctions," a Western diplomat told EUobserver on Wednesday (20 June).

"They are masters of obfuscation. They just talk and talk and talk and keep putting new objections in the way," he added.

International powers - China, France, Germany, Russia, the UK and the US - on Monday and Tuesday in the Russian capital urged Iran to stop enriching fuel to near weapons grade, to hand over what enriched fuel it has and to close down a suspect facility.

EU foreign affairs chief Catherine Ashton, who led the talks with Iran's Saeed Jalili, told press afterward: "There is a very, very long way to go."

The two sides' technical experts are to meet in Istanbul on 3 July to discuss questions such as which part of Iran's Fordow nuclear plant might be switched off.

Prices for oil purchases in August dropped on Wednesday despite the looming market disruption.

Analysts noted the 3 July meeting bodes well for the diplomatic process, which is designed to prevent the nightmare scenario of an Iranian-Israeli war.

"It is significant that Iran agreed to meet after the European Union [oil] embargo," John Kilduff, from Again Capital in New York, told Reuters.

"[Despite the Moscow outcome] they have demonstrated that they are interested in this process and in this dialogue," a European diplomat told this website.

Iran in Moscow also avoided threats on blocking world oil shipments via the Strait of Hormuz in retaliation against the EU.

Jalili has never made the threat himself. But Iranian MPs have done it in the past during sensitive moments in the international process.

The nuclear talks are taking place amid lack of reliable intelligence.

One contact familiar with EU knowledge on the subject told EUobserver: "Iran already has a bomb ... Otherwise they [the US and Israel] would have attacked them a long time ago." Robert Baer, a former CIA officer specialising in Iran, said: "Who knows whether Iran has a bomb or not."

Meanwhile, EU diplomats stationed in Tehran report that the Revolutionary Guard - the military-industrial complex which shares power with Ayatollah Ali Khamenei - is keen to do business with the EU and the US if relations improve.

The EU oil embargo could have a knock-on effect in Syria.

Israel estimates that Iran must give Syria's sanctions-hit President Bashar Assad between $3 billion and $5 billion a year to help pay for irregular militia and to obtain fuel for his army.

But China, India and Japan's readiness to keep buying Iranian oil will take the edge off the EU ban.