Possible Iran Sanctions Cause Worry In Greece

Jan 5, 2012
Originally published on January 6, 2012 12:55 pm
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The European Union is expected to ban Iranian oil imports later this month. The effort is meant to dissuade Tehran from pursuing a nuclear weapons program.

But Joanna Kakissis reports that the sanctions could also hurt Europe and especially Greece, which is worried about fuel shortages.

JOANNA KAKISSIS, BYLINE: Analysts say that the ban could deepen Europe's recession by causing oil prices to rise. But the intent of the sanctions is to make things tougher for the Iranian government. Iran now sells about 20 percent of its oil to Europe, with Italy, Spain and Greece its top customers. Greece imports about a third of its crude from Iran. The two countries have had strong ties for years.

Evangelos Venetis, an Iran scholar in Athens, explains.

DR. EVANGELOS VENETIS: Greece has been one of the most friendly countries towards Iran in the 20th century and - both prior and after the Islamic Revolution. Both countries share a mutual respect, and these have an impact on political and economic relation.

KAKISSIS: And economic relations are very important to Greece right now. It's weathering its worst debt crisis in recent memory. This has put Greeks in a bind, says Robin Mills, an energy consultant in Dubai.

ROBIN MILLS: One reason why Greece is so dependent on Iranian oil right now is because of the credit terms, and Iran has been prepared to offer very easy credit. And I don't think any other supplier - whether Russia or somebody else - would be so keen to offer easy credit. There'd be no real reason for them to do so.

KAKISSIS: Mills says he expects the E.U. to help Greece find other suppliers.

MILLS: So what would be expected, I think, if the E.U. were to put sanctions on Iranian oil is that probably, it would do what it did with Syria earlier in 2011, when they put sanctions on Syrian oil. They gave several-month period of - a grace period for the refineries and the oil customers to find other suppliers, before their sanctions came fully into force.

KAKISSIS: Greece also has other options to alleviate fuel shortages. Energy journalist Kostis Geropoulos believes Russia and Kazakhstan would sell oil at a discount. And Geropoulos says...

KOSTIS GEROPOULOS: There could be more natural gas. I mean, Greece is already importing natural gas. They could use more coal. And there could be a lot more conservation going on.

KAKISSIS: And in this economy, Greeks are already conserving fuel. They took about 250,000 cars off the road last year to save money.

For NPR News, I'm Joanna Kakissis in Athens. Transcript provided by NPR, Copyright NPR.