EU Sanctions Strangle Iranian LPG Exports to Asia
By Julia Payne and Meeyoung Cho
LONDON/SEOUL, Oct 31 (Reuters) – EU sanctions on Iran’s natural gas have unintentionally also brought its exports of liquefied petroleum gas to a near halt, industry sources say, starving Tehran of yet more dollar revenue and threatening to push European winter fuel bills yet higher.
LPG, which comprises propane and butane, comes mainly from oil rather than natural gas, but shippers and insurers are steering clear of Iranian supplies due to uncertainty over the scope of the new European Union sanctions.
“It’s a grey area if natural gas includes LPG or not,” said one LPG trader. “Not many want to take a risk on that.”
Earlier this month the EU announced tighter restrictions on trade with Iran, adding to already comprehensive international sanctions aimed at forcing Tehran to halt its nuclear programme.
These included a ban on importing and transporting Iranian gas, as well as financing gas sales. Western nations suspect Iran is trying to develop atomic weapons, something that Tehran denies, but the gas curbs had appeared symbolic as Iran exports none to the EU.
In reality, the measures announced by EU foreign policy chief Catherine Ashton are already strangling Iranian LPG exports to countries outside the bloc, notably South Korea.
Officially, the gas sanctions became binding on EU governments from Oct. 16 but technically they do not apply to companies until detailed legislation is prepared and issued. An EU source said this could happen in November.