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Iranian oil embargo tough to impose

May 3, 2012 at 7:09 AM   |   Comments

BRUSSELS, May 3 (UPI) -- The global shipping industry is working to avoid Iranian crude oil but there are no guarantees that a full embargo can be enforced, industry leaders say.

The European Union in January agreed to a gradual ban on Iranian crude oil products. Its full implementation begins July 1. Ships found in violation of the sanctions would lose accident insurance.

Jesper Rosenkrans, a fuel trader at Maersk Oil Trading, told Bloomberg News there's no way to ensure Iranian crude oil is completely off the market.

"If somebody came to me and said, 'Can you guarantee there isn't 5 percent of some other product in a bigger pool,' then the answer would probably be 'no'," he said.

The International Energy Agency in April said Iranian crude oil production was down about 7 percent to 3.3 million barrels per day in part because of sanctions. Some governments have put sanctions on Iran's energy sector in an effort to diminish revenue available for its nuclear program, which some say is geared toward a weapon.

Ben Knowles, a partner at international trade law firm Clyde and Co., told Bloomberg that EU sanctions "were imposed in quite a hurry and there are bits that are impossible to comply with or ensure you are definitely clean."

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