Bruce Crumley discusses the EU agreement “in principle” to ban Iranian oil imports:
And perhaps not just European partners—which is where the second risk of the boycott going wobbly arises. Turkey, for example, gets about a third of its oil from Iran—and could up that amount if Tehran undercuts the E.U. ban by boosting exports to other clients at discounted prices. The same could happen with China, which has already been exploiting Iran’s sanction-choked economic situation to demand better deals in oil transactions. Experts quoted in media reports generally agree Tehran would probably have little trouble finding buyers for European-shunned oil exports—particularly in Asia, and especially if Iran is ready to make an effort on pricing to keep its sales volume up. For the pending E.U. oil ban to have much impact, then, European and American leaders would need to somehow convince decidedly independent-minded nations like China to play along, as well as countries like Turkey—which remains angered at E.U. refusal to grant it membership, and has just embarked on a nasty diplomatic dispute with Paris [bold mine-DL].
Even if all that were to go well, other perils exist. First, the ban could find many or most European nations having to pay considerably more to new oil suppliers—an expense that could speed up and deepen the slide of E.U. economies into recession.
Given the conditions in Europe, this decision is almost inexplicable. This is a move that probably will not have any constructive effect on Iranian regime behavior, but it will likely impose higher energy costs on European economies. If it “works” as intended, it will contribute to the deterioration of the Iranian economy, which will have the greatest impact on the civilian population rather than the regime and its cronies, and that doesn’t mean that Tehran is going to become more accommodating on the nuclear issue. If it fails because other states continue doing business with Iran, it will have harmed Europe’s recovery (which matters far more to the U.S. than what Iran does with its centrifuges) and escalated tensions to no good effect. As Vali Nasr warns today, intensifying pressure on Iran could blow up in our faces:
Consequently, the Iranian regime thinks it can counter international pressure on its nuclear activities long enough to get to a point of no return on a weapons program.
Rather than discourage this aggressive Iranian position, U.S. policy is encouraging it, making a dangerous military confrontation more likely. There are no easy options for dealing with Iran, but not persisting in a failing strategy is a good place to start.
Update: Cyrus Sanati explains why a European embargo will have limited effect on Iran:
As for the potential European embargo, as long as oil demand from importing nations outside the embargo exceeds Iran’s 4 million barrel a day production capacity, there will always be a home for Iranian oil. Iran’s oil is relatively fungible, with both light and heavy grades, so it could run through most refineries with limited adjustments necessary to be processed into refined products, like gasoline and heating fuel. The limited amount of oil that Iran did export to the EU, mostly to Spain and Italy, will eventually be diverted to China or to another Asian country not participating in the embargo. While this change will have a destabilizing effect on the world oil market in the short run as the barrels get switched around, it will eventually work itself out.