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Reuters and Bloomberg are both reporting that the European Union is close to imposing an embargo on Iranian oil. The Wall Street Journal goes a step further, saying that now that Greece has dropped objections to the ban, the EU has reached a preliminary agreement.
One diplomat told the paper: "There is a converging consensus in principle on an oil embargo. I don't see any fundamental opposition."
Iran, which has already been battered by sanctions from the United States, maintained they could simply sell the oil to someone else. Reuters reports:
"Tehran had already considered different routes if that were to happen, S. M. Qamsari, International Director of the National Iranian Oil Co (NIOC), told Reuters by telephone from Tehran shortly before the report on the EU stance emerged.
"'We could very easily replace those customers,' said Qamsari. Some, but not all, of any displaced volume could move into China as well as other Asian countries and Africa, he said. Iran was unlikely just to store crude on tankers as that was only a short-term solution."
As we've reported, these sanctions are the result of a United Nations report that found Iran had worked and might still be working on producing nuclear weapons. As The Christian Science Monitor reports, today, the sanctions have taken their toll: In the past week, Iran's currency has dropped as much as 30 percent.
Europe, reports Reuters, makes up about half of Iran's oil business and the sanctions have left Iran in a weak negotiating spot. China, for example, has cut "its order of Iranian oil by more than half this month." If Iran is stuck with a ton of oil, it may be forced to sell it cheaply and that will hurt its profits.
Also, this news, along with the tensions between the U.S. and Iran, have driven the price of oil up.