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Saturday, April 21, 2012

Greece Oil Shock

In January I warned that the EU embargo on Iranian oil would cause Greece problems:
"There has been much hype and sanctimonious puffing of chests from the EU about its agreement "in principle" to ban imports of oil from Iran.

However, as
Paul Stevens economist and emeritus professor at Dundee University in Scotland notes, Greece currently imports 30% of its domestic oil from Iran on favourable terms.

Were Iranian oil imports to be banned, where would Greece get its oil from?

Saudi Arabia?

Maybe, but at an economy busting $150+ per barrel.

As with all EU "plans" this one has not been thought through
In February I noted that:
"They are currently negotiating for supplies of oil from elsewhere, any admission that their supplies have been cut will negatively impact those negotiations and cause panic buying in Greece."
As predicted, things are not going well; as reported by News.AZ:
"The EU has postponed an April deadline to review the impacts of the bloc’s embargo on oil imports from Iran due to Greece's concerns on finding new oil suppliers."
As ever with all EU "plans", no one has bothered to think through the consequences of them.

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