Greek suppliers concerned about the potential default of Greece have shut off financing for oil. In turn this has caused Greece to turn to Iran. However, the EU is now threatening to impose more sanctions on Iran over nuclear issues. If the EU acts that stupidly, the Greek economy will shut down.

Please consider Greece turns to Iranian oil as default fears deter trade

Nov 11, 2011
Traders said Greece has turned to Iran as the supplier of last resort despite rising pressure from Washington and Brussels to stifle trade as part of a campaign against Tehran’s nuclear program.

The near paralysis of oil dealings with Greece, which has four refineries, shows how trade in Europe could stall due to a breakdown in trust caused by the euro zone debt crisis, which is threatening to spread to further countries.

More than two dozen European traders contacted by Reuters at oil majors and trading houses said the lack of bank financing has forced Greece to stop purchasing crude from Russia, Azerbaijan and Kazakhstan in recent months.

Greece, with no domestic production, relies on oil imports and in 2010 imported 46 percent of its crude from Russia and 16 percent from Iran. Saudi Arabia and Kazakhstan provided 10 percent each, Libya 9 percent and Iraq 7 percent, according to data from the European Union.

“They are really making no secret when you speak to them and say they are surviving on Iranian stuff because others will simply not sell to them in the current environment,” one trader in the Mediterranean said.

EU Considers Oil Sanctions on Iran

Reuters reports EU mulls new sanctions against defiant Iran

Nov 10
The European Union may approve fresh sanctions against Iran within weeks, after a U.N. agency said Tehran had worked to design nuclear bombs, EU diplomats said Thursday.

Iran denies trying to build atom bombs and its Supreme Leader Ayatollah Ali Khamenei said any U.S. or Israeli attack on its nuclear sites would be met with “iron fists.

Iran already faces a wide range of U.N. sanctions, as well as some imposed unilaterally by the United States and the EU.

New EU sanctions would be a significant part of Western efforts to ratchet up pressure on Tehran after the U.N. nuclear watchdog’s report this week that laid bare a trove of intelligence suggesting Iran is seeking nuclear weapons.

Tehran, which says its nuclear program is for producing electricity and other peaceful purposes, said Wednesday it remains ready for negotiations with world powers on the issue.

Economic Insanity

Banning Iranian oil would be the kiss of death for the Greek economy and economic insanity in general for Europe. Given the oversupply of economically insane ideas lately, it is difficult to predict the outcome.

Mike “Mish” Shedlock
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