Credit hurdles remain hindrance to Iran oil trade

Thu Nov 18, 2010 1:41pm GMT

* Banks remain reluctant to finance Iranian oil trade

* Iranian crude supplies to IEA members fall in August

* Iran says drop in trade with China, Japan, only temporary

By Alex Lawler and Dmitry Zhdannikov

LONDON, Nov 18 (Reuters) - Oil trade with Iran remains more difficult following tougher sanctions against the Islamic Republic, industry sources said, despite a message from the European Union that such operations are legal.

Saras, an Italian oil refiner, said last week that transactions with Iran have become more challenging as banks are reluctant to get involved. Other European oil companies have made similar remarks privately.

"The banking side is the tough part. It is very tough. It has to be banks that haven't got any kind of interests in the United States," said an Iranian crude oil customer in Europe.

Iran is a major oil exporter and its production is equal to about 4.2 percent of daily world demand. The amount of Iranian crude sold to countries that are members of the International Energy Agency declined by 22 percent in August.   Continued...

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