Wary of sanctions, Kenya cancels Iran oil deal

Wed Jul 4, 2012 2:57pm GMT

By Richard Lough and Duncan Miriri

NAIROBI (Reuters) - Kenya is cancelling an agreement to import 4 million tonnes of Iranian crude oil per year because of international sanctions against Iran, its top energy official said on Wednesday.

Kenya's move earlier this week to turn to Iran for up to 80,000 barrels of oil per day had surprised Western powers. Kenya is a key strategic ally in the U.S.-led fight against militant Islam in east Africa.

Britain earlier on Wednesday urged Kenya to reconsider the move at a time the international community is increasing pressure on Tehran over its disputed nuclear programme.

"We signed an MoU (memorandum of understanding), but it is being cancelled," Patrick Nyoike, permanent secretary in the energy ministry told Reuters.

"There is an embargo on Iranian oil. We don't want to get involved in the intricacies of international inter-governmental issues," he said.

The deal with Iran, signed last month, raised eyebrows at a time many importers of Iranian crude oil have sharply reduced purchases to earn exemptions from U.S. financial sanctions.

European sanctions, including a ban on imports of Iranian oil by EU states and measures that make it difficult for other countries to trade with Iran, came into effect on Sunday.

"Kenya should consider carefully whether its plans will fall foul or undermine these measures," a British Foreign Office spokesman told Reuters.   Continued...

An engineer conducts routine checks on oil tanks at a refinery in Wuhan, Hubei province November 27, 2008. REUTERS/Stringer
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