After months of wrangling, the European Union’s embargo on oil from Iran went into effect today, reportedly leaving large quantities of Iranian crude oil anchored off the coast, with a dwindling number of nations to sell it to.
The embargo is designed to dramatically harm the Iranian economy, and officials hope it will cut their exports by as much as half, but as Iran braces for this impact, the question remains open: will this hurt Iran more, or the West?
Iran will surely be impacted, as sanctions have crippled most of its private sector and have led to rising inflation. Though oil continues to flow, reports have suggested nations like China are getting a discount by virtue of the few markets for Iranian crude.
The price of oil spiked on Friday, with experts attributing the nearly 10 percent increase in costs almost entirely on the loss of Iranian oil from the Western market. Iran will continue to sell its oil in eastern Asia, though nations are being given permission to continue the imports on the condition that they limit them as best they can.
The permission from the US to keep buying Iranian oil gives nations like China access to cheaper product that has been forced off of most of the world market by US and EU edicts. But it is forcing a number of EU nations, which had been buying heavily from Iran, to try to find alternative supplies, and those are becoming costly indeed.