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SA caves in to US pressure over Iran oil imports
23/03/2012 00:00:00
by Jon Herskovitz I Reuters
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SOUTH Africa has suspended almost all oil imports from Iran, its biggest crude supplier, in response to U.S. diplomatic pressure, a senior diplomat said on Thursday, adding Pretoria was unhappy about being strong-armed by Washington.

Iran accounts for about 29 percent of oil imports to Africa's biggest economy, according to the U.S. Energy Information Administration, making it tough to switch suppliers.

"(To my knowledge), no Iranian oil is flowing into our country," deputy foreign minister Ebrahim Ebrahim told a news conference. "If there is any, it is very little."

The comments raised some eyebrows in the industry after energy minister Dipuo Peters said only last week the country would take until the end of May to formulate a plan for replacing Iranian crude.

Her department was not immediately available for comment.

Avhapfani Tshifularo, executive director at the South African Petroleum Industry Association (SAPIA), said it was hard to believe how Ebrahim's comments could be correct given what the minister and her department said last week.

Earlier on Thursday, cabinet spokesman Jimmy Manyi said Pretoria had not decided what to do about the U.S. request.
"There's no decision made one way or the other, but cabinet is deliberating on Iran," he told a news conference.

South Africa is on a State Department list of 12 countries that buy Iranian oil and could have been subject to U.S. sanctions had it not significantly cut purchases.

Ebrahim said he did not agree with the U.S. move to impose sanctions on countries that purchase Iranian oil. But Pretoria was forced to abide by it due to the economic hit South Africa would take if it did not comply.

"We don't have any choice in the matter," he said. As a sovereign country, South Africa should be able to buy oil from wherever it wants, Ebrahim added.

The biggest buyer of Iranian crude in South Africa is Engen, majority owned by Malaysia's national oil company Petronas . The company could not be reached for comment.

Other refiners in South Africa include petrochemicals group Sasol, BP, Shell, Total and Chevron. BP and Chevron said in February they were not sourcing any Iranian crude.

Sasol confirmed on Thursday it had found alternatives to the Iranian product. The company said in January its oil unit was procuring 12,000 barrels per day, or 20 percent of the crude required by its Natref refinery, from Iran.


Sasol did not identify the new sources.

Some South African refineries are designed to treat Iranian-type crude only, and refiners would have been hard-pressed to replace those supplies with other products.

Any disruption in crude imports could further hit fuel supplies in South Africa, already volatile because of strikes and refinery problems.

Sasol is also in talks to divest its 50 percent stake in Arya Sasol Polymer company, a joint venture with Pars Petrochemical Company of Iran. The venture produces ethylene and polyethylene, which are used in the production of plastics.

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