Sanctions on Iran: Iranians face shortages of rice, corn, and cooking oil
US and European sanctions are preventing Iran from buying enough rice, cooking oil, and other staples, say commodities traders. Prices for food are rising in Iran.
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A senior executive of a U.S. oil company said Saudi exports have risen by 200,000 barrels a day, mostly to Asia, making up for most of the decline in China's imports of Iranian oil. China has also been increasing its purchases from Russia and West Africa, oil traders say.Skip to next paragraph
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Energy is not the only Iranian export that has been hurt. Traders said that China is likely to cut its purchases of Iranian iron ore as well, worth $2 billion a year.
"There is a huge risk ahead, and many haven't realised it yet," said a senior executive at a Shanghai-based trading firm that has a long-term partnership with an Iranian ore supplier.
"It is easy for the United States to freeze our business, forcing large Chinese Iran ore traders, which have large trading volumes with Iran, to be more cautious when making bookings. It's not worth taking the risk."
A Chinese iron ore buyer based in eastern China's Shandong province said some of his Iranian suppliers had rushed shipments, a sign that they too were worried about potential payment problems. Shipments booked in February had arrived early, and he expected imports to decline by March.
The new U.S. sanctions, which come into effect gradually by June, would make it impossible for countries to use the international financial system to pay for Iranian oil. Washington has said it will provide waivers to countries to prevent chaos on oil markets, but wants them to demonstrate that they are cutting imports in order to receive the permits.
The sanctions have been imposed to halt Iran's nuclear programme, which the West believes is being used to develop a nuclear bomb. Iran's leadership says the nuclear programme is peaceful, and it is willing to endure sanctions to maintain it as a national right.
Last month, Iran took the important step of beginning production of highly enriched uranium at a new facility hidden deep under a mountain, where it would be difficult for U.S. or Israeli warplanes to destroy it.
Talks between Iran and the West over the nuclear programme broke down a year ago. Iran has repeatedly said it wants to restart the talks, but has refused Western demands to make clear first that its uranium enrichment would be up for negotiation.
As the sanctions have tightened, Iranian officials have made repeated threats of military strikes against Mid-East shipping and the United States, which protects the Mid-East oil trade with a giant flotilla based in the Gulf.
In the latest threat, the Iranian ambassador to Russia said Tehran was prepared to attack U.S. interests "anywhere in the world" if Washington launches a strike on Iran. (Additional reporting by Ruby Lian in Shanghai, David Stanway and Judy Hua in Beijing, Cho Mee-young in Seoul, Marwa Rashad in Riyadh, Ratanajyoti Dutta and Mayank Bhardwaj in New Delhi, Qasim Nauman in Islamabad, Alex Lawler in London and Vladimir Soldatkin in Moscow; Writing by Peter Graff; editing by Janet McBride)