Azerbaijan, Baku, April 13 / Trend A.Badalova/
Saudi Arabia is the only country with a capability to replace Iranian oil on the European markets, Energy Security Analysis (ESAI) expert Andrew Reed believes.
According to Reed, oil from the world's two biggest producers, Saudi Arabia and Russia, is similar in quality to Iranian crude, and both export to Europe.
"However, only Saudi Arabia has the flexibility and willingness to increase production and direct more volumes to that market," Reed wrote Trend in an e-mail.
Saudi Arabia is the largest supplier of oil to world markets. According to Saudi Arabia's oil minister Ali al-Naimi, the country has around 65 percent of the world's spare oil production capacity and is able to release up to 2.5 million barrels per day (bpd) of additional oil into the market, and therefore to offset any shortfall from loss of supply from Iran.
This week Iran's Press TV reported that Iran has cut oil supplies to Germany. According to the U.S. Energy Information Administration Statistics, Germany imported about 18,000 barrels of oil per day from Iran during the second half of 2011.
Earlier Iran announced that it cut oil export to British and French companies as a step taken in retaliation of imposed sanction over Iranian oil import by EU on Jan. 23. Embargo on Iranian oil import by EU members will take effect on July 1. Last week Iran said that it banned oil sells to Greece and Spain, Iran's major European customers.
According to Reed, thus far, European crude stocks are holding up despite the cuts in Iranian deliveries.
"One reason is weak demand in the Mediterranean countries, where consumption of gasoline and diesel has plummeted," Reed said.
This week a source in the Energy Department of the European Commission told Trend that even in case of an abrupt halt of all imports from Iran, the EU will not be affected, because it is well stocked with oil and petroleum products to face a potential disruption of supplies. According to the source, current stocks amount to 136 million tons, equivalent to 120 days of consumption (well above the 90-day minimum) or 4.5 years of EU imports from Iran.