Presenting a significant threat to Greece’s energy needs and overall economic well being, the looming EU-backed sanctions on Iranian crude has Athens struggling to find viable alternatives. Earlier this year, Greece joined countries like Spain and Italy in expressing their concern about the sanctions’ impact on their energy needs and were successful in winning a delay until this summer to find other producers. However, even with extra time, credit and production has presented a challenge to finding such options.
The country’s dependence on Iranian crude was highlighted in late February when state media outlets began reporting that a local refinery had been denied the delivery of 500,000 barrels. Ultimately, the reports were cast into doubt by government representatives, including Greece, Greek Environment, Energy and Climate Change Minister George Papaconstantinou who told Reuters that “we have contracts with Iran that are being executed normally.” However, with the July 1st sanctions deadline fast approaching, the reality of going without Iranian crude is becoming all the more pressing.
To make up for the coming crude deficit, leaders in Athens have begun openly exploring increasing deliveries from countries like Libya, though the exact of impact of such a shift has some worried. In the case of Libya, questions have emerged about Libya’s ability to overcome infrastructure deficits to reach pre-conflict goals for existing consumers, not to mention new ones.
For their part, Greek refiners have pointed to options in Russia, Iraq and Saudi Arabia as perfectly viable alternatives to Iranian oil, though funding might still be a stumbling block. Making up roughly a third of Greece’s energy needs, Iranian crude is currently sold under favorable credit circumstances; a situation Athens fears may change under new agreements, adding stress the country’s current economic standings. According to a Reuters report, concerns about access to credit have led some potential providers to avoid new agreements with Greek importers due to worries about national firms and their access to credit.
Reports from Eurostat have suggested a possible increase of Iranian imports ahead of the July 1st deadline, making the stockpiling of reserves ahead of such a significant drop off a possibility.