Iran oil ban could herald economic disaster for Europe

Oil prices could spiral out of control and potentially herald deeper economic hardship for Europe if the European Union joins the U.S. Oil prices could spiral out of control and potentially herald deeper economic hardship for Europe if the European Union joins the U.S.in banning Iranian oil imports, analysts warned.

EU officials said on Wednesday that European governments agreed in principle to ban imports of Iranian oil. 

But several countries within the EU are heavily reliant on oil imports from Iran, and none more so than economically struggling Greece, which currently imports 30 percent of its domestic oil from the country, according to the International Energy Agency (IEA). 

Greece to collapse 

Greece’s economy is already mired in deep recession and could feasibly collapse entirely if the sanctions were imposed, Paul Stevens, economist and emeritus professor at Dundee University in Scotland, told CNBC.

Were that to happen, the Greek economy could take its European neighbors down with it. But the likelihood would be that Greece would have to ignore the import ban and that the EU would have to allow it to in order to avert economic disaster.

“Let’s assume the European Union is stupid enough to go along with the U.S. in imposing sanctions on Iran. That would only mean 250,000 barrels of heavy sour oil not coming into the EU,” Stevens said. More