A Review of the Nigerian Energy Industry

Kenya bows to pressure, revokes oil deal with Iran

05 July 2012, Sweetcrude, NAIROBI – KENYA may have bowed to political pressure from the UK, revoking an oil purchase deal with Iran.

Coming barely days after a European Union ban on Iranian oil came into effect, the action by the Kenyan government affects 4 million tonnes of Iranian crude, which the East African country had earlier signed up to give relief to the
Arab country, which oil has come under crippling embargo from the US, EU and others.

On Wednesday, soon after the UK called on Kenya to reconsider its deal with Iran, Reuters quoted Patrick Nyoike, permanent secretary in the energy ministry, as saying: “We signed an MoU but it is being cancelled,” “There is an embargo on Iranian oil. We don’t want to get involved in the intricacies of international inter-governmental issues.”

When the EU announced months ago that an embargo on Iranian oil would come into effect on 1 July, Tehran confidently predicted that it would have no problem sourcing other markets for its resources.

The measures against the country appear to be having an effect, however, with South Korea – erstwhile a stable customer of Iran –turning its back on Iranian crude.

Production has reportedly been significantly scaled back in the Mahmoud Ahmadinejad-led state with much Iranian crude already sitting in floating storage and space drying up.

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