Stacey Vanek Smith: The European Union is considering a ban on Iranian oil purchases. Officials are meeting in Brussels today to discuss an oil embargo against Iran -- that in reaction to the country's nuclear program.
Here to talk with us about this is our own Stephen Beard. He joins us live from London. Good morning, Stephen.
Stephen Beard: Hello, Stacey.
Smith: Stephen, Europe has been openly critical of Iran -- so why is an embargo proving to be such a tough decision?
Beard: This is pretty difficult for the Europeans. They buy almost 20 percent of Iran's oil -- 700,000 barrels a day. The U.S., don't forget, doesn't buy any. And the European countries that are most dependent on this oil are among the weakest economically: Greece, Italy, Spain. And they've been arguing against these extra sanctions. However, it does now look as if Europe will bite the bullet and make the decision at the end of the month to ban oil imports from Iran.
Smith: If Europe does end up imposing an embargo, what impact would that have on oil prices and the global economy?
Beard: Well, these possible sanctions are already having an effect and that's the problem. Talk of these sanctions and Iran's threat to retaliate by closing the Strait of Hormuz has already pushed up the price of oil by $6 or $7 a barrel.
And that, says Julian Lee of the Center for Global Energy Studies, benefits Iran.
Julian Lee: If it's exporting about 2 million barrels a day, then we're looking at an extra $40 million a day that Iran's earning, really just through talk of sanctions.
What happens if these EU sanctions do materialize depends on whether Europe will easily find alternative supplies. Saudi Arabia would most likely step in and increase production. And that could stop global oil prices from spiraling out of control, and hitting gas prices in the U.S. and Europe.
Smith: Marketplace's Stephen Beard in London, thank you Stephen.
Beard: OK Stacey.