Business
South Africa shopping for alternatives to Iran oil
Phase 15 and 16 of South Pars gas field development in the Iranian port town of Asaluyeh. PHOTO/Atta Kenare/AFP/Getty Images
South Africa hopes to have a plan by the end of May for replacing Iran crude that currently makes up 25 percent of its crude imports, the country’s energy minister told reporters.
The United States has pressured many of Iran’s biggest oil buyers in Asia to reduce their purchases in a Western push to starve Tehran of funds for its disputed nuclear programme.
Iran is South Africa’s leading crude supplier, according to the U.S. Energy Information Administration.
U.S. energy officials visited South Africa in January but did not make any formal request to halt or reduce Iranian crude imports, South African officials say.
“I would be lying if I said that the United States is putting pressure on us to cut Iran imports, but we are considering different avenues now,” Elizabeth Dipuo Peters told reporters on the sidelines of the International Energy Forum in Kuwait.
“We have given ourselves till the end of May to come up with alternatives, and we are engaging in talks with everyone, including Iran,” she said in an interview, adding that she had recently visited Tehran to discuss the issue.
Oil traders say Iran may have to offer steep discounts to keep its customers buying as pressure from Washington and Europe on Iran builds.
Iran has not offered South Africa cheaper oil to persuade it to buy more, Peters said, but South Africa will need to find cost-effective alternatives to wean itself off Iran oil.
“Price is certainly a concern for us and looking at the other options we have to consider the price,” she said.
Many refineries in the country, including the privately-held Engen refinery, are designed to treat Iranian crude and adjusting them to handle others would be costly.
“We are worried about Engen that’s why we are engaging in talks with the owners and everybody else,” she said, adding that Venezuela could offer a viable alternative to Iranian crude.