January 25, 2012 / 2:51 PM / 8 years ago

UPDATE 1-Total halts buying from Iran, casts doubt on sanctions

(Adds detail, comment)

DAVOS, Switzerland, Jan 25 (Reuters) - French oil major Total has ceased buying oil from Iran in line with European Union sanctions against the Gulf producer but does not expect it to have much effect either on Iran’s overall sales or the oil market in general.

Chief Executive Christophe de Margerie said on Wednesday he cast doubt on whether the sanctions would have any impact.

“I think (the Iranian) oil will go somewhere else ... Iran may give a discount to make it easier and quicker but nothing will change,” he told Reuters at the Global Economic Forum in Davos.

“We have already stopped (buying from Iran),” he said, adding the company had been buying roughly 80,000 barrels per day (bpd) from the country.

The Islamic Republic, which denies Western suspicions it is trying to build a nuclear bomb, has scoffed at efforts to choke its oil exports, as Asia lines up to buy what Europe scorns.

Some Iranians also renewed threats to stop Arab oil from leaving the Gulf and warned they might strike U.S. targets worldwide if Washington used force to break any Iranian blockade of a strategically vital shipping route.

But de Margerie said the oil market had concluded that the European sanctions would have little real impact.

“Today they (Iran) export 2.2 million bpd with 1.5 million going to Asia. The remaining 0.7 million bpd goes to the OECD. So Iran may give a discount to make it easier and quicker (to re route this oil) and nothing will change. Look at the price of oil,” he said.

“Even if we stop buying Iranian oil for some reason, the Saudis have sufficient capacity to match the gap. I believe in this (Saudi) spare capacity, the market believes. This is why the oil price is flat and this is good news.” (Reporting by Dmitry Zhdannikov; writing by Christopher Johnson; editing by Patrick Graham)

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