A few days ago the Iranian Foreign Ministry called the Ambassador of Greece in Tehran, along with five other counterparts of the EU countries, to notify him that Tehran intends to change its oil supply conditions to Athens. Two hours later the Iranian Oil Ministry announced that it does not intend to cut off oil supplies to both Greece and the other five EU countries. In the meantime the price of crude had risen by two dollars. But after a few days Tehran made a surprising, but of minor economic importance move, by officially announcing the discontinuation of oil sales to Britain and France. This move left open the possibility of interruption or reduction for Iranian oil in Greece.
In his previous analysis in the ELIAMEP blog in December 2012 the author highlighted the political significance of Tehran’s decision to supply oil on credit to Athens at a time of international credit unreliability of Athens. He also emphasized that, beyond the temporary beneficial stance of Iran toward Greece, the continued dependence of the energy from Athens to Tehran will have political repercussion within the EU regarding Tehran’s effort to increase its influence in the EU decision-making over its nuclear program. To avoid such a scenario an alternative source had to be found, i.e. to supply Greece with oil with the help of partners and allies. Indeed, in January there was ferment in the EU and Washington in this direction in order to secure the consent of Greece for the general EU oil ban against Iran. The EU assurances led Athens to lift its reservations and to sign the ban from July 1, 2012 onwards. That decision prompted various centres of power in Iran suggest a preemptive oil sales ban by Iran to the EU. It was in this context that the Greek Ambassador in Tehran was summoned at the Foreign Ministry in Tehran.
Undoubtedly the current geopolitical situation is expected to test-relations between Athens and Tehran. In the last three decades Greece, of all EU countries, has adopted the most positive foreign policy toward the Islamic Republic of Iran. In the same context of reciprocity Iranians treat Greece as an important gateway to the EU in a period of intense geopolitical competition with EU countries like Britain and France. However, increasing tensions in relations between Iran and Israel, the U.S. and EU have already an impact on Greek-Iranian relations.
At this stage the financially weak Greece has limited room for maneuver both to respond to the callings of lenders countries that are pushing for larger economic blockade of Iran and to maintain its level of cooperation with Tehran. Due to vital Greek economic interests in Iran, Athens is always cautious with regard to imposing new sanctions against Tehran. But the broader economic interests of Athens at this time lie in the West. In this context, Athens is expected to exercise the greatest possible maneuver to Tehran, but these maneuvers in the current economic climate are at its lowest in terms of options.
Although Iran knows the financial vulnerability of Athens and in this context understands the Greek policy within the EU, it does not mean that it will accept or tolerate the Greek stance. The removal of Greek objections to the sanctions from July 1 onwards is a cause for the change of course in Tehran towards Athens. Amongst other reasons Tehran has had offered oil on credit because Athens had the right of veto within the EU. Yet when Greece has ceased to exercise the above right and voted, albeit reluctantly, in favor of sanctions against Tehran, Iran retains the right to alter its policy towards Athens. So is Tehran ready to take measures against Athens, alter the overall positive bilateral ties with Greece and face the repercussions of such a move?
Iran needs access to the EU and Greece is an important channel to Tehran. The Iranian decision to ban the sale of oil to Britain and France clearly states that Iran intends to move against the geopolitically strong European countries. This may happen indirectly by hurting the energy reserves of the economically weak Greece. Although the last action is on the agenda of Tehran, it is estimated that the Iranians will not engage in a show of force against a friendly country whose geopolitical policy is shaped by temporary unbearable economic pressures. Nevertheless, if Tehran takes measures against Athens, it is estimated that these will deal with the quantity reduction of oil sold rather than the abrupt cessation of total sales. As a whole it is estimated that neither Athens nor Tehran are ready to reduce the level of their bilateral relations, which are also a useful channel of communication both to the Middle East and the West.