South Africa hopes to have a plan by the end of May for replacing Iranian crude that currently makes up a quarter of its crude imports, the Energy Minister Dipuo Peters said on Tuesday.
The US 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, making up about 29% of imports by Africa’s biggest economy, according to the US Energy Information Administration.
US energy officials visited South Africa in January but did not make any formal request to halt or reduce Iranian crude imports, officials say.
“I would be lying if I said that the US is putting pressure on us to cut Iran imports … but we are considering different avenues now,” Peters said on the sidelines of the International Energy Forum in Kuwait.
Weaning off Iran’s oil
“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 Iranian 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. — Reuters