European refiners have started to sever links with Iran, stopping spot purchases of crude ahead of a European Union meeting later this month that could impose a full oil embargo on Tehran.
Industry executives and oil traders said that some refiners had either stopped or reduced new purchases of Iranian oil, although they continue to receive monthly oil supplies under earlier long-term agreements, or term contracts, that they cannot break without incurring penalties.
“We continue to buy under term contracts but don’t deal with them any longer on spot transactions,” an official at a southern European refiner said. Other refining officials and several oil traders confirmed a reduction in spot deals.
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