Kenya’s deal to import oil from Iran cancelled

Last Updated 14 years ago by Kenya Engineer

Kenya had earlier this week signed a memorandum of understanding with Iran on oil. The country was to be importing 4 million tonnes of Iranian crude oil per year. This was however cancelled following the United States declaration of total trade embargo on the country if it continued with the deal.

The cancellation of the agreement is to avert economic sanctions that the United States could have imposed on Kenya. This could have greatly hurt the multi-billion shilling trade flows between the two countries.

Western powers are implementing sanctions against Iran for its controversial nuclear programme. The sanctions are meant to reduce oil and other revenues used by Iran to further its nuclear program. Most of the other importers of Iranian crude oil have sharply reduced purchases to earn exemptions from the US financial sanctions. The European sanction like the ban on imports of Iranian oil by EA states make it difficult for other countries to trade with Iran.

Under the proposed contract with Iran, Tehran could have given an extended credit facility of 90 days, saving the country millions of shillings currently used to import expensive crude oil through overdraft facilities. Iranian crude oils are also considered to have sulphur content and are hence cheaper.

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