MARCH 9 2012 13:25h

Sanctions sink teeth into Iran's oil

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LONDON, March 9 (UPI) -- Shipments of Iranian crude oil are down about 100,000 barrels per day because shippers are wary of violating European sanctions, analysts say.

The European Union approved an embargo on Iranian crude oil in January. The sanctions wouldn't go into force until July but some shippers are already concerned.

"Iran is finding it increasingly difficult to sell crude and their production is sliding," Leo Drollas, a leading economist at the London's Center for Global Energy Studies, told Bloomberg News. "They are suffering, there's no doubt."

Analysts at Barclays Capital in London said shipments of Iranian crude have declined by 100,000 barrels per day. Half of the tankers booked for January didn't finish their journeys.

The European embargo affects 95 percent of the world's tankers, an insurance broker in London told Bloomberg News. Financial sanctions mean shippers aren't covered against risks like oil spills, brokers said.

Iran ranks No. 2 among members of the Organization of Petroleum Exporting Countries. Bloomberg said January production of 3.45 million barrels of oil per day was Iran's lowest level since 2002.