Iran Sanctions Taking a Toll: Report

Iran is struggling to sell nearly a quarter of its annual oil exports as Western sanctions targeting the country's nuclear program begin to take a toll on OPEC's second-largest exporter after Saudi Arabia.

Two industry executives told the Financial Times (FT) on Monday that Tehran is seeking to sell an extra 500,000 barrels of oil to Chinese and Indian refiners, which is equivalent to the amount sold to European refiners last year.

If Tehran does not find a buyer by mid-March, the country could be forced to store the unsold barrels or reduce output, the FT said. Such measures would result in higher prices.

"Iran is facing severe problems finding a new buyer," one of the executives was quoted as saying, adding that Tehran was not offering discounts for the oil, which is set for delivery from the start of April.

The European Union approved a ban on oil imports from Iran last month but delayed full implementation until July 1 to give indebted nations such as Greece, Spain and Italy adequate time to find alternative supplies.

Iran said Sunday that it would halt limited oil sales to France and Britain in retaliation for the phased EU embargo.

The step is largely seen as symbolic since France purchased only three percent of Iranian oil last year, while the UK is believed to have halted imports already.

In New York trading Friday, benchmark crude oil futures closed at a nine-month high of $103.91 a barrel, largely due to uncertainty over Iran. Brent crude also jumped, hitting an eight-month high at $120.70 a barrel.

Nymex crude futures were up $1.62 at $104.86 in electronic trading Monday, while Brent rose above $121 a barrel.