A European Union embargo on imports of Iranian oil will probably be delayed for six months because of the opposition of countries such as Greece, Italy and Spain, two EU officials with knowledge of the talks said.

The embargo, which would need to be accepted by the 27- nation bloc’s foreign ministers on Jan. 23, is also likely to include an exemption for Italy, so crude can be sold to pay off debts to Rome-based Eni SpA , Italy’s largest oil company, according to the officials, who declined to be identified because the talks are private.

A ban on petrochemical products would start sooner, about three months after EU ministers agree to the measure, one official said . Once a decision is made, member states would be barred from concluding new oil contracts with Iran or renewing those that are due to expire, while existing deals will be terminated within six months, according to a second diplomat . Long-term contracts constitute the bulk of Europe’s purchases of Iranian oil.

 Italy, Greece Concern

Phasing in the European embargo would satisfy the concern of nations most dependent on Iranian crude, including Italy, Greece and Spain, an EU official said. Those three nations accounted for 68.5 percent of EU imports from Iran in 2010, according to European Commission data.

The U.K., France and Germany pressed for a three-month delay, Nigel Kushner, a London-based international-trade lawyer specializing in Iran sanctions, said in an interview.

“It’s my understanding that the Greeks were looking for a 12-month delay” and a six-month compromise appears likely, Kushner said. “No doubt the Greeks are saying to rest of EU, ‘If we play ball, what are you giving U.S. in return?”

Greece, facing a debt crisis, is buying oil from the Persian Gulf state on credit.

Nuclear Pressure

Germany, France and the U.K. have been pushing for the embargo to increase pressure on Iran over its nuclear program, and it has the support in principle of all member states, the EU official said . 

  Iran, the second largest producer in the Organization of Petroleum Exporting Countries, pumped 3.58 million barrels of crude a day last month, according to Bloomberg estimates.

 

There are no plans to compensate affected European nations, and the current emphasis is on finding oil from alternative sources at similar prices, the official said.