Ending US Waivers on Iran Has Little Impact on Italy's Energy Mix

The United States' decision to end waivers that allowed a handful of countries to buy oil from Iran is more likely to have geopolitical implications than to affect Italy's energy supply, analysts said.
The White House said on April 22 that special waivers given to Italy and seven other countries to continue to import oil from Iran without endangering their trade status with the United States would not be renewed after they expire this month, Xinhuanet reported.
White House press secretary, Sarah Sanders, said that the decision not to renew the waivers was "intended to bring Iran's oil exports to zero".
According to information from the United States Department of State, Iran had earned around $50 billion per year from oil sales before sanctions were put in place.
The energy impact on Italy will be limited, however, because Italy never used its waiver once the sanctions were put in place.
"Italy did not want to take a risk, knowing the waivers would likely be removed at some point," Andrea Dessi, a researcher focusing on Middle Eastern issues with the Istituto Affari Internazionali , told Xinhua.
"Italy produces very little of its own energy and so it has to be careful what countries it buys from in order to maintain a reliable stream of energy."
Dessi said Italy imports oil from around two dozen countries, and that if the ending of the Iran waivers does not push worldwide petroleum prices higher the impact on Italy would be small.
But according to Alessandro Lanza, an economist at Rome's LUISS University, former chief economist with Italian energy giant Eni and principal administrator at the International Energy Agency, there are larger geopolitical issues at stake.
"I think a question here is the extent to which a major power like the United States should be able to tell another country, a fellow member of the Group of Seven like Italy, which countries it can and cannot buy energy from," Lanza said in an interview.
Dessi said that Iranian officials were likely disappointed that Italy did not use its waiver when it could, and that the country didn't stand up for Iran in the face of sanctions from the United States.
"Italy is well positioned in Iran and well thought of in the country," Dessi said. "Iranian officials have made official visits to Rome and the countries have made statements of support. But when it came to the sanctions, Italy did not want to stick its neck out."
Lanza said one potential benefit from the developments could be the creation of new incentives for the domestic production of renewable energy like solar or wind power.
"Italy has the target of producing 20% or more of its energy from renewable sources by the end of next year," Lanza said. "Surpassing that should be a priority."