Since the start of the year, mounting concern over Iran's nuclear ambitions has translated into a serious economic offensive on the part of the European Union. Back in January, the European Commission voted on a series of punitive economic measures against Iran, chief among them a pledge by member states to cease imports of oil from the Islamic Republic by mid-summer.
The logic behind the move is clear. The 27 countries of the EU cumulatively account for roughly a fifth of Iran's total oil exports, and even a partial constriction of their consumption would have a marked impact on Iran's already rickety energy economy. If Europe's ban on Iranian oil ends up being comprehensive, the result could be deeply consequential for the regime in Tehran, which counts on foreign oil sales for more than half of its national budget.
Yet less than three months later, the effort is in danger of being undermined from within by the unlikeliest of culprits: a Greece in economic free fall. That is the contention of a new intelligence report by Securing America's Future Energy, or SAFE, a Washington, D.C.-based energy policy group, which argues that the deepening fiscal woes of the Papoulias government in Athens have forced it to increase its reliance on Iran as a source of energy, with potentially disastrous consequences.
"Greece's sovereign debt crisis has led most oil suppliers to decide that they cannot take the risk of trading with Greece," the SAFE report says. As a result, Greece has been forced both to draw down its existing stocks of oil and to "massively increase its reliance on Iran. That, in turn, "makes Greece the potential weakest link in the EU's plans to embargo Iranian oil imports."
The numbers tell the damning story. According to official European Commission statistics, Greece's imports of oil from Iran have spiked noticeably over the past two years, reaching nearly 160,000 barrels per day last fall. Iran's share of Greece's total crude imports has also surged, more than doubling (from 26 percent to 53 percent) last year alone. This has made Iran far and away Greece's top oil supplier; Tehran now provides Athens with more oil annually than Russia, Saudi Arabia, Kazakhstan, and Iraq combined.
In other words, even as the majority of European countries begin to seriously curtail their ties with Tehran, Greece has rapidly headed in the opposite direction. "Greece now risks becoming the West's Achilles heel in its conflict with Iran," the SAFE study posits, with "rising dependence on Iranian imports [that] makes it increasingly challenging for Greece to achieve the European Union's target of eliminating imports from Iran by the end of June." Iran, for its part, increasingly can leverage Greece's vulnerability to better resist and weather Western sanctions over its nuclear effort.
As the SAFE study points out, at least two other Eurozone nations - Spain and Italy - are also dependent to a significant degree on Iranian oil. In fact, both countries actually import more oil from Iran in absolute terms than does Greece: 204,000 and 158,000 barrels daily, respectively. But both Spain and Italy's oil imports are a good deal more diversified. Greece's, by contrast, are not - making Athens the weakest link in Europe's push to wean itself off Iranian oil.
The SAFE report concludes with a prudent recommendation: that the United States help Greece secure alternate oil suppliers, and work with other European nations to provide economic guarantees for Greece's energy purchases. Doing so, the study contends, would give the Greek government some badly needed breathing room to diversify its energy suppliers and wean itself off its dependence on Iran.
All this makes sound strategic sense, for when it comes to the European oil ban, what Greece does matters a great deal. Tiny Greece today represents one of Iran's biggest clients in the Eurozone, consuming roughly a quarter of Iran's total oil exports to the Continent of approximately 700,000 barrels daily. Expanding Greece's energy choices through alternate energy providers and greater security for its oil purchases would therefore be a boon to its floundering economy - and a significant shot in the arm for the fragile consensus in favor of economic pressure on Iran that now predominates in Europe.
Having spent so much time and energy building that understanding, Washington and its allies should now have a vested interest in making sure that Greece's debt woes don't demolish it.