Argentinian president Cristina Kirchner has not only seized 51% of oil giant YPF, she has also sacked the Spanish directors who were posted at the company’s headquarters in Buenos Aires.
The Argentinian government now owns 51% of the oil company for “the good of Argentina”.
On Sunday Spain’s foreign minister called on European leaders to enact concrete sanctions against Argentina to try and push the country into fully compensating Repsol for the loss of 51% of the company, worth around 10 billion euros.
To make matters worse Iran has stopped all exports of crude oil to Spain in anticipation of EU embargoes, despite the fact that Spain is not backing the EU sanctions being discussed.
There are no embargoes in place yet but the EU is likely to bring a ban imports from Iran into place on July 1 as an attempt to force the Iranian government to abandon it’s alleged development of nuclear weapons.
Iran supplies up to 80% of Spain’s oil and this action is very likely to dramatically increase the cost of a litre of petrol across Spain.
“Spain is badly hit because we used to import a lot of Iranian oil,” said a foreign ministry spokesman.
However Iranian president Mahmoud Ahmadinejad has insisted his country can survive for up to three years without selling any of its oil.
Spaniards have already seen a big increase in the cost of fuel over recent years with a litre of unleaded now costing around 1.48 euros. If fuel costs rise much more it will be beyond the reach of many Spaniards who are already struggling with rising unemployment and rising costs.
Incidentally, when I arrived in Spain eight years ago a litre of unleaded was around 0.76 euros, meaning it has almost doubled since 2004.