The European Union, which currently accounts for 20% of Iran’s oil exports, is widely expected to agree on Monday to a ban that would prevent its member-states from importing Iranian oil.

An immediate ban would cause major supply problems for some of Europe’s weakest economies, with Italy and Greece both dependent on Iranian oil. Consequently, the embargo will be phased in over time, allowing existing contracts with Iran to be continued for some months after the ban is imposed, providing importers with valuable time to source new supplies.

The decision, led by Western governments, to gradually remove Iran’s daily production of 2.6 million bbls/d from world markets has helped keep global oil prices at a high. For importers concerned about sourcing new supplies, Saudi Arabia has declared its intent to increase production by 2 million bbls/d.