Nairobi — Kenya has now cancelled a Memorandum of Understanding it signed with Iran last month for the importation of four million tonnes of Iranian crude per year.
Energy Permanent Secretary Patrick Nyoike told Capital FM News on Wednesday afternoon that it had cancelled the deal, citing recently imposed international sanctions on Iranian oil.
"We had not signed any deal with Iran but an MOU which we had to terminate. We could not pursue that direction due to a UN embargo," said Nyoike.
Kenya had turned to Iran, a country facing crippling economic sanctions from the West over its reported nuclear weapons ambition, to secure long-term fuel supply contracts.
This was the first time Kenya was officially seeking government-to-government fuel supply contracts.
The cancellation was revealed barely hours after the United States warned the Kenyan government of possible sanctions following the decision to buy oil from Iran.
Outgoing US ambassador Scott Gration told journalists on Wednesday that Washington was monitoring the situation and the matter will be handled once the deal is clear.
"We have to see how this develops but certainly there will be repercussions," he warned.
The European Union (EU) on Monday formally approved an embargo on Iranian oil to be enforced on July 1.
The EU Foreign Affairs Council made the decision following a review of the EU's restrictive measures against Iran in Luxembourg. It means that the latest package of EU sanctions against the country will apply as earlier decided, and two exemptions will end, as scheduled, on July 1.
This latest package of sanctions against Iran was adopted in January 2012. It banned imports of Iranian crude oil and petroleum products, but exempted "already concluded contracts" which can still be executed until July 1, 2012.
South Korea said it was discontinuing Iranian oil imports from this month after Western insurers stopped covering Tehran oil shipments.
The US congress is this month expected to expand sanctions against Iran after the European Union on Monday formally approved an embargo.