Traders work on deals to replace Iranian oil

Major traders are in talks with Greece to supply crude oil and help the country cut reliance on Iranian oil ahead of a European ban, in a sign that they are happier about Greece?s creditworthiness following a second debt bailout.

Greece turned to Iran as a supplier of last resort last year despite pressure from Washington and Brussels to end trade as part of a campaign against Tehran?s nuclear program that the West says is for arms and Iran says is for energy.

Greece relied on Iran for more than half of its oil imports during some months last year after traders and oil majors pulled the plug on supplies and banks refused to provide financing for fear that Athens would default on its debt.

But the outlook has changed after the Greek government clinched a landmark second bailout program on Tuesday for new financing of 130 billion euros.

Pressure is rising to cut imports of Iranian oil ahead of July, when a EU embargo on Iranian supplies comes into force.

Traders told Reuters that Swiss-based Totsa, the trading arm of French oil major Total, and trading house Mercuria were in separate negotiations with Greek refiner Hellenic Petroleum to help it replace Iranian crude.

Glencore, a leading Swiss-based commodities trader and one of the few that conducted business with Greece during the debt crisis, may also boost supplies, trading sources said.

Hellenic would pay back the traders with refined products, which could then be sold in Greece or abroad. Hellenic, Total, Glencore and Mercuria declined to comment.

Two industry source said talks were at advanced stages.

A third industry source said negotiations were at an early stage.

?If something were to happen, it would be unlikely before summer,? one source said.