Iran calls for oil embargo review

Sat, Feb 4, 2012, 00:00

Iran's oil minister said the Islamic state would not retreat from its nuclear programme even if its crude oil exports grind to a halt, the official IRNA news agency reported today.

But he also called on the European Union, which accounted for a quarter of Iranian crude oil sales in the third quarter of 2011, to review its decision last week to bank Iranian oil imports from July 1st.

“We will not abandon our just nuclear course, even if we cannot sell one drop of oil," Rostam Qasemi told reporters.

Tension with the west rose last month when Washington and the European Union imposed the toughest sanctions yet on Iran in a bid to force it to provide more information on its nuclear programme. The measures are aimed at shutting off the second-biggest OPEC oil exporters' sales of crude.

Mr Qasemi said Iran would cut oil exports to some nations in Europe - he did not specify which - in retaliation for the 27-state EU's decision to stop importing Iranian crude.

"Our oil exports will certainly be cut to some European countries ... We will decide about other European countries later," IRNA reported.

He urged Europe to reconsider its ban, and said the oil market is in balance now but would be thrown into turmoil without Iranian crude supplies.

"Unfortunately the EU has succumbed to America's pressure. I hope they would review their decision on sanctioning Iran's oil exports," Mr Qasemi said.

"The international crude market will experience turmoil in the absence of Iranian oil with unforeseen consequences on oil prices," he added.

However, analysts say the global oil market would not be greatly affected if Iran were to turn off the oil tap to Europe.

The EU's ban on Iranian oil came after U.S. President Barack Obama signed new sanctions into law on New Year's Eve that would block any institution dealing with Iran's central bank from the US financial system.

If fully implemented, these measures will make it impossible for countries to buy Iranian oil.

Brent crude prices rose to near three-month peaks yesterday, partly thanks to oil investors covering short positions ahead of the weekend due to the standoff between the West and Tehran over its nuclear programme.

The United States wants buyers in Asia, Iran's biggest oil market, to cut imports to put further pressure on Tehran, which is scrambling to find new buyers and persuade existing customers to keep doing business with it.

But Iran remains a key supplier for many countries, and some of its major customers are seeking waivers from Washington from the sanctions while they look for alternative sources of oil.

Saudi Arabia, Iran's regional rival, has promised to make up any shortfall in supply.

Iranian officials have said sanctions have had no impact on it, while the country's supreme leader Ayatollah Ali Khamenei threatened on Friday to retaliate against the West for sanctions.

Mr Qasemi also played down the importance of Europe as a market for its exports.

"We have no problem to find other crude buyers to replace the European countries," he was quoted as saying.

The United States and its allies say Iran is trying to develop weapons under cover of a civilian nuclear programme. But energy-rich Iran denies this, saying it needs nuclear technology to generate electricity.

Reuters