Iran says sanctions to fail, repeats Hormuz threat

Last Updated: Tuesday, January 24, 2012 - 23:19

Tehran: Iranian politicians said on Tuesday they expected the European Union to backtrack on its oil embargo and repeated a threat to close the vital Strait of Hormuz shipping lane if the West succeeds in preventing Tehran from exporting crude.

"The West`s ineffective sanctions against the Islamic state are not a threat to us. They are opportunities and have already brought lots of benefits to the country," Intelligence Minister Heydar Moslehi told the official IRNA news agency.

Speaking a day after the EU slapped a ban on Iranian oil - to take full effect within six months - in a move to press Tehran into curbing its contested nuclear program and engage in negotiations with six world powers, the tone in the Islamic Republic was defiant, even skeptical.

"The global economic situation is not one in which a country can be destroyed by imposing sanctions," Moslehi said, repeating Iran`s stance that with the EU in economic and monetary crisis, it needs Iran`s oil more than Iran needs its business.

A spokesman for the oil ministry said Iran had had plenty of time to prepare for the sanctions and would find alternative customers for the 18 percent of its exports that up to now have gone to the 27-nation European bloc.

"The first phase of this (sanctions action) is propaganda, only then it will enter the implementation phase. That is why they put in this six months period, to study the market," Alireza Nikzad Rahbar said, predicting the embargo could be rescinded before it takes force completely.

"This market will harm them because oil is getting more expensive and when oil gets more expensive it will harm the people of Europe," state TV quoted him as saying. "We hope that in these six months they will choose the right path."

The embargo will not kick in completely until July 1 because the bloc`s foreign ministers who agreed the ban at a meeting in Brussels were anxious not to penalize the ailing economies of Greece, Italy and others to whom Iran is a major oil supplier.

The strategy will be reviewed in May to see if it should proceed.

Iran, which denies international suspicions that it is trying to design atomic bombs behind the facade of a declared civilian atomic energy program, has scoffed at efforts to bar its oil exports as Asia lines up to buy what Europe rejects.

"Reckless"

Iran`s foreign ministry summoned the Danish ambassador on Tuesday to complain about the EU`s "illogical decision," accusing Europe of doing the bidding of the United States.

"Some elements in the European Union, following America`s policies, are seeking to create tension in relations with the Islamic Republic of Iran," Deputy Foreign Minister Ali Ashghar Khaji told Ambassador Anders Christian Hougaard.

"Europe should be responsible for the consequences of these reckless decisions," he said, according to IRNA.

Emad Hosseini, spokesman for parliament`s energy committee, said that if Iran encountered any problem selling its oil, it would store it.

"If we don`t export our oil to Europe, our oil will be saved and storage of oil will not harm us but we will have rich storage of oil," he told the semi-official Fars news agency, adding Iran retained its threat to shut the Gulf to shipping.

"Closing the Strait of Hormuz is one of the country`s strategies against the West`s threats, especially an oil embargo," he said.

The United States, which sailed an aircraft carrier through the strait into the Gulf accompanied by British and French warships on Sunday, has said it would not tolerate the closure of the world`s most important oil shipping gateway.

Fitch Ratings issued an assessment of the embargo`s market impact saying it would likely cause an oil price increase.

"However, prices may not necessarily increase markedly from current levels as some of the risks related to the EU ban on Iranian oil appear factored in already," it said.

The embargo decision had no discernible impact on oil prices as it was a move that had been flagged well in advance and the threat to close Hormuz seemed remote. Brent crude down slightly at $110 per barrel on Tuesday.

US President Barack Obama said on Monday that the EU sanctions underlined the strength of the international community`s commitment to "addressing the serious threat" presented by Iran`s nuclear program.

"The United States will continue to impose new sanctions to increase the pressure on Iran," he said in a statement.

Washington applied its own sanctions to Iran`s oil trade and central bank on December 31 and on Monday extended them to the third largest Iranian bank, state-owned Bank Tejarat, and a Belarus-based affiliate for allegedly helping Tehran`s nuclear advance.

The EU sanctions were also welcomed by Israel, which has warned it might attack Iran if sanctions do not deflect Tehran from a course that some analysts say could potentially give Iran the means to build a nuclear bomb next year.

Bureau Report



First Published: Tuesday, January 24, 2012 - 23:19

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