Iran: Price of crude would double if oil exports blocked

US, EU wary of finalizing sanctions against Iranian oil trade amid fears of possible impact on a fragile global economy; "The consequences should be fully considered before taking any action," Iranian official warns.

By REUTERS
December 4, 2011 12:32
2 minute read.
Policeman guards Iranian oil tanker

Policeman guards Iranian oil tanker 311. (photo credit: Reuters)

 
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Iran's Foreign Ministry believes that if the West seriously considered blocking Tehran's ability to export oil, the global price of crude would more than double, Foreign Ministry spokesman Ramin Mehmanparast was quoted as saying on Sunday.

"As soon as such an issue is raised seriously the oil price would soar to above $250 a barrel," he told the reformist daily Sharq.

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Talk in the West of tightening sanctions on Iran over its nuclear program has increased since the United Nations nuclear watchdog issued a report in November containing what it said was evidence that Tehran had worked on designing an atom bomb.

Iran says its nuclear program is entirely peaceful.

The US Senate voted on Thursday to penalize foreign financial institutions that do business with Iran's central bank, the main conduit for its oil revenues, and the European Union is considering a ban on oil imports from the Islamic Republic.

But so far neither Washington not Brussels has finalized its move against the oil trade or the central bank amid fears of the possible impact on a fragile global economy of restricting oil flows from the world's fifth biggest exporter.

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Mehmanparast said he doubted they would take that step.

"Imposing sanctions on oil and gas is among the sanctions that, if one wants to do that, the consequences should be fully considered before taking any action," he said.

"I do not think the situation in the world and especially in the West today is prepared enough to raise such discussions."

The storming of Britain's embassy in Tehran on Tuesday after London announced unilateral sanctions on Iran's central bank raised tensions and pushed up crude prices.

ICE Brent January crude rose 95 cents on Friday to settle at $109.94 a barrel.

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