US: Iran threats show sanctions starting to bite

White House: Threats show weakness, isolation; in latest of a series of military gestures, Tehran threatens US over Gulf.

By REUTERS
January 3, 2012 20:30
3 minute read.
White House Press Secretary Jay Carney

Jay Carney 311. (photo credit: REUTERS)

 
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The White House said on Tuesday Iran's threat to take action if a US aircraft carrier moves into the Gulf showed Tehran was increasingly isolated internationally, faced economic problems from to sanctions and wants to divert attention from its deepening problems.

"It reflects the fact that Iran is in a position of weakness," White House spokesman Jay Carney told reporters.

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Separately Tuesday, Secretary of State Victoria Nuland said "They are feeling increasingly isolated and they are trying to divert the attention of their own public from the difficulties inside Iran, including the economic difficulties as a result of sanctions," Nuland told a news briefing.

Nuland also said the threats were proof that international pressure was "beginning to bite."

Iran threatened on Tuesday to take action if the US Navy moves an aircraft carrier into the Gulf, Tehran's most aggressive statement yet after weeks of saber-rattling as new US and EU financial sanctions take a toll on its economy.

The prospect of sanctions targeting the oil sector in a serious way for the first time has hit Iran's rial currency, which has fallen by 40 percent against the dollar in the past month.

Queues formed at banks and some currency exchange offices shut their doors as Iranians scrambled to buy dollars to protect their savings from the currency's fall.

Army chief Ataollah Salehi said the United States had moved an aircraft carrier out of the Gulf from because of Iran's naval exercises, and Iran would take action if the ship returned.

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It did not name the carrier, but the USS John C Stennis leads a task force in the region, and the US Navy's 5th Fleet website pictured it in the Arabian Sea last week.

"Iran will not repeat its warning ... the enemy's carrier has been moved to the Sea of Oman because of our drill. I recommend and emphasize to the American carrier not to return to the Persian Gulf," army chief Salehi said.

"I advise, recommend and warn them over the return of this carrier to the Persian Gulf because we are not in the habit of warning more than once."

Lieutenant Rebecca Rebarich, spokeswoman for the US 5th Fleet based in Bahrain, said she was not immediately able to respond.

Western sanctions could seriously effect Iran's oil trade

Tehran's threat comes at a time when sanctions are having an unprecedented impact on its economy, and the country faces political uncertainty with an election in March, its first since a 2009 vote that triggered countrywide demonstrations.

The West has imposed the increasingly tight sanctions over Iran's nuclear program, which Tehran says is strictly peaceful but Western countries believe aims to build an atomic bomb.

After years of sanctions that had little impact, the latest measures are the first that could have a serious effect on Iran's oil trade, 60 percent of its economy.

New sanctions signed into law by US President Barack Obama on New Year's Eve would cut off any financial institutions that work with Iran's central bank from the US financial system, blocking the main path for payments for Iranian oil.

The EU is expected to impose new sanctions by the end of this month, possibly including a ban on oil imports.

Even Iran's top trading partner China - which has refused to back new global sanctions against Iran - is demanding discounts to buy Iranian oil as Tehran's options narrow. Beijing has cut its imports of Iranian crude by more than half for January and, paying premiums for crude from Russia and Vietnam to replace it.

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