Iran 'not concerned' about imminent EU oil ban

5th January 2012, Comments 0 comments

Iran said on Thursday it was "not concerned" about an imminent EU ban on its oil, saying it would endure the extra sanctions even though they amounted to "an economic war."

"Iran has always been ready to counter such hostile actions and we are not concerned at all about the sanctions," Foreign Minister Ali Akbar Salehi said in a news conference with visiting Turkish Foreign Minister Ahmet Davutoglu.

"We have taken provisional measures. We have weathered the storm for the past 32 years and we will be able to survive this as well," Salehi said.

"These sanctions are an economic war against us," Economy Minister Shamseddin Hosseini said, according to the official IRNA news agency.

The West is squeezing Iran over its nuclear programme, which the United States and allied nations fear is being used to develop an atomic bomb.

Iran insists the programme is exclusively for peaceful, civilian use and has warned it could resort to drastic measures if it is directly threatened.

In Washington, British Defence Secretary Phillip Hammond said his "working assumption is that they are flat out" in their efforts to develop nuclear weapons.

"I think they are going as fast as they can," he told a think tank, while arguing against a preemptive strike and for sanctions.

"We would not favour a preemptive strike. We have been very clear that we need to maintain the pressure but we also need to engage. And any question of a preemptive strike is abandoning the engagement."

Hammond said both Britain and the United States would make sure their response to any provocation was "very measured, that there isn't an accidental escalation.

"What we cannot answer for is whether there is a plan on the other side to escalate."

The assumption is that "Iran is set on a course that it will only be deterred from if the price for achieving the goal that they set out becomes too high.

"That is what we are in the process of doing by stepping up the pressure on oil revenues, on the operation of the central bank, on the economy generally," he said.

Diplomats in Brussels said on Wednesday that the European Union had reached an "agreement in principle" to ban Iranian oil imports and was discussing the timing of the action.

The ban would add to other sanctions already imposed by the West, including a US measure enacted last weekend that targets Iran's central bank, which processes most of the Islamic republic's oil sales.

The European Union is the second-biggest destination for Iranian oil after China, accounting for around 15 percent, or some 450,000 barrels, of the 2.6 million barrels exported each day.

Iran relies on oil sales for 80 percent of its foreign revenues.

Iran has threatened to close the strategic Strait of Hormuz in the Gulf -- through which 20 percent of the world's sea-transported oil flows -- to all Middle East oil tankers if its petroleum sales are blocked.

It has also warned the "full force" of its navy will be unleashed if the United States tries to redeploy an aircraft carrier to its 5th Fleet base in Bahrain, in the Gulf.

The developments were underpinning a rise in oil prices, although they eased slightly on Thursday due to weaker-than-expected energy demand in the United States.

Despite the warnings and studied insouciance over sanctions, Tehran has also been holding out the possibility of returning to talks on its nuclear programme that have been stalled for a year.

EU foreign policy chief Catherine Ashton, who represents the six world powers involved in negotiations with Iran -- Britain, China, France, Germany, Russia and the United States -- sent a letter in October offering to restart the talks.

Although her office said it was still waiting for a formal response, Salehi said Iran's top nuclear negotiator, Saeed Jalili, "has said in the past couple of months that Iran is ready to resume talks."

He said he was waiting for Ashton to propose a date and venue.

"Personally I think that Turkey is the best place for the talks to take place. But it should be at a place of mutual agreement," Salehi said.

Davutoglu told the Tehran news conference he had conveyed Ashton's request for a formal reply, and said: "We want to see both sides go back to the negotiating table."

The United States has hailed the EU move towards banning Iranian oil and said it wanted other countries around the world to follow suit.

Iran's economy is already facing turmoil, with its currency, the rial, showing extreme volatility.

After plummeting to a record low against the dollar on Monday, in the wake of the new US sanctions, Iran's central bank stepped in to shore up the rial by imposing a capped exchange rate.

After many exchange bureaux refused to sell dollars at that level, authorities seemed to drop that artificial rate. On Thursday the rial was trading at 16,000 to the dollar -- off its low but still very weak.

© 2012 AFP

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