Iran threatens to halt crude exports if sanctions are extended
26 October 2012
Iran will suspend all oil exports, pushing global crude prices higher, if the US and Europe tighten sanctions further, Iranian Oil Minister Rostam Qasemi warned on October 23. “If you continue to add to the sanctions, we will stop our oil exports to the world,” he said at a news conference in Dubai. “The lack of Iranian oil in the market would drastically add to the price.”
Iranian Oil Minister Rostam Qasemi
Iran’s oil exports have shrunk in the face of US and EU sanctions on its energy and financial industries. The International Energy Agency said that Iranian shipments slumped to 860,000 barrels a day in September from 1.1 million barrels in August. About 40% of Iran’s exports last month were destined for China, according to tanker-tracking data compiled by Bloomberg.
Qasemi declined to say how much crude his nation is exporting now. Iran has a plan for functioning without oil revenue, he said, without elaborating. Qasemi blamed “belligerent” policies for tightening global energy supply, speaking earlier at an international conference, and said restrictions on Iran affect consumers.
Oil sales generated half of Iran’s official revenues, and crude and refined products together accounted for almost 80% of the country’s total exports, according to a US Energy Department’s Energy Information Administration report last November.
The Islamic republic is pumping 4 million barrels a day, most of it for domestic consumption, Qasemi said. His output figure differs from data compiled by Bloomberg showing that Iran produced an average of 2.85 million barrels a day in September.
Industry experts quoted by Bloomberg Businessweek thought it extremely unlikely that Iran would call a unilateral halt in oil sales because of their overwhelming importance to the country’s economy.
Iran faces international sanctions because of its nuclear program, which the US and allied nations say may be aimed at developing weapons technology. The Iranian government says it wants nuclear energy only for non-military use.