Alert Sign Dear reader, online ads enable us to deliver the journalism you value. Please support us by taking a moment to turn off Adblock on

Alert Sign Dear reader, please upgrade to the latest version of IE to have a better reading experience


VIENNA: Iran's oil minister on Thursday shrugged off the tightening international squeeze on his country's oil exports, declaring that Tehran was not feeling the pinch and warning that an energy-hungry world could not do without Iranian oil and natural gas.

Rostam Ghazemi spoke to reporters as he and other Opec ministers headed into a meeting marked by a spillover of strategic and political differences between Saudi Arabia and Iran, with the two countries at odds over how much oil the organisation should produce.

Iran would be happy to see output lowered to raise prices, while the Saudis came to the meeting looking to increase production to make crude more affordable. Many of the world's major consuming nations are struggling against a stubborn economic downturn that could be exacerbated by any decision to inflate oil prices by cutting supply.

Differences appeared to be resolved as ministers gathered Thursday, with several suggesting the 12-member Organisation of the Petroleum Exporting Countries would opt to keep the present ceiling of 30 million barrels a day.

That would be a compromise, formally bridging the Saudi and Iranian standpoints.

But Opec members normally ignore the official quota — Opec's daily output is now at close to 33 million barrels — and the Saudis, and others with capacity, were expected to keep overproducing to make up for any shortfall caused by the sanctions on Iranian oil.

Iran, in contrast, is faced with the prospects of having to cut its output of oil, which makes up nearly 80 per cent of its foreign exchange earnings. Sanctions levied by the US over Tehran's refusal to curb its nuclear programme have already cut significantly into exports — from about 2.5 million barrels a day last year to between 1.2 and 1.8 million barrels now, according to estimates by U.S. officials. A European Union embargo on Iranian crude that starts July 1 will tighten the squeeze.

The oil-related sanctions are only part of the regime of UN and other international penalties levied against Iran for its refusal to curb uranium enrichment. Tehran says it is enriching only to create reactor fuel and insists it is not interested in atomic arms. But concern remains strong because enrichment to high levels also can produce the core of nuclear weapons.

Iran has cautioned the Saudis not to use the oil weapon against it, and Ghazemi on Wednesday warned the US and Europe that their tactics will backfire.—AP