Iran to 'block' Gulf oil if sanctions proceed
Vice president threatens to cut off shipments at Strait of Hormuz if West sanctions Iran's
vital oil exports.
Middle East: No oil will be allowed to pass through the Strait of Hormuz if the West applies sanctions on Iran's oil
exports, Iranian Vice President Mohammad Reza Rahimi has warned.
The threat was reported on Tuesday by the state news agency IRNA as Iran
conducted its fourth day of naval drills near the Strait of Hormuz, at the entrance to the oil-rich Arabian Gulf.
"If sanctions are adopted
against Iranian oil, not a drop of oil will pass through the Strait of Hormuz," Rahimi was quoted as saying.
"We have no desire for
hostilities or violence ... but the West doesn't want to go back on its plan" to impose sanctions, he said. "The enemies will only drop their plots
when we put them back in their place."
The threat underlined Iran's readiness to target the narrow stretch of water along its Gulf coast if
it is attacked or economically strangled by Western sanctions.
More than one-third of the world's tanker-borne oil passes through the Strait
of Hormuz. The US maintains a navy presence in the Gulf in large part to ensure that passage remains free.
Iranian ships and
aircraft dropped mines in the sea on Tuesday as part of the drill, according to a navy spokesman.
Although Iranian war games occur
periodically, the timing of these is seen as a show of strength as the US and Europe prepare to impose further sanctions on Iran's oil and financial
The last round of sanctions, announced in November, triggered a pro-regime protest in front of the British embassy in Tehran during
which Basij militia members overran the mission and ransacked it.
London closed the embassy as a result and ordered Iran's mission in Britain
shut as well.
Tehran in September rejected Washington's call for a military hotline between the capitals to defuse any "miscalculations"
that could occur between their military forces in the Gulf.
An Iranian lawmaker's comments last week that the navy exercises would block the
Strait of Hormuz briefly sent oil prices soaring before that was denied by the government.
While the foreign ministry said such drastic action
was "not on the agenda", it reiterated Iran's threat of "reactions" if the current tensions with the West spilled over into open
EU ministers said on December 1 that a decision on further sanctions would be taken no later than
their January meeting but left open the idea of an embargo on Iranian oil.
Countries in the 27-member EU receive 450,000 barrels per day of
Iranian oil, about 18 per cent of the Islamic Republic's exports, much of which go to China and India.
China, the biggest buyer of Iranian
crude, has warned against "emotionally charged actions" that might aggravate tension in the nuclear standoff with Iran.
Russia for its part
has warned against "cranking up a spiral of tension", saying this would undermine the chances of Iran co-operating with efforts to ensure it does
not build atom bombs.
About a third of all sea-borne oil was shipped through the Strait of Hormuz in 2009, according to the US Energy
Information Administration, and US warships patrol the area to ensure safe passage.
Most of the crude exported from Saudi Arabia, Iran, the
United Arab Emirates, Kuwait and Iraq - together with nearly all the liquefied natural gas from lead exporter Qatar - must slip through the 6.4km-wide
shipping channel between Oman and Iran.
Some analysts say Iran would think hard about sealing off the Strait since it could suffer just as much
economically as Western crude importers.
Saudi steps in
Industry sources said on Tuesday that top oil exporter Saudi Arabia and other
Gulf OPEC states were ready to replace Iranian oil if further sanctions halt Iranian crude exports to Europe.
Iranian Oil Minister Rostam
Qasemi had said that Saudi Arabia had promised not to replace Iranian crude if sanctions were imposed.
"No promise was made to Iran, its very
unlikely that Saudi Arabia would not fill a demand gap if sanctions are placed," an industry source familiar with the matter told the Reuters news
"If the sanctions take place, the price of oil in Europe would increase and Saudi and other Gulf countries would start selling there
to fill the gap and also benefit from the higher price," said a second industry source.
Brent crude oil futures jumped nearly a dollar to over
$109 a barrel after the Iranian threat, but a Gulf OPEC delegate said the effect could be temporary.