Defiant Iran says Asia oil customers stay loyal

Mon Jan 16, 2012 7:13am EST

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TEHRAN, Jan 16 (Reuters) - Iran said on Monday it was business as usual with Asia's leading oil buying countries, despite growing pressure on its customers in the East from a tightening mesh of sanctions hampering its crude exports.

Asian leaders are touring the Middle East to secure supplies, as tension over Iran's nuclear work builds, while European buyers may rely more heavily on Arab oil producers should an EU ban come into effect.

Mohsen Qamsari, head of international affairs at the National Iranian Oil Co., told Sharq daily that Iran had renewed some contracts with foreign refiners and would do so with others as deadlines approached.

"The one-year contract with Korean companies to buy our oil has been renewed since the last two months," Qamsari said.

South Korea will buy around 10 percent of its crude from Iran in 2012, up slightly from last year, as it seeks a waiver from toughened U.S. sanctions, and its refiners were also looking for alternatives, traders and officials told Reuters early in January.

Iran has warned Gulf Arab neighbours they would suffer consequences if they raised oil output to replace Iranian crude facing an international ban.

When asked whether Japan had reduced its oil imports from Iran, Qamsari said: "It is not true. The time for renewal of contracts with the Japanese is around March and they are buying 240,000 barrels from us per day."

Qamsari also denied any problems doing business with India.

India has been struggling to pay Iran after the new U.S. sanctions which penalise any financial institutions dealing with Iran's central bank. It currently pays through Turkey's Halkbank, a mechanism that may be cut off by the latest round of sanctions.

Qamsari declined to comment about using the Indian rupee for oil sales, saying the matter was for Iran's central bank to decide. He said most Chinese oil deals to Iran were paid for in euros.

The EU has agreed in principle to ban imports of Iranian oil, while the United States has pressured Asian buyers to reduce imports to starve Tehran of revenue for its disputed nuclear programme.

On the European Union's planned embargo on Iranian oil imports, Qamsari said: "In my opinion it cannot be implemented fast. It would take around one year at least."

EU countries have proposed grace periods on existing contracts of one to 12 months to allow companies to find alternative suppliers before implementing an embargo.

Parliament speaker Ali Larijani told state-run Arabic language al Alam TV that Tehran was ready to deal with further sanctions.

"We are prepared for oil sanctions and have different scenarios, but we would not announce them in order to avoid alerting our enemies," he said.

Iran has warned it could shut the Strait of Hormuz, a shipping chokepoint, if sanctions are imposed - a threat that temporarily pushed up global oil prices.

Referring to a letter Washington sent to Tehran about the strait, the senior military adviser to Supreme Leader Ayatollah Ali Khamenei reiterated Tehran's defiant stance.

"Iran would use any tools to defend its national interests, if it was exposed to any dangers," Major-General Yahya Rahim-Safavi said, according to the semi-official Mehr news agency. (Reporting by Ramin Mostafavi, editing by William Hardy)

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