Iran vows to confront "malicious" embargo

DUBAI Sun Jul 1, 2012 8:20am EDT

Iran's Oil Minister Rostam Qasemi (C) talks to journalists before a meeting of OPEC oil ministers at OPEC's headquarters in Vienna, June 14, 2012. REUTERS/Heinz-Peter Bader

Iran's Oil Minister Rostam Qasemi (C) talks to journalists before a meeting of OPEC oil ministers at OPEC's headquarters in Vienna, June 14, 2012.

Credit: Reuters/Heinz-Peter Bader

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DUBAI (Reuters) - Iran pledged to counter the impact of a European Union oil embargo which took full effect on Sunday, saying it had built up $150 billion in foreign reserves to protect itself.

The EU ban on crude imports is part of a push by Western countries aimed at choking Iran's export earnings and forcing it to curb a nuclear programme they fear includes weapons development. Tehran says it has no such plan.

"We are implementing programmes to counter sanctions and we will confront these malicious policies," Mehr news agency quoted central bank governor Mahmoud Bahmani as saying.

He said the effects of the sanctions were tough but that Iran had built up $150 billion in foreign reserves.

The European Union banned new contracts for imports of Iranian crude in January, but allowed existing ones to continue until July 1. EU firms are also barred from transporting Iranian crude or insuring shipments under the sanctions.

"They signal our clear determination to intensify the peaceful diplomatic pressure," British Foreign Secretary William Hague said in a statement.

So far, sanctions have not forced Iran into concessions on its nuclear programme - in fact it demands that they stop before it will take steps to curb uranium enrichment - and France and Britain have signaled more measures could come.

The United States has also imposed a new round of sanctions that could punish foreign countries dealing in Iranian oil, although it gave exemptions to 20 major oil buyers that are cutting purchases.

"All possible options have been planned in government to counter sanctions," Iranian Oil Minister Rostam Qasemi said in comments on the ministry's website.

Qasemi said oil importers would be the big losers if a blockade leads to price rises.

IMPACT

But there are signs of the embargo having an impact on Iran's economy.

Its crude oil exports - which according to EU estimates represent half the government's income - have fallen by 40 percent this year. Iran used to export a fifth of its crude to EU countries.

The Iranian rial has fallen and inflation is running at over 20 percent. Tens of thousands of Iranians have lost their jobs and trade between Iran and Europe has halved in a year, according to Eurostat data from March.

In three rounds of negotiations, Western powers have demanded Tehran halt its high-grade uranium enrichment activities, ship all high-grade uranium out of the country and close down a key enrichment facility.

But the talks have lost steam. At a meeting among political leaders in Moscow last month, there was not enough common ground for negotiators to agree yet whether to meet again.

Experts from Iran and six world powers - the United States, Russia, China, Britain, France and Germany - are set to meet in Istanbul this week, but purely for technical discussions.

Iran says its nuclear programme has only peaceful aims, but Western countries and Israel fear Iran is developing nuclear weapons. Israel, believed to be the only country in the Middle East with nuclear weapons, has threatened to attack Iran.

(Additional reporting by Avril Ormsby, editing by Matthew Tostevin)

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Comments (7)
Dhirajkunar wrote:
The last time a country was so severely oil embargoed was Japan in 1940. This was a component that lead to the second world war. Are we fully prepared this time to prevent another world war ?

Jul 01, 2012 7:54am EDT  --  Report as abuse
‘The Iranian rial has fallen and inflation is running at over 20 percent. Tens of thousands of Iranians have lost their jobs and trade between Iran and Europe has halved in a year, according to Eurostat data from March.’

“They (the sanctions) signal our clear determination to intensify the peaceful diplomatic pressure,” British Foreign Secretary William Hague said in a statement.

These twisted creatures have absolutely no shame… they will lie straight to your face!

And the worse kind of lie, the kind of lie that allows misery and suffering to continue.

How did we end up with such tretcherous politicians?

This is basically the definition of terrorism, ‘to target a civillian population for political purposes’.

We all know that sanctions are designed to hurt the leaders through hurting the people, this is a deliberate attack on Iranian people and the weakest will suffer the most, because the west has ‘fears’ (based on nothing) that Iran is trying to obtain a DEFENSIVE nuclear weapon.

Jul 01, 2012 10:27am EDT  --  Report as abuse
xcanada2 wrote:
“Malicious” is the exact right word to describe this Western embargo.

Why is it that the so-called crazy mullahs always sound so sane, and right on? Maybe it is something to do with their 4000 years of history versus our 200-odd years of barbarism.

Jul 01, 2012 10:28am EDT  --  Report as abuse
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