Iran says won't rule out using oil as a weapon

TEHRAN (Reuters) - Iran will not rule out using oil as a weapon if the United States resorts to military action against the Islamic Republic over its nuclear program, an Iranian oil official said in remarks published on Tuesday.

"When the Americans say that military action in regard to the nuclear issue has not been put aside, Iran can also say that it will not put aside oil as a tool," Iran's OPEC governor, Hossein Kazempour Ardebili, told Iran's Sharq newspaper.

Washington says it wants a diplomatic end to a row over Iran's nuclear ambitions but has not ruled out force if that route fails. Iranian officials say they do not want to use oil as a weapon but have also said they might do so if pushed.

The United States accuses Iran of seeking to build atomic bombs, a charge Tehran denies.

"We will not start using this tool (of oil) but if others use their tools that they have not put aside to put pressure on negotiations, it is natural that the two sides would discuss all their tools," Kazempour Ardebili said.

Asked what would be the impact if Iran stopped its oil exports, Kazempour Ardebili said: "Definitely the market will be faced with a new shock and oil prices will increase strongly."

He added that prices would climb above $100 a barrel.

Although Iran is OPEC's No. 2 oil producer, it has to import about 40 percent of its domestic gasoline needs to meet domestic demand for fuel because it lacks refining capacity.

Washington has described this as "leverage" in the nuclear row with Tehran.

Kazempour Ardebili said Iran would never face problems obtaining gasoline even if some threatened to hinder supplies.

"If anybody makes a threat about not giving gasoline he should know he will not be successful because the main producers of gasoline are members of OPEC and we will never have difficulties in regards to gasoline," he said.

"We believe energy supplies should be de-politicized as much as possible," he added.

Iran has said it will introduce gasoline rationing for motorists as part of efforts to reduce surging consumption, rising at about 10 percent a year, a sensitive issue when Iran faces a possible new round of U.N. sanctions in the atomic row.

So far only government cars have been rationed and rationing for other motorists has been delayed from May 22. No official announcement has been made about when the full rationing system will formally start.