x Abu Dhabi, UAEMonday 24 July 2017

Iran 'not concerned' about EU ban on oil imports

Iran's foreign minister says it will survive sanctions.

TEHRAN // Iran is "not concerned" about Europen Union moves to ban Iranian oil imports and will survive them as it has other western measures, the foreign minister, Ali Akbar Salehi, said yesterday.

"Iran has always been ready to counter such hostile actions and we are not concerned at all about the sanctions," Mr Salehi said in a televised joint news conference with the visiting Turkish foreign minister, Ahmet Davutoglu.

"We have taken provisional measures. We have weathered the storm for the past 32 years and we will be able to survive this as well," Mr Salehi said.

Diplomats in Brussels yesterday said the 27-nation EU bloc has reached an "agreement in principle" to ban Iranian oil imports and was discussing the timing of when the measure would begin.

The ban would add to other sanctions already imposed by the West over Iran's nuclear programme, including a US measure enacted last week that targets Iran's central bank, which processes most of the Islamic republic's oil sales.

The EU is the second-biggest destination for Iranian oil after China, accounting for about 15 per cent of the 2.6 million barrels exported each day, or 450,000 barrels.

Iran relies on oil sales for 80 per cent of its foreign revenues.

Iran's military and political leaders have threatened to close the strategic Strait of Hormuz in the Gulf - through which 20 per cent of the world's oil flows - to all Middle East oil tankers if Iran's petroleum sales are blocked.

They warned the "full force" of its navy would be unleashed if the US tries to redeploy an aircraft carrier to its 5th Fleet base in Bahrain.

The developments were underpinning a rise in oil prices.

Brent North Sea oil for delivery in February was trading at $113.74 per barrel in London, while New York's main contract, West Texas Intermediate for delivery in February, was at $102.54 per barrel.

Tehran has also been holding out the possibility of it returning to talks on its nuclear programme that have been stalled for a year.

The EU foreign policy chief, Catherine Ashton, who represents the six world powers involved in the negotiations with Iran - Britain, China, France, Germany, Russia and the US - sent a letter in October 2011 offering to restart talks.

Although her office said it was still waiting for a formal response from the Iranians, Mr Salehi said that Iran's top nuclear negotiator, Saeed Jalili, "has said in the past couple of months that Iran is ready to resume talks".

He said he was waiting for Ms Ashton to propose a date and venue. "Turkey is the best place for the talks to take place. But it should be at a place of mutual agreement," he added.

Mr Davutoglu said he had conveyed Ms Ashton's request for a formal reply, adding: "We want to see both sides go back to the negotiating table".

The US yesterday hailed the EU move towards banning Iranian oil and said it wanted other countries around the world to follow suit.

"This is consistent with tightening the noose on Iran economically," said the US state department, spokeswoman, Victoria Nuland.

To that end, the US treasury secretary, Timothy Geithner, was to travel to China and Japan next week to discuss sanctions "coordination".

Beijing on Wednesday said it opposed "unilateral sanctions" against Iran.

But Washington hopes that, at the very least, China would extract deep discounts if it continues to buy Iranian oil.

Iran's economy is already facing turmoil, with its currency, the rial, showing extreme volatility.

After plummeting to an all-time low against the dollar on Monday, in the wake of the new US sanctions, Iran's central bank stepped in to shore up the rial by imposing a capped exchange rate.

Also yesterday, a former United Nations nuclear official said that Iran appeared to be testing atomic fuel intended for a planned reactor that could one day yield nuclear bomb material.

Iran is building a heavy water research reactor near the town of Arak, a type that western experts say could produce plutonium for nuclear weapons.

Iran has said its nuclear programme was entirely peaceful.

Earlier this week, Iran announced it had made a breakthrough in producing fuel rods for nuclear power plants.

Olli Heinonen, the former head of nuclear safeguards inspections worldwide at the UN International Atomic Energy Agency, said he believed the fuel was being developed for Arak, which Iran hopes to bring on line by the end of next year.

Spent fuel can be reprocessed to make plutonium, possible bomb material, but western fears about Iran's nuclear activities focus on its enrichment of uranium, which can provide the core of nuclear weapons if refined much more.

"The rod Iran claims to have made contains natural uranium, suggesting that it is intended for the IR-40 heavy water reactor at Arak," Mr Heinonen wrote in Britain's Guardian newspaper.

* Agence France-Presse, Reuters and Bloomberg