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Iran warns Saudi a oil sanctions debate deepens
by Staff Writers
Tehran (AFP) Jan 17, 2012

Pressuring Iran won't disrupt global oil supply: US official
Johannesburg (AFP) Jan 17, 2012 - The world has enough oil suppliers to continue meeting its needs even if Iran moves to disrupt supply in response to Western sanctions over its nuclear programme, a US official said Tuesday.

"It's a global market, and oil is fungible and easily moved around," Deputy Energy Secretary Daniel Poneman told journalists in Johannesburg.

"Which is precisely why we think that if we handle this responsibly and well, that the world will be able to satisfy its current demands without disruptions even as we try to make sure that we ramp up the pressure on Iran to comply with their non-proliferation obligations."

Oil markets have been jittery amid escalating tensions over Iran's threat to close down the strategic Strait of Hormuz, the narrow channel at the entrance to the Gulf through which 20 percent of the world's oil flows.

Western governments have moved to step up sanctions on Iran over its nuclear programme, threatening an embargo on oil exports.

The step has drawn an angry response from Tehran, which has in turn threatened to shut the strait if it is attacked or heavy sanctions are imposed.

The standoff has driven oil prices soaring over $100 a barrel, hitting an eight-month high earlier this month.

But Poneman downplayed the impact of a closure, saying oil producers in Africa and the Americas have been stepping up their role in world supply.

Poneman was speaking in Johannesburg during an Africa tour that will include a stop in Ghana to discuss expanding its oil sector.

Ghana began large-scale production about a year ago from an oil field known as Jubilee, one of the largest recent discoveries in West Africa.

Iran warned Saudi Arabia on Tuesday to rethink an offer to make up for oil lost to world markets as a result of threatened curbs on its exports as diplomats said an EU embargo may be in force by July.

Foreign Minister Ali Akbar Salehi urged Riyadh to "reflect" on its pledge to use its spare capacity to compensate for any reduction in Iran's oil sales that results from US-led efforts to tighten sanctions over the Islamic republic's controversial nuclear programme.

Salehi said the Saudi offer was "not friendly."

In a boost to Iran's efforts to protect its key oil sector, its second biggest client, India, said it had no plans to curtail purchases in response to the US-led campaign.

"We continue to buy oil from Iran," Indian Foreign Secretary Ranjan Mathai said in New Delhi.

"We have accepted sanctions which were made by the United Nations. Other sanctions do not apply to individual countries," he added in reference to unilateral sanctions adopted by the European Union and the United States.

Energy hungry India is Iran's second largest client after China, and absorbs about 20 percent of its crude exports, buying about 400,000 barrels per day at an annual cost of around $12 billion (9.4 billion euros).

Meanwhile, ahead of a key meeting on Monday, diplomats in Brussels said the European Union could have an embargo on Iranian oil imports in force by July as a compromise took shape between champions of tougher sanctions and member states that rely heavily on purchases from Iran.

"A deal should be finalised in the coming days," one diplomat said. "A consensus is taking shape over the transitionary phase," said another.

There had been been disagreement within the 27-nation bloc, which takes in some 450,000 barrels per day of Iranian oil, about the grace period that should be allowed for the ban to be phased in.

Some member states wanted an earlier, three-month deadline, whereas financially stressed nations that rely on Iranian crude -- notably Greece, Italy and Spain -- wanted up to a year.

Iranian oil accounted for 34.2 percent of Greece's imports, 14.9 percent of Spain's and 12.4 percent of Italy's in the first nine months of last year, according to the latest EU figures.

Washington has been spearheading a campaign to squeeze Iran's oil exports to put greater pressure on its nuclear programme, which Western governments fear is cover for a drive for a weapons capability, an ambition Tehran denies.

President Barack Obama recently signed a bill allowing penalties on foreign banks who settle oil import costs with Iran's central bank.

Last week, US ally Japan appeared to backtrack on a pledge to cut its imports from Iran, while China has refused to bow to US pressure.

Iran has not only been battling mounting US-led pressure on its economy, but also a covert campaign, including murder and sabotage, which it has blamed on Israel and the United States, despite Washington's denials and Israel's silence.

President Mahmoud Ahmadinejad ordered security stepped up for all of Iran's nuclear scientists following the assassination last week of Mostafa Ahmadi Roshan, the 32-year-old deputy director of a key facility.

"Whoever is active in the nuclear field will be put under special care," official media quoted First Vice President Mohammad Reza Rahimi as saying.

Iran has said it is willing to restart talks with world powers on its nuclear activities that collapsed a year ago, but it has not formally responded to an EU letter offering a resumption of the negotiations.

A high-level delegation from the UN nuclear watchdog, the International Atomic Energy Agency, is to visit Iran from January 29 to 31, the Fars news agency reported.

Iran's envoy to the watchdog, Ali Ashgar Soltanieh, said the visit was "a new sign of the transparency in Iran's nuclear programme and activities and in our interaction with the International Atomic Energy Agency," Fars added.

But a defiant Iran has also raised new Western concerns in recent weeks by starting uranium enrichment operations at a heavily defended bunker southwest of Tehran, and by announcing fresh naval exercises in the Strait of Hormuz, a strategic choke point for much of the Middle East's oil.


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EU set to implement Iran oil embargo by July: diplomats
Brussels (AFP) Jan 17, 2012 - European governments are set to implement an Iranian oil embargo by the start of July, giving companies time to phase out existing contracts, EU diplomats said Thursday.

"A deal should be finalised in the coming days" by European Union ambassadors, said one, ahead of Monday talks among EU foreign ministers in Brussels.

"A consensus is taking shape over the transitionary phase," another added.

Some countries wanted an earlier, three-month deadline, whereas financially-stressed nations that rely on Iranian crude -- Greece, Italy and Spain -- wanted up to a year.

The EU may also allow Iranian companies to continue repaying debts to European firms with crude instead of cash, an idea raised by Italy. That would mean Tehran having less crude to sell on the market.

EU foreign ministers meet in Brussels on January 23 to decide on the new sanctions, part of a concerted effort with the United States to pressure Iran into halting its controversial nuclear programme.

The EU takes in some 450,000 barrels per day of Iranian oil, making it a key market alongside China, which has refused to bow to pressure from Washington, and India.

Iranian oil accounted for 34.2 percent of Greece's total oil imports, 14.9 percent of Spain's and 12.4 percent of Italy's in the first nine months of last year, according to the latest EU statistics.

Oil prices climbed in New York Tuesday on positive US and Chinese economic data and after Saudi Arabia said it would like to keep prices high at around $100 a barrel, analysts said.

Saudi Oil Minister Ali al-Naimi said Monday that the kingdom's output could be boosted by around 2.6 million barrels a day to offset a potential cut in Iranian exports.

Iran on Tuesday warned Saudi Arabia to reconsider its vow to make up for any shortfall, saying Riyadh's pledge to step into the market was unfriendly.


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US urges South Korea to cut Iranian oil imports
Seoul (AFP) Jan 17, 2012
A senior US official urged South Korea Tuesday to reduce purchases of crude oil from Iran in line with a US-led drive to sanction Tehran for its suspected nuclear weapons programme. "We are urging all of our partners to help us, to work with us in putting pressure on the government of Iran to get it to negotiate seriously," said Robert Einhorn, State Department special adviser for nonprolif ... read more

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