Iran issues stark warning on oil price
War of words over trade sanctions
Robert Tait in Tehran
Monday January 16, 2006
Guardian
Iran stepped up its defiance of international pressure over its
nuclear programme yesterday by warning of soaring oil prices if it
is subjected to economic sanctions. As diplomats from the US,
Europe, Russia, and China prepared to meet today in London to
discuss referring Tehran to the UN security council, Iran's economy
minister, Davoud Danesh-Jafari, said the country's position as the
world's fourth-largest oil producer meant such action would have
grave consequences.
"Any possible sanctions from the west could possibly, by disturbing
Iran's political and economic situation, raise oil prices beyond
levels the west expects," he told Iranian state radio.
In a provocative move, Iran also announced plans yesterday to
convene a "scientific" conference to examine the evidence
supporting the Holocaust. The news comes weeks after President
Mahmoud Ahmadinejad provoked a global outcry by describing the
slaughter of 6 million Jews by the Nazis in the second world war as
a "myth".
Mr Danesh-Jafari's comments echoed fears voiced by energy market
analysts after crude oil prices last week rose above $64 (£36.50) a
barrel as hopes faded of a diplomatic solution to the
dispute.
Last week, Manouchehr Takin, of the Centre for Global Energy
Studies, argued that crude prices could hit $100 a barrel if Iran
stopped exporting. "Supply and demand are very tightly balanced,"
he said.
Mr Danesh-Jafari's warning added weight to veiled threats by Iran's
president on Saturday. Iran had a "cheap means" of achieving its
nuclear "rights", Mr Ahmadinejad said, adding: "You [the west] need
us more than we need you. All of you today need the Iranian
nation."
Recognising the danger, Gernot Erler, Germany's deputy foreign
minister, said yesterday: "We are seeing desperate measures by
Asian countries, mainly China, India and others, to get hold of
energy resources, and for them Iran is a partner they can't do
without." He said it was "dangerous" to put restrictions on trade
relations "which could hurt one's own side more than the other
side".
Iran's Islamic leaders insist that they want nuclear technology to
satisfy its energy needs. The west suspects the intention is to
produce a nuclear weapon.
But even amid the continuing rancour, some Iranian officials
appeared to soften the bellicose stance. Calling for a return to
negotiations, foreign minister Manouchehr Mottaki accused the west
of over-reacting to Tehran's decision last week to remove UN seals
and resume research at a nuclear plant in Natan, when Britain,
France and Germany formally abandoned 2½ years of talks and
demanded Iran's referral to the UN security council.
Although Britain has ruled out military moves against Iran, two
American senators yesterday said the US might undertake a strike of
"last resort" to prevent Iran obtaining nuclear weapons. The
Republican John McCain told CBS: "Everything else has to be
exhausted, but to say under no circumstances would we exercise a
military option would be crazy." Democrat Evan Bayh urged
diplomacy, but said there were elements of Iran's nuclear programme
which, if attacked, "would dramatically delay its
development".
White House spokesman David Almacy said: "The international
community is determined not to let Iran develop a nuclear weapon.
How we address that regime's continued non-compliance will be
decided in the days and weeks ahead."
The UN security council issue will be the centrepiece of today's
meeting, when EU and US officials will attempt to persuade their
Russian and Chinese counterparts of the need for a referral, which
could lead to economic sanctions.