New York Times: Iran threatened on Tuesday to halt all its oil exports if the West’s antinuclear sanctions on the country are strengthened, apparently in the hope that such a warning would spook the international petroleum market by raising prices and reminding the world of Iran’s potential to wreak havoc with the global economy. The New York Times
By RICK GLADSTONE
Iran threatened on Tuesday to halt all its oil exports if the West’s antinuclear sanctions on the country are strengthened, apparently in the hope that such a warning would spook the international petroleum market by raising prices and reminding the world of Iran’s potential to wreak havoc with the global economy.
But the threat, made by Rostam Qasemi, Iran’s oil minister, at the World Energy Forum, a conference in Dubai, United Arab Emirates, appeared to have no impact. In a possible reflection of how steeply Iran’s influence in the market has eroded, oil prices fell to a three-month low.
Iran holds the world’s fourth-largest oil reserves and was once the second-biggest producer in the Organization of Petroleum Exporting Countries, behind Saudi Arabia. But the regimen of American and European sanctions over the past year has severely restricted its ability to produce and sell oil, the country’s most important export.
The International Energy Agency, a group of mostly Western oil importers, reported this month that Iran’s daily production fell to a nearly 25-year low of 2.63 million barrels a day in September and that oil exports that month totaled only 860,000 barrels a day, compared with 2.2 million barrels a day at the end of 2011. Iran has disputed those figures.
At the same time, Iranian officials have acknowledged that the Western sanctions have wounded the country’s economy. Outside experts, noting a severe devaluation in the currency and other troubling indicators, have said the country’s economic problems are severe and worsening quickly. The United States and European Union have said more sanctions are looming.
Mr. Qasemi was quoted by news agencies at the Dubai conference as saying Iran had contingency plans to survive without any oil revenue if further sanctions were applied. The sanctions are meant to pressure Iran into suspending its uranium enrichment, which Western nations suspect is meant to enable Iran to produce nuclear weapons.
“If you continue to add to the sanctions, we cut our oil exports to the world,” the minister was quoted as saying. “We are hopeful that this doesn’t happen, because citizens will suffer. We don’t want to see European and U.S. citizens suffer.”
But Mr. Qasemi’s remarks, which might have once caused oil traders to bid up the price on fears of a supply shortage, had no effect. On the New York Mercantile Exchange, the price of the benchmark grade fell $1.98 a barrel or 2.3 percent to $86.67, the lowest closing price since July 12.
“It’s a classic weak man’s poker hand,” Cliff Kupchan, a Washington-based analyst at the Eurasia Group, a consulting firm, said of the Iranian minister’s remarks. “It’s what you do if you’re running out of chips and you need more money.”
Oil traders attributed the weakness in the oil market to fears about a global economic slowdown that would reduce demand in the months ahead.