Reuters: The world economy could handle any cutoff of Iranian oil exports “for a while,” U.S. Energy Secretary Sam Bodman said on Tuesday. By Tom Doggett
WASHINGTON (Reuters) – The world economy could handle any cutoff of Iranian oil exports “for a while,” U.S. Energy Secretary Sam Bodman said on Tuesday.
“We certainly could handle it for a while,” Bodman told reporters.
Bodman said the U.S. emergency crude oil stockpile could be tapped in the unlikely event that Iran cuts oil exports to retaliate for possible sanctions imposed by the United Nations over Iran’s refusal to stop enriching uranium.
“If push were to come to shove and there would be a reduction in availability of oil exports from Iran, which I do not anticipate … there is the Strategic Petroleum Reserve,” he said, referring to the 700 million-barrel capacity stockpile created by Congress in 1975 after the Arab oil embargo.
Iran is the world’s fourth-biggest oil exporter and holds 10 percent of proven global oil reserves.
Oil swept to a record $75.35 a barrel in April as the dispute between Iran and the United States over uranium enrichment rumbled on. On Sunday, Iran Supreme Leader Ayatollah Ali Khamenei said oil flows from the Gulf would be endangered if Washington made a “wrong move.”
But there was a more conciliatory tone on Tuesday when Iran took delivery of a package of incentives put together by Britain, France and Germany and approved by the United States, China and Russia.
“The proposals had some positive steps in them and some ambiguities which should be removed,” Ali Larijani, secretary of Iran’s Supreme National Security Council, said after meeting European Union foreign policy chief Javier Solana.
Bodman added, “The focus is not on punishing (Iran). The focus is trying to work with them to try to encourage their participation.”
Energy traders are concerned that if the United Nations punished Iran with sanctions, Tehran could try to hurt the Western economies by stopping some or all of its oil exports — as Iraq used to do before the U.S. invasion in 2003.