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Iran warns Gulf Arabs as Asian powers prepare for oil ban

Iran has warned Gulf Arab countries they will suffer consequences if they raise oil output to replace the country’s crude oil, currently targeted by US sanctions.

 

 

 

The warning comes as major Asian economies search for contingencies in light of new US sanctions that aim to limit Iranian oil exports.

China’s Premier Wen Jiabao is visiting Saudi Arabia to discuss access to the country’s oil reserves, while South Korea signed a deal with Oman to ensure a stable supply of oil to Seoul.

Iran’s top three oil export destinations are all Asian countries, with South Korea the fifth highest recipient of Iranian oil.

On Saturday Saudi Oil Minister Ali al-Naimi said the world’s No. 1 petroleum exporter was ready and able to meet any increase in demand, but made no direct reference to sanctions on Iran.

Naimi’s remarks are a repeat of earlier reassurances by Saudi Arabia and Qatar to fill the gap in oil supply to Asia’s powerhouses in the face of any ban on Iranian oil.

Iran’s OPEC Governor Mohammad Ali Khatibi responded that Tehran would regard as an unfriendly act any move by neighboring Gulf Arab oil exporters to make up for Iranian crude.

"If (they) give the green light to replacing Iran’s oil, these countries would be the main culprits for whatever happens in the region – including the Strait of Hormuz," Khatibi told the Sharq daily newspaper, referring to the narrow sea channel through which a third of the world’s oil tanker traffic passes.

"Our Arab neighbor countries should not cooperate with these (US and European) adventurers… These measures will not be perceived as friendly," he said.

Iran’s navy commander Habibollah Sayyari said Tehran could exert control over the Strait of Hormuz.

The United States, whose warships patrol the region, says it will not tolerate any attempt to disrupt shipping through the strait.

Britain has also vowed it will take action against any Iranian move to close the strait, and has dispatched its advanced destroyer, the HMS Daring, to the Persian Gulf.

Asian alternatives

The continued US pressure for sanctions against Tehran appears to be forcing energy-hungry Asian economies to seek alternative sources of oil.

A US delegation arrived in South Korea on Monday to press the implementation of new sanctions after Seoul announced an agreement with Oman to help overcome any shortcomings in oil imports.

South Korea, the world’s fifth-largest importer of crude, buys 10 percent of its oil from Iran and 2 percent from Oman, but is seeking a waiver of toughened US sanctions on Tehran.

Referring to the Omani deal, a statement from South Korean Prime Minister Kim Hwang-sik’s office said:

"Both sides have agreed to closely cooperate to continue stable energy supply, including liquefied natural gas and crude oil in the face of instability in the international crude oil markets."

China has also signed a deal with Saudi Arabia on the civilian use of nuclear energy as part of a package of deals signed over the weekend to strengthen ties with the top oil exporter, Saudi state news agency SPA reported.

The Chinese premier visited the oil-rich kingdom to press the country to open its oil and gas wealth to more Chinese investment, Chinese media said on Sunday.

Although China has voiced its opposition to US unilateral sanctions on Iran, Beijing remains concerned about a drop in Iranian oil supply.

US-Israeli war games delayed

The United States and Israel also postponed war games originally scheduled to take place in the coming weeks to later in the year.

The delay was announced amid high tensions with Iran, but officials in both countries denied the postponement was related.

"Israel and the United States have agreed to postpone the maneuver planned for spring," an unnamed official told Reuters.

"The exercises will take place between now and the end of 2012," the official added.

Western nations and Israel accuse Iran of seeking to develop nuclear weapons, a charge Tehran strongly denies.

Iran says its nuclear program is designed for peaceful purposes and highlights Western double standards over Israel’s nuclear program.

Israel is the only Middle Eastern state known to possess a nuclear arsenal but has avoided international scrutiny.

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