Daily Israel Report

Iran Scoffs at Western Sanctions

Iran says Western sanctions are having no effect because demand for its oil outstrips its customers' other concerns.
By Gabe Kahn.
First Publish: 1/19/2012, 7:53 PM

Crude oil tanker
Crude oil tanker
Flash 90

Iranian Ambassador to South Korea Ahmad Masoumifar on Wednesday said there is a high demand for Iran's crude oil supplies and Tehran has no problem maintaining exports.

Masoumifar also shrugged off Iran's shrinking pools of customers, saying "we (Iran) are producing about 80 million barrels [of oil] and there is demand for about 90 million."

In a Tuesday interview with The Korea Times, he said US sanctions are "a dangerous idea" meant to impose Washington's domestic law internationally.

Masoumifar’s comments came just one day after British foreign minister William Hague told reporters that he and his EU counterparts were working to hammer out the details of sanctions targeting Iran's oil industry ahead of a January 23 meeting.

While Iran has been able to shore up lost oil contracts by increasing oil exports to China and Russia, Masoumifar's claim has been widely panned as Iranian propaganda by analysts who note Iran would not have threatened to close the Strait of Hormuz in the event of further Western sanctions if they were not taking their toll.

The Iranian rial has been struggling as Iran's Western currency reserves run thin and its export markets narrow. A brief surge in the rial following US sanctions, which have yet to be fully implemented, was killed when President Mahmoud Ahmadinejad refused to raise interest rates.

Market analysts predict EU sanctions would result in a further weakening of the Iranian rial, should they be imposed.

Western experts, however, say that more sanctions are unlikely to deter Iran from its drive to obtain nuclear weapons. On Wednesday, former US ambassador to the UN John Bolton warned that North Korea – languishing in deep poverty under heavy sanctions – managed nonetheless to detonate two nuclear devices.

Iran denies it is seeking nuclear weapons, but the International Atomic Energy Agency has reported Tehran has sought -- and continues to seek -- nuclear technology with solely military applications.

Israel, the West, and Iran's Gulf Arab rivals have taken Iran's refusal to allow IAEA inspectors access to its nuclear facilities under the Nuclear Non-Proliferation Treaty –- to which it is a signatory -– as a sign of bad faith.

Nonetheless, more Western sanctions will not hamstring Iran's oil exports as they do not compel non-Western nations to abide by them. Additionally, Russia has vowed to veto any attempts at universal sanctions on Iran at the United Nations.