Iran rolled out its “oil weapon” Wednesday and announced a cut in exports to six European countries, including France, Spain and Greece.
The government-run PRESS TV announced, “In response to the latest sanctions imposed by the EU (European Union) against Iran's energy and banking sectors, the Islamic Republic has cut oil exports to six European countries.”
It named them as the Netherlands, Spain, Italy, France, Greece and Portugal in response to a EU boycott of new oil contracts with the Islamic Republic.
The move immediately sparked a one percent rise in the price of crude oil on world markets, sending a cost of barrel of crude to more than $101.
Iran has insisted the Western sanctions will backfire because it can make up for the lost sales by exporting to other countries. It also has warned that higher oil prices could wreak havoc with the fragile Western economies, where some countries in Europe already are in a recession.
"Under current circumstances, the prices of oil will increase due to cold weather and also the psychological impact of foreign sanctions imposed on Iran's oil exports," Iran’s OPEC official Mohammad Ali Khatibi told the semi-official Mehr news agency.
Saudi Arabia, which shares Western fears of a nuclear Iran that threatens to dominate the Middle East, has vowed it will pump more oil to make up for any shortfall.
Iran sits on the world’s third largest oil reserves and second largest natural gas fields.
Asian countries have not cooperated with the Western efforts for international sanctions. Most of Iran’s oil exports are to South Korea, China, India and Japan, which may benefit from the Western boycott if it forces Iran to offer discounts to its other customers as a temptation to resist pressure to join the move for sanctions.