Gas station (file)
Gas station (file)Israel news photo: Flash 90

Although the amount of oil Iran is producing and selling on the world market has shrunk substantially in recent months, due to U.S. and EU sanctions, Iran has still been selling oil to countries in the Far East like China – and that supply, experts say has been one factor in why the price of oil has not risen even more. And on Tuesday, Iran struck back at Western sanctions against it, saying that if the sanctions continued it would stop producing oil altogether.

The sanctions have been the cause of significant economic instability in Iran, according to Western economists. Iran's currency has crashed against the dollar in recent weeks, and inflation has put even basic items out of reach for many citizens. Protests have reportedly cropped up in principal Iranian cities, with police and Revolutionary Guards brutally suppressing the protests.

Iran is demanding that the sanctions be halted, Iranian oil minister Rostam Kasami said Tuesday. Otherwise, he said, “we will stop exporting oil.”

Kasami's comments are the latest in a series of threats by Iranian officials to halt oil production, with the intention of creating a shortage on world oil markets, as China, India, and other Iranian oil customers scramble to buy oil from other sources. “We have prepared an economic plan to support Iran without any oil exports at all,” Kasami said. “Until now we have been able to live with the sanctions, but if they continue or are increased, we will use this plan.”

Iran claims to be producing 4 million barrels of oil a day, although Western experts placed that number at 2.7 million, and that has been confirmed by OPEC. Still, loss of that supply could drive prices up, economists said.