Iran: We will 'confront' new EU oil sanctions

Iran's Azadegan oil field in southwest of Tehran, Iran. (AP/Vahid Salema)

Iran has stored up imported goods and hard currency for a "battle" against EU sanctions targeting the country's vital oil sector that went into effect Sunday, officials said. They acknowledged though that the measures, which aim at pressuring the Islamic Republic over its nuclear program, may cause economic disruptions.

Vice President Mohammad Reza Rahimi said the country has stockpiled necessities to reduce the impact of the embargo hitting the oil and banking sectors.

"Today, we are facing the heaviest of sanctions and we ask people to help officials in this battle," Rahimi was quoted by state television's website as saying at a religious conference. He said the "dastardly sanctions" might cause "occasional confusion" in the market, but that the Iranian nation would not be stopped.

Central bank governor Mahmoud Bahmani also told the semiofficial Mehr news agency that Iran has "plans" to deal with the embargo and enough hard currency to meet its import needs.

The EU said earlier this week that all contracts for importing Iranian oil will have to be terminated from Sunday. Also, European companies will no longer be involved in insuring Iranian oil.

The measures come on top of previous sanctions levied by the US and the West that have already hit Iran's economy. US officials say the American sanctions have cut exports of Iranian crude from about 2.5 million barrels a day last year to between 1.2 and 1.8 million barrels now.

"We have not remained passive. To confront the sanctions, we have plans in progress," said Bahmani. He did not elaborate on the plans.

Iran's Oil Minister Rostam Ghasemi meanwhile ordered his staff to "mobilize" against "illegal sanctions," Mehr said. It did not say what the measures were.

Late Saturday Ghasemi told state television that Iran has weathered previous rounds of sanctions. "I do not see it as a problem that enemies have imposed an embargo today," he said. "They have imposed similar sanctions years ago, and nothing happened."

He said Iran has already stopped selling oil to many EU countries and sold to others instead. "Developing countries and countries with fast economic growth have no alternative to oil. Fortunately, because of the quality of our country's oil, all are interest in using it."

Mehr published its own analysis listing measures that Iran could take to counter the sanctions, including shutting the vital Strait of Hormuz off its southern coast that handles a fifth of the world's oil supply — a threat that has repeatedly been made by Iranian officials in the past. The semiofficial news agency's editorials sometimes reflect views held by top Iranian officials who do not wish to state them publicly.

On Sunday, however, Iran's Defense Minister Gen. Ahmad Vahidi made statements to the official IRNA news agency about the Strait in which he did not mention any plans to close it — remarks that suggest that Iran is playing down the threat in dealings with the West.

Vahidi said Iran is the main protector of the waterway, and that Tehran "has confronted anybody who tried to endanger the Strait."

Mehr also suggested that Iran could make use of hard currencies other than the US dollar and the euro, form its own insurance syndicate to replace foreign companies that withdraw from the market, store up oil in tanks for later sale so as not to cut production, or simply reduce oil production to save its reserves for the future.

The US and EU measures are intended to pressure Iran over fears that it is developing nuclear weapons.

Iran denies the charges, saying its nuclear program is aimed at peaceful purposes like power generation and cancer treatment. (nvn)