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China Daily Website

Iran calls Western moves on oil'political warfare'

Updated: 2012-08-02 08:10
By Zhao Shengnan ( China Daily)

Iran voiced its opposition to tightening Western sanctions, calling the new US sanctions "political warfare" and vowing to counter by retooling the country's oil-dependent economy.

Western sanctions on Iran's oil sector are a "ridiculous" move that seeks to deprive the world of energy resources at a time when demand is growing, President Mahmoud Ahmadinejad was quoted as saying on Tuesday.

The comments came a day after US President Barack Obama ordered new sanctions on Iran's energy sector and on banks in China and Iraq that the US claims help the Islamic country avoid international penalties.

"It's very funny, they (the West) use oil as a political weapon against a country that is an oil producer itself," Ahmadinejad said at the inauguration of a new fuel-making unit at a Teheran oil refinery.

Iran says its nuclear work is for civilian energy uses, but suspicions the country will use enriched uranium for nuclear weapons have resulted in sanctions. Washington imposed a new round of sanctions in June, targeting financial institutions in countries that buy Iranian oil. On July 1 the European Union halted all contract with Teheran.

On Tuesday, Iranian central bank governor Mahmoud Bahmani was quoted describing the sanctions as "no less than a military war" and said Iran must respond with its own "asymmetrical" economic countermeasures.

The report from the official IRNA news agency said a special headquarters has been set up to coordinate efforts to fight back against the sanctions.

Meanwhile, Ahmadinejad suggested Iran should stop exporting crude oil and instead try to sell refined oil products to overcome US-led sanctions and embargos. The remark echoed calls for Iran to move away from crude oil export as its mainstay and heavily invest in networks to produce car-ready fuels and other petrochemical products.

Iran relies on oil for some 80 percent of its foreign revenue. The International Energy Association has said that exports of Iranian oil have dropped from 2.5 million barrels a day in 2011 to below 1.5 million barrels a day in June this year.

Up until 2007, Iran's inadequate refineries and rising demand made it highly dependent on imported gasoline, a vulnerability Western powers have targeted by blocking supplies to the country.

Due to stunted foreign investments by the West to Iran and shrinking revenue of the current stagnant oil prices, Iran will struggle to fully develop its refineries in the future, said Yang Guang, director of the Institute of Western, Asian and African Studies at the Chinese Academy of Social Sciences.

However, Rostam Ghasemi, Iran's oil minister, said $100 per barrel seems like a "fair" price, and there is no need for an additional OPEC meeting to discuss oil prices.

Yang said as Iran was facing a deteriorating economy at home, the country may want to negotiate with the West to find a resolution, but the US and EU would refuse talks because now they have gained the upper hand.

"Although the US is not likely to conduct military attacks in Iran before the end of this year's presidential election, it may take a stronger stance over Iran next year," he said.

Before arriving in Israel on Tuesday to discuss "the threat" of Iran's nuclear program and sharing intelligence information with Israeli leaders, US Defense Secretary Leon Panetta denied Israeli press reports that he planned to share with the Israelis any US plans for military action against Iran.

AP, Xinhua and Reuters contributed to this story.

zhaoshengnan@chinadaily.com.cn

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