Sanctions will lead to 50pc rise in oil price, Iran warns
Iranian officials predicted a 50pc rise in global oil prices yesterday as the country's oil minister declared exports to "some countries" would be cut off following the imposition of European Union sanctions.
The rise would push the price of oil from its current level of just over $100 a barrel to $150.
In what will be seen as evidence of brinksmanship, Iran's parliament postponed debate on a proposal immediately to halt oil deliveries to the EU, which accounts for 20pc of Tehran's exports of crude.
Despite postponing the debate, Rostam Qasemi, Iran's energy minister, promised that exports to some countries, which he did not name, would be ended "soon".
Experts from the International Atomic Energy Agency (IAEA) arrived in Tehran at the weekend on a three-day mission to investigate the suspected military dimensions of Iran's nuclear programme.
The visit comes after the regime reacted with fury to a decision by the EU and the US last week to sanction the country's central bank and oil sector.
With the sanctions carrying the potential to trigger a deep economic crisis in the country, Iran has responded with belligerence and conciliation.
That the government of Mahmoud Ahmadinejad, Iran's prime minister, has allowed the inspectors in at all has angered hardliners. Demonstrators met them at Tehran's airport carrying photographs of a nuclear scientist assassinated in the city this month.
Iran says the EU accounts for only 18pc of its output and that it can find new customers. It says the embargo will hurt the west more than Iran, in part by causing a spike in prices.
"It seems we will witness prices from $120 to $150 in the future", head of the National Iranian Oil Company Ahmad Qalehbani said.
Ali Akhbar Salehi, the Iranian foreign minister who is seen as relatively moderate, spoke of his optimism about the IAEA's visit, promising that all the inspectors' questions would be answered. "We have nothing to hide," he said.
But the hawkish speaker of parliament, Ali Larijani, was more hostile, threatening that Iran would sever relations with the IAEA if it showed that it was a "tool" of the west.
The EU is phasing in its sanctions on importing Iranian oil over six months to allow member states time to find alternative markets.
Ahmed Qalabani, the deputy oil minister, boasted that measures to curtail exports would send oil prices rising to between $120-150 a barrel, up from $108.
"We will not leave enemies' sanctions unanswered and we will impose other sanctions on them in addition to closing Iran's oil supplies to Europe," said Mohammed Karim Abedi, a senior Iranian legislator, who added that an ban on oil sales to the EU would last between five and 15 years.
The US and its allies argue that Iran is trying to develop nuclear weapons, while Tehran says the programme is for purely peaceful purposes.
With some 3.5 million barrels of crude production, Iran is the second largest OPEC producer. Some 80pc of the country's foreign revenue comes from exporting around 2.2 million barrels of oil per day. (© Daily Telegraph, London)