Iran shrugs off sanctions, says it will survive without difficulty

Reacting to sanctions on Iran, the country’s President Mahmoud Ahmadinejad stated that Iran can survive without exporting crude oil for years.

During one of his official visits to the province of Hormozgan, the Iranian President stated that “Some want to create problems for Iran by sanctioning oil.”  He continued by stating that “I should say that we have so much funds that even if we don’t sell for two, three years the country will still be managed easily.” While this may be true, Iran should also consider the full impact of a possible mass withdrawal of foreign oil investment in the country.

After a long break, the permanent member countries of the UN Security Council namely China, France, Russian Federation, U.S., U.K., as well as Germany (non-permanent member) and Iran will meet again this month to discuss anew issues about Iranian sanctions. Iran is the second top oil producer among OPEC member countries.  It is reportedly struggling against U.S. and EU-led restrictions which are targeted not only at its energy sectors but at its business and financial investment sectors as well. Should discussions lead to more disagreements, Iran may have to face another round of restrictions.  Meanwhile, the European sanctions on Iran are set to commence July 1 of this year.

Rostam Qasemi, oil minister of Iran stated that it stopped selling crude oil to Hellenic Petroleum SA (ELPE) as well as to Motor Oil Hellas SA in Greece.  The minister, however, said that the reason is due to non-payment.

In February this year, Iran’s Oil Ministry curtailed oil sales to U.K. and France and this had somehow affected crude oil prices in the region.  Of late, it has also stopped selling oil to Spain. Iran reportedly plans to do the same with Italy and Germany. The EU ban is still months away but Iran seems to have pre-empted it in view of these incidents.

Countries belonging to the EU bought close to 20 percent of crude oil and condensates being exported by Iran.  This translates to about 452,000 oil barrels per day during the first six months of 2011.

Iran claims that its nuclear program is not aimed at weapons development, as suggested by the United States and Europe, and stressed that it has no intention of exploiting it for violent means.

By Chris Termeer