Monday, October 03, 2005

Iran attempts to backtrack from oil supply threat

FT.com / World / Middle East & Africa - Iran attempts to backtrack from oil supply threat

Iran's presidential office on Sunday tried to backtrack from an interview with president Mahmoud Ahmadi-Nejad in the Khaleej Times newspaper, which on Saturday quoted him as saying that Iran would withhold oil supplies if its nuclear programme was referred to the UN Security Council.


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The interview added to the uncertainty surrounding Iran's strategy in the face of the International Atomic Energy Agency voting for referral to the UN at its next meeting in November.

The IAEA last month found Iran to be in "non-compliance" with the Nuclear Non-Proliferation treaty, and Iran has subsequently rejected steps required by the IAEA to ease international concerns over its nuclear programme.

Iranian officials have instead threatened to resume uranium enrichment, the most sensitive part of the nuclear cycle, which it suspended two years ago as part of talks now broken off with the European Union.

Iran is the second-largest producer within the Organisation of the Petroleum Exporting Countries, with a quota of about 4m barrels a day, making its economy heavily dependent on oil sales that represent 80 per cent of total exports. The country has diversified its markets. Mohammed-Hadi Nejad-Hosseinian, the deputy oil minister, told the FT in March 70 per cent of its oil exports went "east" and 30 per cent "west".

Saturday's article in the Khaleej Times, published in the United Arab Emirates, quoted Mr Ahmadi-Nejad saying Iran would respond to referral "for example by holding back on oil sales or limiting inspections of our nuclear facilities. We don't want to be at war with the world, [but], as you see, they are trying to impose their will on our country".

The presidential office on Sunday denied Mr Ahmadi-Nejad had been interviewed by the newspaper but not the specifics of what he was quoted as saying.

The newspaper said the "confusion" might have arisen from the reporter being a freelance who more often worked for another publication.

The incident is likely to strengthen those voices questioning the competence of Mr Ahmadi-Nejad and his advisers. Some senior officials have privately expressed concern over Tehran's diplomacy since Mr Ahmadi-Nejad took over in August and replaced many experienced officials, including those handling the nuclear issue. But others argue Tehran's new government is seeking confrontation or at least underestimating its potential effects.

Last week, the Islamic Revolution Mujahedin Organisation, an influential reformist group, warned the nuclear issue should not be "exploited for domestic political consumption" and that referral to the UN Security Council would mean "handing over Iran's national security to the US".

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