Iran: oil price could soar to $250-a-barrel

City A.M. Reporter
IRAN yesterday warned the West that any move to block its oil exports would more than double crude prices with devastating consequences on a fragile global economy.

“As soon as such an issue is raised seriously the oil price would soar to above $250 (£160) a barrel,” foreign ministry spokesman Ramin Mehmanparast (pictured below) said in a newspaper interview.

The comments come as Iran strives to contain international reaction to the storming of the British embassy last week, a move which drew immediate condemnation from around the world and may galvanise support for tougher action against Tehran.

Washington and EU countries were already discussing measures to restrict oil exports after the United Nations nuclear watchdog issued a report in November with what it said was evidence that Tehran had worked on designing an atom bomb. Iran claims its nuclear programme is entirely peaceful.

The US Senate voted on Thursday to penalise foreign financial institutions that do business with Iran’s central bank, which takes payment for the 2.6m barrels Iran exports a day. The European Union is considering a ban – already in place in the United States – on Iranian oil imports.

So far neither Washington nor Brussels has finalised its move against the oil trade or the central bank amid fears of the possible impact on the global economy of restricting oil flows from the world’s fifth biggest exporter.

But the British embassy attack dragged relations with Europe to a long-time low and Iran is now facing rising rhetoric about a direct hit on its main source of foreign earnings.