Iran Warns Arab Nations Not To Boost Oil Production As US And EU Look To Sanctions

Iran Warns Arab Nations Against Oil Boost Ahead Of US And EU Sanctions

Tehran has issued a warning to Gulf nations against boosting oil production as Europe and the US attempt to shore up supplies ahead of a possible ban on Iranian exports.

The EU and the US are looking to cut imports of Iranian oil as a diplomatic crisis over the country's nuclear ambitions continues to worsen.

Leaders from Western nations have travelled to the Gulf in recent weeks to try and find extra supplies to offset the shortfall.

Saudi oil minister Ali al-Naimi said on Saturday that as the world's top oil exporter it would be able to meet any extra demand.

However Iran was warned its Opec partners that they would be responsible for the "consequences" if they complied with the US and EU demands.

The Sharq daily newspaper reported via the BBC that Iran's representative to Opec, Mohammad Ali Khatibi, said "our Arab neighbour countries should not co-operate" with the move.

He added that if those countries give "the green light to replacing Iran's oil these countries would be the main culprits for whatever happens in the region, including the Strait of Hormuz".

Asian countries are also reportedly concerned about a potential shortfall in the event they have to comply with the sanctions.

Chinese Premier Wen Jiabao is in talks with King Abdullah of Saudi Arabia, and the president of South Korea, President Lee Myung-Bak, has also been in the region to meet the leaders of the United Arab Emirates and Oman.

Investment experts said that there was no sign yet that the tension would be defused. "Each country is studying its options, its situation," Ken Hasegawa, a derivatives manager with Newedge, told the Reuters news agency. "This situation will continue with high tension."

Meanwhile the Iranian foreign ministry spokesman Ramin Mehman-Parast said that it had received a letter from the US about the Strait of Hormuz, after Iran's recent threats to close the vital shipping lane.

"The US ambassador to the UN Susan Rice had handed a letter to Iran's ambassador to the UN Mohammad Khazayee," he said on Sunday.

He added only that Iran would "respond if necessary".

The US has described the Strait as a "red line", and has said it will not tolerate its closure.

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