Iran condemned on Wednesday what it said was the use of oil as a political tool against producers, referring to Western sanctions over Tehran's nuclear programme, as Saudi Arabia promised to cover any shortage in supplies.
At the 13th biennial International Energy Forum, which concluded in Kuwait on Wednesday, Iranian Oil Minister Rostam Qasemi indirectly denounced the West for ramping up sanctions against the Islamic republic over its nuclear programme.
"Unfortunately, some big countries who are among the major energy consumers view oil as one of the basic constituents in their military, security and political strategies, and use it as a political tool against oil producing countries," Qasemi told the forum.
"Exerting unilateral economic constraints ... is a threat which jeopardises free trade and the continuity of oil supply in the world," he said.
Qasemi's comments came as the International Energy Agency forecast that Iranian oil exports will fall by 800,000 barrels per day after mid-2012.
The IEA said Iran's exports would decline to around one million bpd, while global demand for oil grows by 800,000 bpd to 89.9 million bpd.
With fresh EU sanctions on Iran's oil exports to take effect in July, the minister lamented that dialogue between producing and consumer countries had failed to avert oil sanctions.
"Unfortunately, the trend of dialogue between producers and consumers has not been successful in establishing an atmosphere of healthy cooperation, depoliticising oil and energy industries and eliminating sanctions, to the extent that producers and consumers expected."
But Britain's minister of state for energy and climate change, Charles Hendry, said the West was not using crude as a weapon, insisting sanctions were imposed due the Iran's "intolerable threat," and aim for an "appropriate" response from Tehran.
Without mentioning the sanctions, Saudi Arabia's Naimi said: "As I have noted many times before, Saudi Arabia and others remain poised to make good any shortfalls -- perceived or real -- in crude oil supplies.
The IEF meeting ended without addressing market fears over escalating tension between the West and Iran, with ministers agreeing that markets needed transparency to tackle volatility.
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The United States and the European Union have in the past four months ramped up economic sanctions on Iran in a bid to force it to suspend uranium enrichment, the most sensitive part of its nuclear programme.
Tehran warned in December that it would blockade the strategic Strait of Hormuz -- a key transit route for global oil supply -- if the West imposes further punitive measures.
The British minister told reporters that sanctions against Iran were aimed at pressing Tehran to abandon its suspected plans to develop nuclear weapons.
"What we're making clear through having higher levels of sanctions being proposed is that we are very serious about this and we want the Iranian government to respond appropriately," said Hendry.
"What the governments of the free world, essentially, have been saying is that the threat of Iran with nuclear weapons is intolerable, and that we have to take action now to persuade them to pursue a peaceful civil nuclear programme, not a military nuclear programme," he said.
"The solution to that is in Iranian hands," he said.
Qasemi appeared non-plussed by increasing sanctions, boasting that customers continue to trade with Iran, despite US sanctions and the impending EU ban.
"The previous customers we had are still with us ... They cannot tolerate working without Iranian crude," he said.
China, India, Japan and South Korea import two-thirds of Iran's oil exports, with the EU accounting for only around a fifth.
Meanwhile, Iran's chief nuclear negotiator Saeed Jalili sent a letter to EU foreign affairs chief Catherine Ashton saying he wanted to see "representatives from both sides in contact to set a date and place for the new round of talks," the official IRNA news agency reported.
Ashton represents the so-called P5+1 group of world powers, comprising the United States, Russia, China, France, Britain and Germany.
The last round of talks between Iran and the P5+1 broke down in Istanbul in January 2011.