Iran is the second-biggest producer within the OPEC oil cartel
The Lavan oil refinery in Iran. Iranian Oil Minister Rostam Qasemi has warned that a looming oil embargo on Iran -- related to its controversial nuclear programme -- will destabilise the global oil market and spark higher prices. © Behrouz Mehri - AFP/File
Iran is the second-biggest producer within the OPEC oil cartel
Last updated: June 13, 2012

Oil embargo on Iran will cause unstable market

A looming oil embargo on Iran, related to its controversial nuclear programme, will destabilise the global oil market and spark higher prices, Iranian Oil Minister Rostam Qasemi warned Wednesday in Vienna.

"Unfortunately the issue of imposing sanctions... is being considered by Europe," Qasemi said on the eve of a meeting of the OPEC cartel to discuss oil output levels.

"This politically-motivated approach will damage the stability of both the oil market and the world economy," he added.

"Unilaterally imposing sanctions as a means to attain a political objective are imposing constraints on the oil industry."

"This will result in an unstable oil market and ultimately lead to a sharp swing in the price of oil."

He added later however that "the time (for the embargo) has not arrived yet."

"We wish this will not happen. It will lead to higher prices."

The European Union is preparing to impose an oil embargo on Iran on July 1, unless diplomatic talks over its disputed nuclear programme see progress.

Western countries and Israel believe Iran is trying to develop a nuclear bomb under cover of its civilian programme but Tehran insists its purpose is merely peaceful.

Iran's OPEC partners, gathered in Vienna for an oil conference ahead of their ministerial meeting, also spoke out against the pending EU sanctions Wednesday.

"I don't want to see any of my member countries under embargo, I am really against this 100 percent," OPEC secretary-general Abdullah El-Badri said.

He also told journalists that he hoped this embargo will be "lifted somehow, by discussion and by... peaceful solutions."

In recent months, the United States and ally Israel -- the sole if undeclared nuclear weapons state in the Middle East -- have threatened military strikes against the Islamic Republic if diplomacy fails.

Venezuelan Energy Minister Rafael Ramirez also rejected the sanctions.

"We denounce the embargo again Iran," he told reporters.

"The EU cannot promote a dialogue with (oil) producers and on the other hand impose sanctions."

"The sanctions aren't good for anyone. Restricting access to oil resources and those who have them only complicates the situation at a time when the EU's economic position is perilous."

Iran, the second-biggest producer in the Organization of Petroleum Exporting Countries (OPEC), is already under four sets of sanctions from the United Nations Security Council over its nuclear drive.

New talks with the so-called P5+1 powers -- the United States, China, Russia, Britain and France, plus Germany -- are set for June 18-19 in Moscow after previous attempts in Istanbul and Baghdad achieved little.

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