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Iran says US fuel sanctions move will fail

Tehran, December 16, 2009

A senior Iranian oil official said on Wednesday a move by US lawmakers to target the Islamic Republic with fuel sanctions would not cause any problems because Tehran had many suppliers.

On Tuesday, the US House of Representatives approved legislation to impose sanctions on foreign companies that help to supply fuel to Iran, a measure lawmakers hope will deter the country from pursuing its nuclear programme.

"They cannot succeed," said Hojjatollah Ghanimifard, vice president of investment affairs at the state National Iranian Oil Company. "We have a long list of suppliers of gasoline," he told Reuters.

Iran is the world's fifth-largest oil exporter, but lacks sufficient refining capacity to meet domestic fuel needs, forcing it to import up to 40 percent of its gasoline consumption.

This burdens the budget and also makes it vulnerable to any punitive measures that targets the trade, although Iranian officials have repeatedly shrugged off the impact of sanctions imposed over its disputed nuclear ambitions.

The House bill authorises President Barack Obama to levy sanctions on energy companies that directly provide gasoline to Iran, along with the firms that provide insurance and tankers to facilitate the fuel shipments. The Senate is likely to approve a similar bill, but it is uncertain how soon it will vote.

Pressure

The legislation would expand an existing US law that seeks to punish foreign companies that invest more than $20 million a year in Iran's energy sector. The sanctions include preventing companies in violation from getting financial assistance from US institutions such as the Export-Import Bank.

Western firms have become increasingly wary of investing in Iran due to the row over its nuclear work, which the West fears is aimed at making bombs, although companies from energy-hungry Asia are seen as less susceptible to such pressures.

Iran denies the charge and says it needs nuclear power plants to generate electricity so that it can export more oil and gas. – Reuters




Tags: Iran | Tehran | Suppliers | fuel | US sanctions |

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