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Hormuz block would be brief says Saudi

Dubai, January 16, 2012

The Straits of Hormuz are unlikely to be blocked for long, if at all, but rising tension between Iran and Western powers are disturbing and negative for oil markets, Saudi Arabia's Oil Minister Ali Al-Naimi told CNN on Monday.

Tehran has threatened to close the vital export route for most of Saudi Arabia's oil as tensions with the United States and its Western allies have escalated over the last month.

'I personally do not believe that the Strait, if it were shut, will be shut for any length of time. The world cannot stand for that,' the oil minister for the world's largest oil exporter told CNN, according to a transcript of CNN's Global Exchange programme due to air at 1600 GMT.

Asked if he is concerned about the war of words between Iran and US, Al Naimi said: 'I don't think all these pronouncements are helpful to the international oil market or to the price of oil. Its really disturbing.'

Iran has warned Gulf Arab neighbours they would suffer consequences if they raised oil output to replace Iranian crude facing an international ban.  

Meanwhile, Iran said it was business as usual with Asia's leading oil buying countries, despite growing pressure on its customers in the East from a tightening mesh of sanctions hampering its crude exports.

Asian leaders are touring the Middle East to secure supplies, as tension over Iran's nuclear work builds, while European buyers may rely more heavily on Arab oil producers should an EU ban come into effect.

Mohsen Qamsari, head of international affairs at the National Iranian Oil Co., told Sharq daily that Iran had renewed some contracts with foreign refiners and would do so with others as deadlines approached.

'The one-year contract with Korean companies to buy our oil has been renewed since the last two months,' Qamsari said.

South Korea will buy around 10 percent of its crude from Iran in 2012, up slightly from last year, as it seeks a waiver from toughened US sanctions, and its refiners were also looking for alternatives, traders and officials told Reuters early in January. 

When asked whether Japan had reduced its oil imports from Iran, Qamsari said: 'It is not true. The time for renewal of contracts with the Japanese is around March and they are buying 240,000 barrels from us per day.'

Qamsari also denied any problems doing business with India. India has been struggling to pay Iran after the new US sanctions which penalise any financial institutions dealing with Iran's central bank. It currently pays through Turkey's Halkbank, a mechanism that may be cut off by the latest round of sanctions. - Reuters




Tags: Oil | Iran | Sanctions | Strait of Hormuz |

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