Iran’s OPEC governor told Reuters on Wednesday the West ought to withdraw plans to impose sanctions on Iran's oil, a move that would hurt the market and prompt Tehran to retaliate by blocking Gulf OPEC crude exports going through the Strait of Hormuz.
Iran warned on Tuesday it would stop the flow of oil through the Strait of Hormuz if sanctions from the West were imposed on its crude exports.
“If sanctions are imposed they would create an abnormal situation and at that point anything can happen, and if Hormuz is closed no oil from the Gulf area could be exported ...it's a bad situation for everyone,” Mohammed Ali Khatibi told Reuters in a telephone interview.
On Tuesday, industry sources told Reuters that Saudi Arabia and other Gulf OPEC states were ready to fill any supply gap if sanctions are imposed on Iran.
“At the moment everybody is satisfied with the oil market the way it is, so why do some countries want to change this situation?” he added.
Tension had increased between Iran and the West after EU foreign ministers decided three weeks ago to tighten sanctions on the world's No. 5 crude exporter over what the U.N. nuclear watchdog said was an attempt to design an atomic bomb, but left open the idea of an embargo on Iranian oil.
“Iran has put a lot of effort into making sure that the market is well balanced especially during the last OPEC meeting, so it’s not logical for some countries to change this situation,” said Khatibi.
Led by Iran’s Oil Minister Rostam Qasemi as president of The Organization of the Petroleum Exporting Countries (OPEC), an agreement was reached on December 14 to keep OPEC production at 30 million barrels per day, ratifying current production near 3-year highs.
“We really hope the worst case situation does not happen because it will harm everyone, we want things to remain stable and for consumers, producers and investors to be satisfied.”