If Iran is hit with an oil embargo over its nuclear policy, other major exporters will increase their production in order to steady world markets, the French foreign minister said Tuesday.
“Other countries are ready to increase production to avoid an effect on prices. We have made discreet contacts in this direction. The producers don’t want to talk about it, but they are standing ready,” Alain Juppe said.
Briefing a French parliamentary committee, Juppe said he did not share some lawmakers’ pessimism over the prospects for an embargo on Iranian crude.
Several Western powers are pushing for stronger economic sanctions to be imposed on Iran’s Islamic regime in order to force it to abandon a nuclear program they allege is destined to produce atomic bombs.
But China and some other major energy consumers are opposed to any embargo that could cut of oil supplies from the Gulf and boost oil prices at a moment when the world economy is already teetering on the brink of recession.
Juppe admitted some European oil importers, including Italy and Greece, were also nervous about losing Iranian exports, but said: “We are trying to convince our partners that there are other sources of supply.”
The French minister said he hoped to have all EU members on board for tougher sanctions before a European foreign minister’s meeting on Jan. 23.
Iran is the world’s third largest oil exporter, shipping around 2.4 million barrels per day, and the regime depends on oil sales for 60 percent of its revenue, having made around $100 billion last year.
Taking this oil off the market would be a shock in itself, but Iran has also threatened to disrupt shipping in the Strait of Hormuz, which could cut supplies from Saudi Arabia and other major Gulf producers.