Iran will suspend all oil exports if the U.S. tightens sanctions, Oil Minister Rostam Qasemi warned at a news conference in Dubai on Tuesday.
The move would cause a sharp increase in global crude prices as the lack of Iranian oil on the market would drastically add to the price, reported Bloomberg on Tuesday.
Iran’s oil exports have dwindled in the face of U.S. and European Union sanctions on its energy and financial industries. The sanctions are related to its nuclear power capability.
Iran, formerly the second-biggest producer among the 12 members of the Organization of Petroleum Exporting Countries, has slipped to a rank of fourth, behind Saudi Arabia, Iraq and Kuwait.
Iran is still producing 4 million barrels per day (bpd), Qasemi said, rejecting reports that the country’s output has fallen to around 2.7 million bpd.
According to the latest secondary source estimates published by OPEC, Iran pumped just 2.72 bpd in September, and Iran’s own data submitted to OPEC showed the country produced 3.75 million bpd in August, reported Reuters on Tuesday.
But Iran’s oil minister said the country is now pumping oil at full capacity, despite Western countries’ efforts to prevent the Islamic Republic from selling oil in a bid to stop it from continuing its disputed nuclear program.
“It is currently 4 million barrels per day,” Qasemi said on the sidelines of an energy conference in the United Arab Emirates when asked by reporters how much oil Iran is currently producing. He declined to give export figures.
“Iran has been facing U.S. sanctions for 30 years while successfully managing its oil sector,” he said.
In a report earlier in October, the International Energy Agency (IEA) estimated Iranian exports falling to a new low of 860,000 bpd in September, a huge plunge from 2.2 million bpd at the end of 2011.
Iran rejected the figures saying its oil exports have remained steady in recent months.
Qasemi said in mid-September that crude oil prices, then at around $118, were too low and oil should rise to at least $150 per barrel. But a month on, and with Benchmark Brent crude prices having fallen below $110, he said Iran does not want oil prices to rise.
“We don't want the price of oil to increase, it has to be a logical price,” he said, blaming politics for pushing prices up.
Iran’s production is widely believed to have been hit by Western economic sanctions this year, and the figure given by Qasemi is substantially higher than many outside estimates.
The International Monetary Fund estimated earlier this year that Iran’s output in 2012 would average 3.6 million bpd, down from 4.1 million bpd last year, with production at the start of the year much higher than the second half of 2012 when an EU ban on Iranian oil came into effect.