(Reuters) – Iran said on Tuesday it would stop oil exports if pressure from Western sanctions got any tighter and it had a “Plan B” contingency strategy to survive without oil revenues.
Western nations led by the United States have imposed tough sanctions on the Islamic Republic this year in an attempt to curb its nuclear program that they say is designed to produce an atomic bomb. Tehran says its nuclear plans are peaceful.
“If sanctions intensify we will stop exporting oil,” Iranian oil minister Rostam Qasemi told reporters in Dubai.
Qasemi’s statement is the latest in a series of threats of retaliation by Tehran in response to the sanctions, which have heightened political tensions across the Middle East and, analysts say, led to a sharp drop in Iranian oil exports.
“We have prepared a plan to run the country without any oil revenues,” Qasemi said, adding, “So far to date we haven’t had any serious problems, but if the sanctions were to be renewed we would go for ‘Plan B’.
“If you continue to add to the sanctions we (will) cut our oil exports to the world.”
Iran has in the past said it could shut the vital shipping lane of Hormuz at the head of the Middle East Gulf, through which much of the region’s seaborne oil exports pass.
Earlier on Tuesday, Qasemi said Iran was still producing 4 million barrels per day (bpd), rejecting reports the country’s output has fallen to around 2.7 million bpd.
According to the latest secondary source estimates published by the Organization of the Petroleum Exporting Countries, 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.
But Qasemi said Iran was pumping oil at full capacity:
“It is currently 4 million barrels per day,” Qasemi said, declining to give export figures.
“Iran has been facing U.S. sanctions for 30 years while successfully managing its oil sector,” he said.
Qasemi said Iran was now consuming much more of its own oil thanks to a rapidly rising refining capacity.
He said Iran’s refining capacity was now 2 million barrels per day (bpd) with another 200,000 bpd of capacity to be added before the end of Iranian year next March.
The increase in refining capacity had already ended Iran’s need to import vehicle fuel and could soon drive a boom in fuel exports, the minister said.
“Our daily consumption of petrol (gasoline) is 90 million liters … Earlier, a big portion of that was being imported but we no longer import products,” he said.
“Right now, we not only don’t import but we also export some products … there are always customers for Iranian oil.
“By the end of the Iranian year they will reach their maximum capacity and then we can export more Iranian oil products,” he said.
(Reporting by Daniel Fineren and Amena Bakr; writing by Christopher Johnson; editing by Keiron Henderson)