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Sun 15 Jan 2012 11:12 AM

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Iran issues oil output warning to Gulf countries

Persian state warns GCC not to ramp up volume to replace its oil in event of EU embargo

Iran issues oil output warning to Gulf countries
Iranian President Mahmoud Ahmadinejad. The nation has denied it is producing nuclear weapons

Iran warned its Arab neighbours on Sunday not to raise crude
output to replace Iranian oil in the event of an embargo by the European Union,
Tehran's OPEC Governor Mohammad Ali Khatibi was quoted as saying.

"The consequences of this issue are unpredictable.
Therefore, our Arab neighbour countries should not cooperate with these
adventurers and should adopt wise policies," Khatibi said in an interview
with the Sharq newspaper.

European Union countries have agreed in principle to embargo
imports of Iranian as part of the latest Western efforts to step up heat on
Tehran.

They will look to other oil exporters to increase output to
make up for the shortfall and Saudi Arabian Oil Minister Ali al-Naimi said on
Saturday his country was ready to meet any increase in consumer countries'
demand.

Iran, OPEC's second-largest oil producer after Saudi Arabia
with output of about 3.5 million barrels per day, faces trade hurdles over its
nuclear programme, which the United States and its allies say is aimed at
building bombs.

Iran says it needs nuclear technology to generate
electricity.

EU countries have proposed "grace periods" on
existing contracts of one to 12 months to allow companies to find alternative
suppliers before implementing an embargo.

Iran has threatened to block the vital oil shipping route of
the Strait of Hormuz
in the Gulf if sanctions imposed on its oil exports.

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